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May 17, 2008

3 Double Digit Returns out of 4 Months
by Angelo Campione

5/17/2008 10:19:48 AM

10.5% gains from our last position!

Our Advantage Credit Spread service just produced 3 double digit returns in the last 4 months. That's 41% profit in 4 months. Read on to learn how to get a free trial to this service.

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The net portfolio gain for 2007 was 107.8%! For a full break up of this performance, CLICK HERE.

Summary of Position For May

We entered a May SPX 1460/1470 Call Option Spread on April 18 and received a premium of $80 per spread. Then on April 22 we entered a half position in a May SPX 1255/1245 Put Option Spread and received a premium of $50 per spread. The combined total of this equates to a net return of $101.58 per $1,000 of margin used or 10.16% after commissions for 4 weeks in the position (using Interactive Brokers commission rates). The return before commissions was 10.5%. The official CBOE settlement price for the May SPX options was 1425.70.

The half position Put didn't quite work out as planned for May as the market held its strength for longer than anticipated. In any event, we ended up with our third double digit return out of the last four months, and that's something to be thankful for.

Current Position:

On May 16th we sold a half position in an SPX June 1295(SZPRS)/1285(SZPRQ) Put Option Spread for a net credit of $0.45. (Please note, we didn't get filled on the Call side).

The premium received is $45 per $1,000 of margin required per spread.

Think or Swim tried to get the trades by trying to do all 4 legs together and didn't get a fill. Watch your email on Sunday evening for a new trade suggestion.

The market remains in Buy mode.

SPX Chart - Bigger Picture

We're at a very interesting juncture now, we're pretty much right on the 200 day moving average and there is stiff resistance above. Having said that, if the crowd believe that a down turn is likely, then market has an uncanny ability to do the opposite of what is expected. If we do rise from here, it is likely to encourage the fund managers to add to their positions and that would most likely send us toward the 1450 level. This also happens to be the 61.8% Fibonacci retracement level (1454) and that's the best case scenario for the medium term in my opinion.

SPX Chart - Shorter Picture

In the shorter term, it seems we are still part of a rising wedge formation and the break down from this time last week was a false one. The momentum is up from here and we could get another week or so out of this run. However, I still maintain that the underlying technicals are not supportive of this rise and so a pull back of some sort is likely in the near term. A pull back to around the 1360 level would be a healthy move to give the uptrend more stability.

For next week, support is 1415 - 1400 and resistance is 1430 - 1450.

The quote this week is from Mike Tyson, "Everybody's got plans... until they get hit."

Annual Subscription Offer

If you haven't taken up our annual subscription offer yet, you can help your monthly returns further by saving 20% on your subscription fees. By taking up our annual subscription offer, you get a year's service for the equivalent of $39.92 per month (or 20% less than the current monthly fee).

Please click on this link for your annual subscription: Annual Subscription
Please contact customer support if you have any issues at: customersupport@stockbarometer.com
Have a great weekend and feel free to email me at angelo@stockbarometer.com with any questions or comments.

Cheers,

Angelo Campione

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Important Disclosure:

Futures, Options, Mutual Fund, and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

There is a very high degree of risk involved in trading. Past results are not indictive of future returns. Stock Barometer and all individuals affiliated with Stock Barometer assume no responsibility for your trading or investment results.

Copyright © 2007 Angelo Campione

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