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November 14, 2007

Final Week
by Angelo Campione

11/14/2007 9:27:13 PM

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Our services' net portfolio gain is 78.26% over 10 months. An 87.89% Annualized Return! For a full break up of this performance, CLICK HERE.

Our system moved into Sell mode during the week, with one week to expiry, we have a buffer of 43.7 points on the put spread and 156.7 points on the call spread.

Position Recap:

On October 23rd we sold an SPX Nov 1610(SPBKB)/1620(SPBKD) Call Option Spread for a net credit of $0.40.

On October 29th we sold an SPX Nov 1410(SXZWB)/1400(SXZWT) Put Option Spread for a net credit of $0.40.

(i.e. a total premium received of $80 per $1,000 of margin)

SPX Chart

Looking at the longer term on the SPX, we're still in an uptrend and there is reasonable support around the 1450 area.

The SPX broke the 1490 support level I spoke about last week and has made a quick decent to the 1450 region, it may now find a level of support around 1440 and trade between 1440 and 1490 in the near term. At this point our 1410/1400 put spread is still fine, I'm anticipating a little more downward pressure on Monday and after that a bounce into the end of the week. If any action is required I will email you.

NDX Chart

The longer term picture of the Nasdaq also shows a healthy uptrend and looks like it's simply taking a breather from having advanced so much in a short period of time.

On the shorter term, the breakout over a week ago has in fact turned out to be a fake out as discussed last week and this now casts doubt on the anticipated Christmas rally. We'll probably get a bounce from the sudden drop but after that, chances are we'll drop further and trade between 1950 and 2050 before it resumes its uptrend, possibly post Christmas.

While I've spoken about the traditional Christmas rally the last few weeks, the rally is mainly of interest for portfolios that only perform from being on the long side. From our perspective it really doesn't matter and that's why this strategy is such a great hedge, we simply trade whichever side our indicators point in order to generate a comfortable monthly cashflow.

Have a great weekend and Feel free to email me directly at angelo@stockbarometer.com if you have any feedback or questions.

Cheers,

Angelo Campione

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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.

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Copyright © 2007 Angelo Campione

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