• 389 days Could Crypto Overtake Traditional Investment?
  • 394 days Americans Still Quitting Jobs At Record Pace
  • 396 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 399 days Is The Dollar Too Strong?
  • 399 days Big Tech Disappoints Investors on Earnings Calls
  • 400 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 402 days China Is Quietly Trying To Distance Itself From Russia
  • 402 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 406 days Crypto Investors Won Big In 2021
  • 406 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 407 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 409 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 410 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 413 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 414 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 414 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 416 days Are NFTs About To Take Over Gaming?
  • 417 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 420 days What’s Causing Inflation In The United States?
  • 421 days Intel Joins Russian Exodus as Chip Shortage Digs In
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

3 Weeks To Go

1/25/2008 6:17:20 PM

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


Our system has now moved into Buy mode. Does this mean we're in clear blue sky now? Not yet, at this stage the market is taking an in breath from its dramatic exhalation, although there are signs that we may be on the road to recovery.

Current Position:

On January 17th we sold an SPX Feb 1280(SZPNP)/1270(SZPNN) Put Option Spread for a net credit of $1.50.

(i.e. a total premium received of $150 per $1,000 of margin)

SPX Chart - Bigger Picture

We're still in a vacuum between about 1370 and 1320. A weekly close above 1370 will be the first sign that a bottom is in place. At this point, uncertainty and volatility is the name of the game.

SPX Chart - Shorter Picture

In the shorter term we have a band of resistance between around 1375 and 1425. We came close to the overhead resistance today and retreated, 1320 now holds the key in the short term.

What we've witnessed this week is an event that generally only happens once or twice in a decade, a good old panic that flushes out all exuberance. In the past these types of panics have paved the way for some descent rallies. Time will tell if that's what will happen this time, but in order to undo the technical damage, we need to see a break above 1420 to start with and then a continuation through the 1450 region.

Overall, the S&P500 dropped just under 20% and the Nasdaq, just under 25% from their highs of 3 months ago! The sudden drop added a greater momentum to the rubber band effect we discussed last week causing a 100 point swing on the S&P from the low on Wednesday to today's high.

From the perspective of our 1280/1270 February put spread position, we came very close to pulling the trigger again but the support around 1300 held on a daily basis and there is now some breathing space in our position. We are however still in a delicate period.

We have three weeks to expiry left on our put spread, which feels like a long time under the current circumstances. We'll monitor how the bounce plays out and will consider closing our position if we go into sell mode.

This week's quote is from Mahatma Gandhi, "I do not want to foresee the future. I am concerned with taking care of the present."

Have a great weekend and feel free to email me at angelo@stockbarometer.com with any questions or comments.


Back to homepage

Leave a comment

Leave a comment