Market picture negative, but ‘noisy’
The trend picture for most market indices and sectors remains somewhat “noisy”, but negative. Favorable seasonality and a technically “oversold” condition could lead to a rally in the short term, but the overall picture suggests that – for now – any such event be viewed as a potential set-up for a further decline.
Options Expiration Results
- Briggs & Stratton (BGG) – The November 22.5-strike puts I sold against BGG on 10/15/07 expired in the money (ITM) and I was put the stock for a net cost basis of about $21.80 per share.
- Citigroup (C) – The November 35-strike puts I sold against C on 11/05/07 expired ITM and I was put the stock for a net cost basis of about $33.70 per share.
- MGIC Investment (MTG) – The November 25-strike puts I sold against MTG on 10/16/07 expired ITM and I was put the stock for a net cost basis of about $24.50 per share.
- Pfizer (PFE) – The November 25-strike puts I sold against PFE on 10/15/07 expired ITM and I was put the stock for a net cost basis of about $24.30 per share.
- Wal-Mart Stores (WMT) – The November 47.5-strike calls I sold against my long position in WMT (purchased 8/17/07) on 10/11/07 expired out-of-the-money (OTM) for a 5-week net return of about 2.9% on the position.
New positions
No new positions this week.
Watchlists
“Upside strength” candidates of interest this week include Chiquita Brands (CQB), Deutsche Telecom (DT), and Unilever (UN).
Candidates of interest on the “oversold” scans include CapitalSource (CSE), Cooper Tire & Rubber (CTB), Dow Chemical (DOW), DuPont (DD), Eaton Corp. (ETN), Granite Construction (GVA), J.C. Penney (JCP), Nam Tai Electronics (NTE), PPG Industries (PPG), The Stanley Works (SWK), and Telefonos De Mexico (TMX).
