I sold more put options this week as opportunities presented themselves as the market fell sharply and volatility expanded. The sell-off so far appears to be a well-deserved correction – one that’s going about doing its job of scaring market participants quite effectively.
Many individual stocks are at or fast approaching intermediate-term oversold [...]
An article on Barron’s this past week argues that selling puts is likely to emerge as a key options market theme this year.
The article, Monetizing the Fear of Others, notes that – in addition to enabling investors to potentially buy stocks at below market prices – selling puts lets investors “leverage the residual [...]
The market still hasn’t tipped its hand on whether it’s currently basing at these levels – above the recent lows – before moving higher, or consolidating before moving lower. If the market does move lower in the near term – amidst high bearish sentiment and still extreme oversold technical conditions – it would very likely [...]
Coming amidst extreme bearish sentiment readings and oversold technical levels, last week’s positive market price action suggests that an intermediate-term bottom of some sort may be in place. Whether this proves to be consolidation in a larger decline, or something more bullish remains to be seen.
New positions
Southern Copper (PCU) – On Thursday I [...]
Market sentiment and technical oversold levels remain at extreme levels, and positive divergences may be developing on the most recent price weakness. While these continue to suggest potential signs of a near-term bottom, continued weak price action is indicating that a move to the 2002-2003 market lows – about 7,200-7,500 for the DJIA and [...]
Last Thursday’s retest of the recent market lows suggests either consolidation in the downtrend or a potential bottom of some sort. Considering the continuing high current levels of bearish sentiment and oversold technical readings, the odds seem high for a sideways or upwards bias, while a move to new lows in the near term would [...]
The markets appear headed to ultimately test – or perhaps even break below – their 2002 lows as part of what now appears to be a huge sideways correction of the bull market of the 80s and 90s. The good news is that, if true, this “third wave” event may well be setting the stage [...]
The exuberant rally following the initial announcement of the bailout plan proposal over a week ago turns out to have been just another bounce in an ongoing decline. While that rally exhibited short-term extreme optimism (and was therefore negative), the longer-term picture continues to show bearish sentiment at high levels (a positive sign), but [...]
After a week of backing and filling, it still appears likely that the market rally that began on 9/18 marked the beginning of a new uptrend that has further to go. A break below key near-term support levels – 10,700-10,800 (DJIA) and 1170-1180 (S&P 500) – would imply a less positive (but not necessarily [...]
Last week’s extreme levels of fear and panic over the possibility of a freeze-up in the U.S. financial system appear to have marked a significant market bottom. In fact Thursday and Friday’s sharp rally – with financials notably leading the way – has already confirmed a bottom of some significance.
The upmove so far has [...]
