3 Weeks to Go
9/26/2008 8:35:07 PM
The system remains in Buy mode.
On September 22 we sold an SPX Oct 1070(SPQVN)/1060(SPQVL) Put Option Spread for a net credit of $0.80
The premium received is $80 per $1,000 of margin required per spread (before commissions).
SPX Chart - Bigger Picture
In the bigger picture we remain with the bears although we're at the lower end of the range. The technicals are giving mixed signals, which indicates that sideways action is the likely outcome from here. The likely trading range is 1170 - 1300 approx.
SPX Chart - Smaller Picture
In the shorter term, the market has consolidated this week and is in a holding pattern until a decision around the "bailout" package is reached.
We have some resistance around 1220 but if this can be surpassed convincingly, then 1260 becomes the target and that could happen next week if the government can strike a deal.
At this point there's strong resistance from 1250 - 1300 and while next week could be positive, overall the uncertain times remain and the likelihood is that we continue to gyrate in a large sideways pattern.
Support is 1180 - 1130 and resistance is 1260 - 1280.
In relation to our open position, with 3 weeks to expiry, we have a reasonable buffer of 143 points at this point.
The quote this week is from Maya Angelou, "Life loves to be taken by the lapel and told: I'm with you kid. Let's go."
Have a great weekend and feel free to email me at email@example.com with any questions or comments.