Short Term/Long Term
3/28/2009 9:32:16 AM
Welcome Traders - here is this weekend's Stock Options Speculator. Each week we make a call on the market and give you our top 10 options plays given that call. This week is a little different as we'll be recommending bull call spreads. We'll be recommending these spreads for the next few weeks as we're longer term bullish on the market and they serve to take advantage of that strength and provide some downside protection. If you want to give the service a try, here's a link to sign up: http://bmb.goemerchant.com/cart/cart.aspx?ST=buy&Action=add&Merchant=stockbarometer&ItemNumber=020
Short term/Long term
Here are 10 bull call spreads to consider for the next wave up.
SOS Timing Indicator
This is a week where we expect a mix of action - i.e. a slight continuation of the move higher into 4/1 and then a larger retracement into 4/8. However, after the short term correction, we still are very bullish and accordingly, I think I'll spend the next few weeks recommending some Bull Call Spreads.
Stock Options Speculator uses the above indicator in the establishing of various options trades and strategies. The indicator has two frames. The top frame shows the Nasdaq Composite and the Nasdaq Advances and Declines. The lower frame shows volatility (candles), the equity put call ratio (red line) and the Trading Index (blue line). The height of the indicators determines if call or put buying strategies are recommended.
Options Trading Ideas
Based on the SOS Timing Indicator or other special market conditions, the above 10 trades are recommended for consideration in your trading plan.
The following risk graphs show stock price plotted against potential profitability. They're listed alphabetically.
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We expect this week to be up early and down after Wednesday into the following week. Longer term we're bullish so we'll recommend some bull call spreads over the next few articles to take advantage of the up move.
Not every one of our recommendations is going to fit into your style of trading. These 10 picks are presented for your consideration. Personally, I'd take a serious look at ICE, AAPL, FXP, PCLN and SAFM. Your trading style may take you in a different direction.
I'd also look to enter on any weakness. But note that it's the relative pricing of each that makes these attractive plays. So timing isn't that critical on the spread. It's the over time relative value that makes these attractive plays.