2 Weeks To Go
2/1/2008 5:58:53 PM
Our services' net portfolio gain for 2007 was 107.8%! For a full break up of this performance, CLICK HERE.
Our system remains in Buy mode. The market is at a resistance point now and may begin to consolidate soon.
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 closed above the first level of resistance this week, which is the first sign that a bottom is in place. We need to see some follow through now and given the large swings in the market, we could see more movements between 1320 and 1380 as the market creates a foundation of support.
SPX Chart - Shorter Picture
In the shorter term we're in the band of resistance between 1375 and 1425 now. 1420ish is the 50% Fibonacci retracement level, also the November lows around 1410 could prove to be stiff resistance. We seem to be getting to a level where the upside looks limited and the market could take a breather. Once again, 1320 holds the key on any retracement down but if the 1360 level can hold that will be quite positive.
From the perspective of our 1280/1270 February put spread position, we have more breathing space now with a buffer of 115 points and only two weeks to expiry. That said, we're still not out of the woods, we seem to be getting close to a short term sell point and it all depends on how far the market drops on the next down wave. If we go into sell mode, we'll look to close our put spread and hold the profit.
This week's quote is from Leonardo Da Vinci, "Life is pretty simple: You do some stuff. Most fails. Some works. You do more of what works. If it works big, others quickly copy it. Then you do something else. The trick is to do something else."
Have a great weekend and feel free to email me at email@example.com with any questions or comments.