Trade & Market Update – Optimism Fades Quickly After Solid Q3 GDP Results

The stock market had a strong UP day yesterday right after the Q3 GDP results showed that the US economy is now growing at an annualized 3.5% rate and that the recession is over.   All of the major indexes including the S&P 500, DOW and Russell 2000 participated in the rally.  Unfortunately, the party didn’t last long and the market is again pulling back.  We need to continue to be patient and if the market remains in a funk we then need to wait to see how it will react to the unemployment numbers that are being released next Friday, November 6th.  Most likely unemployment will climb to 9.9% or 10% , which is bad, and the market will pull back further giving us better and safer strike prices for our November bull put spreads.   Our plan is to open our bull put spreads immediately following the release of the unemployment data.

We’ll watch the market daily to see if we still might have the opportunity to open our November bear call spreads.  If we do, we’ll send out new strike prices since our current  strike prices are no longer valid.   Unfortunately, because of how the market is behaving we might not have an opportunity to open our bear call spreads this month.  We’ll keep you posted.

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