Trade & Market Update

Investors and traders are on edge and risk aversion is the major theme this week.  The FED is meeting and will make their comments about the economy and interest rates this Wednesday, and the unemployment numbers come out on Friday.   Because of this uncertainty, volatility (VIX) climbed up to the 29/30 range and probably will remain elevated until the jobs number is released this Friday.

Per economic data, factory orders, the ISM index and pending home sales all came in better than expected.  As a result, we believe that the the major indexes will hold above either their 100 day or 200 day lines.  (for specific moving averages and support levels for each index please refer to Sunday’s advisory)

Let’s take advantage of this recent spike in volatility and pull back of the RUT and SPY and continue to bring in premium on our Nov bull put spreads this week, per the trade recomendations in Sunday’s advisory.

Comments (2)

Scott LeopardNovember 4th, 2009 at 5:28 pm

If the ADP number was accurate, we’ll see a little negative on unemployment Friday. But, the trend is still considered positive and based on reactions today, I would expect an uptick if the unemployment number tracks with the ADP report. And the ISM number was still on the expansion side. So, I don’t think a steep volatile drop from here makes sense. I’m liking the premium we’re getting.

bradrrNovember 4th, 2009 at 5:32 pm

I agree with you. There is a reasonable chance that tomorrow, Thursday the 5th, will be flat to down, and if it is, let’s bring in more premium.

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