Why holding cash seems to be the smart move

Charles Sachs has utilized S&P 100 for the past 14 years, both as a trader and an advisor. He uses 24 proprietary indicators in order to structure options strategies which can generate gains whether the market moves up, down or sideways.

As seen in the chart below, the S&P 100 index (OEX | Quote | Chart | News | PowerRating) continues to swing above and below the 580 level. The 580 level had been the prior support level on the OEX index for the past two months as the index moved in a trading range between the 580 and 595 levels.

The current test of the 580 level is quite important as it will provide evidence as to the likelihood of future price movements in financial markets whether these movements will be higher or lower. For now it is unclear which way financial markets will break.



Bottom Line:

In the short-term, conditions in financial markets are unclear so we are recommending holding cash in our model portfolio.

One other note: I will be giving an online options seminar today at 11 a.m. EST. to discuss more fully the proper approach for trading options.

Sincerely,
Charles Sachs
Chief Options Strategist