Wednesday’s Levels

  • June 9, 2004
  • Mark Melin

Tuesday, June 8

Tuesday Recap: In our prediction
for yesterday, we said the markets would touch both sides of the flat line with
an upside bias.  With the cash Dow we also noted that the 10350 level would
provide good support and would be a likely point where buyers emerged.   In fact
on Tuesday, the cash Dow started lower, found buyers and ended the day with an
upside bias, closing at 10432, up some 41 points on the day. 


Charts from www.stockcharts.com

On the S+P we said that 1135 would be a good
support point and we didn’t expect that it would be broken.  In fact the low of
the day was 1135.45, where buyers ultimately propelled the broad-based index to
close at 1142.18. 

 


Prediction for Wednesday: I
expect the markets to retrace today and then potentially rally Thursday
morning.  Ultimately I don’t expect today to hold significant price action. 

On the S+P we’ll watch the 1135 level again – and
this could provide the lows of the day.  Likewise on the Dow, we’ll watch the
10350 level – and this might be a point where we become buyers. 

Volatility is at the low end of the value
distribution region, and I expect volatility to move higher on Wednesday. 

Portfolio Strategy:  Right now
we are delta positive and will likely remain as such if not get additionally
positive.  I’m starting to look at set-ups for the July options, but might not
make a major move until the inflation numbers are released tomorrow. 

Previous Day’s Results and Current Portfolio
Status:  

Daily Profit: $30

 

10100 June Mini Dow Put Option:  We are short one put option.  Yesterday it
closed at 12, down 5.  Profit yesterday with this position was $25.

 

9700 June Mini Dow Put Options: On 5/24/04 we sold one put option for 70. 
Yesterday it closed at 3, down 2.  Profit yesterday with this position was $10.

10600 June Mini Dow Call Option: We are short one call option.  Yesterday it
closed at 13, up 1.  Loss yesterday with this position was $5.

Mini Dow Futures: We came into the day flat the mini Dow future and remain flat
the mini Dow. 

 

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