Low VIX + Oversold OEX
size=”2″ face=”Arial, Helvetica”>Join me, fellow
TradingMarkets.com content providers, and other traders and
money managers at the Trading Markets 2000 conference at the
Venetian Hotel Resort and Casino in Las Vegas on October
13-15, 2000.
face=”Arial, Helvetica”>Once again, I was unable to find any
new covered-call opportunities. Therefore, due to positive
price action, I’m showing Electronic Arts
(
ERTS |
Quote |
Chart |
News |
PowerRating) again
tonight (Monday). You can buy the stock for 88 5/8, and you
can sell the September 100 calls for 4 1/8. This represents
approximately a 17% return (more than 130% annualized, based
on 38 days until expiration) should the stock be called
away.
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Although
the semis
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) bounced on Monday, they still look
vulnerable. Continue to look for buying opportunities in
puts and put spreads here.
Continuing
on the short side, telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating), like the semis,
also bounced on Monday. However, so far, it appears to be
only pulled back from lows and looks poised to resume its
downtrend. Look for buying opportunities in puts and put
spreads here.
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The
VIX remains at relatively low levels, as evidenced by the
CVR VI sell signal on the
Bias Page. This, combined with an overbought OEX,
suggests that there might be an upcoming buying opportunity
in OEX puts and put spreads.
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Best
of luck with your trading on Tuesday!
P.S. Reminder:
Protective stops on every trade!