Pick A Bottom?
We’re at an interesting juncture in the
market. Most sectors were up sharply on Thursday, but, so far, remain in
longer-term downtrends. Unless you’re confident in bottom picking, I suggest
waiting to see how far this bounce will take us. At that point, if it looks like
it will roll over, then puts remain the logical choice. Otherwise, it might be
time to start nibbling on the call side. For now, watch the pivot lows that were
made on Wednesday (and confirmed on Thursday). If these get challenged, then you
might consider puts/put spreads.
As mentioned above, biotech
(
$BTK.X |
Quote |
Chart |
News |
PowerRating)
was one of the many sectors that made a pivot low by rallying sharply on
Thursday. Watch this low. If it is approached, consider the purchase of puts and
put spreads.
Consumer non-durable
(
$CMR.X |
Quote |
Chart |
News |
PowerRating) also
formed a pivot low on Thursday. Watch this low. If it is approached, consider
the purchase of puts and put spreads.
Follow Up
As you know, I am a strong believer of not
getting too greedy. This is why I always preach about taking profits along the
way. I hope you heeded this warning and your long put positions were at a
minimum coming into today.
Best of
luck with your trading on Friday!
P.S. Reminder:
Protective stops on every trade!