‘Show Me’ Week
No economic news today. The futures are a tad
better at this hour. The DJI futures on the Board of Trade are up 20 points, and
the S&P and Nasdaq futures on the Merc are up 2.10 and 7.00 respectively. In
Europe, the FTSE was up about .3% to 4944, and the DAX was up .6% to 4639. In
Asia, the Nikkei was .6% lower at 11,370, and the Hang Seng was more or less
This is a "show me" week for the market. Traders and investors will be
looking for ANY sign of life. I have oversold indicators up the wazoo, but I am
not buying anything until this market proves itself. As a matter of fact, I will
be looking to add put positions in the
PowerRating)s, and possibly
the Russell 2000 on strength. Perhaps the best we can expect of a
"bounce" phase in a bear market is sideways…
The best case for a reversal/bounce might be made by volatility.
Volatility spiked monstrously higher Friday morning before settling back down as
the market rallied, precisely as it did Wednesday. As I have mentioned before,
this type of behavior usually precedes a bounce, but this is a powerful bear
market, and I would not bet my last dollar on it. The VIX visited 30.00 Friday
(near the February highs), hitting 29.94 before settling at 26.65, down .81 on
the day. The VXN hit levels not seen since last November, hitting a high of
53.46 before settling at 52.24, a gain of 2.48 on the day. The QQV took out its
May highs, hitting 47.32 before settling at 45.52, up 1.49 on the day.
Trade Updates (6/07/02)
New Actions (New Recommendations)
Working Orders (Old Recommendations)
PowerRating) – Holders of the DYN January 15 call/June 20 call proxy
buy-write (long the January 15 calls, short the June 20 calls at $3.20),
buy the June 15 calls (to open) and sell the September 17.5 calls (to open)
for $1.00 credit (to you).
Recap of open trades
AOL — Long the October 20 buy-write at $16.30
Call Spread Positions
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