MoneyAccumulator.com

by Das Brain

Over the last 2 trading sessions the stock market indexes has been beaten down. Yesterday the first trading day of the 2008 the markets were slammed and also on the last trading day of 2007. Not very good signs for the health of the U.S stock markets at all.

Jason Ng of Masters Of Equity sums it up quite well in his daily market comments.  He  mentions that the U.S markets are baffling many analyst and has recently broken a trend to the downside.  These are not very encouraging signs for investors, however the markets to go up and down fluctuating while going lower or higher, so there is some opportunity for short-term investors if you can time it right, get in and out quickly on specific stocks.

I’m currently looking at ITM (in-the-money) options on QQQQ, waiting for a bounce. The Nasdaq has taken a downward hit lately and a bounce should appear soon. The options I am looking at is the March 2008 calls at a strike price of $50.

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Another call option I just recently purchased is for Research In Motion (RIMM) this is a OTM(out-of-the-money) play which is a little more risky. It is the March 2008 calls at strike price of $120. RIMM recently jumped from around $106 to a high of $121 area on good earnings report, and my feeling is that it should hit the same level by March 2008.

At the end of January is the FOMC meeting, where the Fed may reduced interest rates again by a quarter point.  This might give the U.S stock markets a lift, however with the way the market is behaving lately I agree with Jason Ng on this “who knows what will happen.“  That is why, risk and money management should be practiced deligently here.  Place those stop loss orders, just in case of another severe downward movement.

I will post the results of these trades when they have been closed.

Please read my Disclaimer, before you decide to trade based on these opinions. 

 

 

 

 

 

 

 

 

 

 

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This entry was posted on Thursday, January 3rd, 2008 at 12:18 pm and is filed under Option Trading, Stock Trading. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.