Most traders are unsettled by 3 day's of reversal in the market......
Logical question IS...what CHANGED???
First CHANGE is that we are @ elevated levels in market...which warrants correction without reason......
Second CHANGE is that there HAS been a concerted BUYING by hedge/mutual funds..which MAY be @ tail end......
Third CHANGE is that lot of traders are locking serious profit........
This HAS resulted in a S&P 500 loss of 2.45%...on a closing basis....HIGHEST close 1071.66 & Friday's close 1044.38 a loss of 26.28 points or 2.45%.....
We all know that a retracement of 3% is possible any moment.....BUT as the markets are elevated 5% MAY not be out of the question.......
BUT...there is HOPE for next 3 days....month end window dressing..which MAY take us into new HIGH territory.......
October MAY start WEAK and MAY end up DOWN 10% before October is over......that IS my GUESS....& I will be careful as to where I put my money IN......
In October Techs are most vulnerable....as they have led this rally......
Economic Data will be positive going forward...but it will be WAIT & SEE for the markets.....so end of October MAY give "another buying opportunity"
SO....how am I positioned for October???
It is in sectors which have lagged recently..Gold,Silver,Oil,Solar,AG & some tech...
I will seriously be concerned in being overweight in Techs & Financials...they MAY take the most brunt of October selling.
Good luck in your OWN strategy & ensure your comfort level with market gyrations.
BLOG does NOT give buy or sell.
Saleem
6 comments:
Hi Saleem,
I agree with your analysis of the market. A 10% correction would not be out of the question by OCT 31st. Selling GE puts at 12 or 13 might be profitable and using the proceeds to buy long calls. Keeping my powder dry......BUCY is a good choice at lower prices.
Best Regards
Hi Standards,
Thanks for your feedback.
I am still trying to LEARN covered call strategy....not sure what to do..IF market tanks.....
I MAY just shrink the size of my portfolio further.....which MAY be conservative strategy.
I will keep an eye on BUCY...what is an attractive entry point on BUCY...
Saleem
Hi Saleem,
If market tanks buy back the covered call at a reduced price if you are out of the money. CC only good on stable to slightly rising stocks to gain extra income. Sell puts when you think market has bottomed. You will either have the stocks put to you at your predefined price or collect the premium. BUCY seems to have pretty good support at 27.
Hope this helps
Hi Standards,
Thanks for your explanation for CC & put strategy.
BUCY will be in my focus..did some chart analysis..50DMA looks like support???
Saleem
Hi Saleem
Hope your health is the best--I got the flu
i ach all over
I thinks the market will close green and a lot higher
Europe is up
China was down very mixed signals
PLease keep us posted at to CC
AAPL is up $2 bucks pre-market
Cheers
HI C,
Health wise NOT doing well @ all.
I am glad market is doing well.
Saleem
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