fubsy
I got out of DELL at $45 a while back after covering some 40calls I had written for protection back when the stock was down around $38. After it passed $50 I bought some Jan45s I held while I was away for a few days over Christmas. Sold them yesterday and flipped some Feb45s, then bought some Feb50s. Today Merrill Lynch decided DELL should never have gone up as far as it did, just like I thought a few weeks ago. I'm sure that helped it dive a bit harder than the rest of the Naz 100.
I'm comfortable where I am at the moment. On a 4_1/4 pull back on DELL, my value pulled back only 1_3/4. If the market dumps further, and does not bounce back, losing the premium I paid won't kill me. I'm still mildly bullish near term on the overall market. By the time earnings are reported, I'll either be glad I turned a profit on the calls, or I'll be glad I didn't buy the stock above 50. At that point I might go long and write some calls.
Tomorrow is anybody's guess as far as I can tell. I believe a lot of today was a delayed action I expected yesterday. I think people waited till 2000 to take some profits, but didn't rush it when the NASDAQ gaped so much in the morning, then bounced off the sudden drop. Today was more of a consistent sell off, and while certainly not an all out panic, it was certainly a day to lock in any big gains left over from last year. It's just a hunch, but I'm thinking Dow will give away 11,000 very reluctantly. If it really loses 11,000 I might be willing to bet it will drop to 10,000. DELL will just go where the market goes for a while, I think.
Dan |
