INDEX UPDATE
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Unfortunately for those playing PUTS right now, like me, there was alot of good news with the Asian markets up huge, except for KOREA, and the huge possible merger of GLAXGO and SMITHKLINE which may be double the size of the MCI merger. Such merger appears to be really pushing the Euopean market up huge also. Glad I did not play PUTS on the Drug index.
I am getting the feeling that the current PUT players will be getting whipped sawed. I checked the Asian markets and most of them had large gaps up forming a star for Japan, which is an early warning signal of a reversal as soon as tonight. Hong Kong gapped up about 550 pts(5%), and so did Japan, and Taiwan.
The short-term technicals for the DOW is now in the upper middle range due to Fridays dip, so it has room to move up and as I said before when the technicals are in the overbought region it can still move up strongly, and have seen the DOW move 100-200 points up more. To make matters worse the DOW is not even in the overbought range yet.
The technicals on the NAZ is already very high and has much less upside room than the DOW for today. Also, just heard that Natl Semi a SOX component, announced an earnings warning and per CNBC did blame Asia. Since the options wont open until around 9:45-9:50, will be watching the impact on the SOX for any weakness, but doubt there will be much since the futures are up huge near their maximum levels.
Unfortunately, I really feel I am going to get whipped sawed with my PUTS since there will be some sort of profit taking soon, but I won't stick around with my PUTS to see how long it will take before it pulls back. Its CHICKEN TRADE time, and now the question is whether to get out as the option opens or wait for a pullback. I am leaning towards getting out right as soon as the option opens if all the indexes are up at the open.
Remember I said that I will probably get whipped sawed - since the market could see profit taking as soon as tomorrow, but I ain't going to chance it.
The those who are watching my XAL and DJX PUTS, they are profitable so hopefully the loss will be minimal. The other possibility is to enter calls to form a strangle, since the PUTS are still in the money and there should be some sort of pullback soon. The problem is entering the calls as the market is running up strong with the premiums at maximum levels.
Guess, Im going for a CHICKEN trade.
Seeya |
