DOT 550 has been a major resistance on the way up, whatever one can call this 550 where DOT retreated on its way up, the history of this index is limited and DOT is litered with big names and successful companies and some with .com at the end. I would think we had this nice test of 550 area, if we break this today and tomorrow we may see DOT drifting to 450 but most probably the selling has been quite steep, the calls to deliver stock after such a steep decline will be going out, the outstanding shares are limited and if what I am looking at technically is watched by others who shorted this index we may see a break of 625 the next resitance now, I would assume that it is worth a shot to go long at these depressed levels, we laways had this fear that what is going to happen to the markets if internets bubble is pricked we have this bubble deflated and all said and done we are at quite decent highs as far as market is concerned, NDX 1980 is tested and 1292 my opft repeated elvel was tested yesterday a point lower where SPM came back and closed at around 1302 level, so for me 1292 should hold I think we are seeing a movement in sectors although we lost a lot of premium on our May calls but selling DOT outside the moneys helped a little and now we can afford to add at these levels like I did last night, I will still not sell puts, if EGRP looked at 144 good the puts 100 were far enough now 30$ in the money, we may see that loss premium in calls is a loss which can always be hedged against a falling index but in the money puts are painful and crucifying.
I think we need this 650 to hold and if this breaks we are going to 450, if that happens I think NDX 1780 will be the target or 1255 on SPM, yes SPm may not sell as steeply rather BKX OSX and RUT may bring some support to the market.
I see speculative money losing big in this market, anyone with exposure to DOT only would see heavy selling and toning down of account on the othr hand if you were in the right sectors and have exposure in BKX OSX some comfort was for a take. It sounds strange but towards the end of the day if we hold the 550 support or even tomorrow we will move higher, this market has cut the 'asset inflation' which must have been a cause of great concern for AG, now we need to look at SPM for the direction and impact of DOT move have proportinately very much sterlised.
I see some opportunities in leading stocks only if you buy AOL YHOO EBAY AMZN INKT ERGP SCH at these levels any bounce would give you good trading profits like the bounce on Friday did. I will only propose a trade if DOT 568 is taken out and SPM stays above 1302 atleast after 45 minute of opening, also \I will cut this position by selling 750's of DOT calls so as to recover my premium if I see DOT breaking 55. and in liklihood closing below it.. A break of 1292 on SPm will take us much lower and all short trades will need to employed, keep watching for 902-900 arera on BKX if this cannot be taken out and DOW stays firm the market on back of OSX may see some movement as money flow in key lagging stocks moves up. |
