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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (25614)	1/22/2003 10:35:03 PM
From: Jeffrey S. Lillie	Read Replies (2) \| Respond to of 30712

Hey mish, couple things...first what is SOTU? i may get a reprieve, way too early to tell. asia doing ok tonight. real key is europe and the reaction to initial claims at 830 and leading indicators at 10am. as for RR, in a downtrend i play the bounces via calls lighter than i do a put play in a downtrend. if we open soft and i commit the fourth and final chunk of funds to calls around 869/870 (not likely to happen) that would be one half of the funds in account or half of what i will be playing in puts later this week/early next week. basically i have committed 3/4 of the funds to long calls that i was planning on. Now a 20 point bounce may not seem like a lot to you, but for me that is a sweet trade. 10 is decent, 15 is nice, 20 is downright sweeet. i liked my risk reward with first entry at 888 spx yesterday at close. i felt 878 would be the worst case for this selloff. granted with the EOD dump, 869 came into play, but when i started legging into this move it just wasnt an option (no pun intended). So in my line of thinking, 878 is bottom and i started taking positions as we approached. left room for one more buy tomorrow in light of our pathetic close. i also expected a 20-25 pts bounce (possibly 30) from the low. if 888 then 908-913. if 878 then 898-903. if 869 then 889-894. even if we hit worst case, i get a weighted avg profit on about 8-9 spx points or about 5 pts on the option. not great, but thats worst case. best case is a bounce tomorrow at open( i wont buy last chunk of calls if we are up in am) and my avg entry is 884 with an expected bounce to 898-903 or profit of about 10 pts on 14 pt rise in spx above my avg entry. so if up tomorrow and rally to 898-903, i will get a 10/47.8 or 21% gain worst case. for me thats just fine for three to four days on 3/8-1/2 of an account. nothing like the % gains i get near expy, but would make for another great trading week. felt like rambling. j