Action Alert: Take FXP Profits

Lock in Quick 28% Gainer, Roll into SRS

By Bryan Bottarelli
Wednesday, January 27, 2010 11:06 AM EST
Wed, 27 Jan 2010 16:06:00 GMT

PLAY: Sell your FXP 25 September 9 Calls (FVW II) at market, good for the day.

PLAY: Buy the SRS July 9 Calls (SKW GI) at or under $1.20 (or best price), good for the day.

Dear Bottarelli Research Member,

Good morning. The Ultra Short FTSE/Xinhua China 25 September 9 Calls (FVW II) that we entered on January 25th for $2.00 have just high a high of $2.57, good for a quick and easy 28.50% gainer. As you can see from the FXP chart below, this ultra-short Chinese play has been shooting higher, and I don’t want to let the gains slip through our fingertips. In this market, we have to be quick and decisive, and that’s why I think it’s now a good idea to lock in these profits. We can always re-enter on a dip.

FXP

PLAY: Sell your FXP 25 September 9 Calls (FVW II) at market, good for the day.

After making this sale, I’d like you to get positioned in a new protective play, the UltraShort Real Estate ProShares (SRS – NYSE).

SRS

I will follow up on this new position in your next LEAPS alert, but the time to remain protected is now. The recent housing data showed that December home sales were down nearly 17%, making the largest monthly drop in more than 40 years. This clearly indicates that the real estate market is still not close to a bottom. As this reality hits home with investors, we’ll see a new shift lower in the housing sector, which could spark a rally in the SRS. Let’s take our China-gains and shift our protection into the SRS now!

PLAY: Buy the SRS July 9 Calls (SKW GI) at or under $1.20 (or best price), good for the day.

Sincerely,

Bryan Bottarelli
Editor, Bottarelli Research
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