Position Update

Bears Still In Control of OIH

By Bryan Bottarelli
Thursday, August 31, 2006 4:32 PM EST
Thu, 31 Aug 2006 21:32:00 GMT

Dear Bottarelli Research Member,

We witnessed another day of the markets on “auto-pilot,” as the Dow closed with a mere 1.76 point loss on the day. Scintillating action!

All the head traders I listen to say the floor is a total ghost town, and it could get even worse tomorrow as everyone leaves ahead of the three-day holiday weekend. Therefore, my game plan is to use any market down-tick to take profits on WFC and OIH.

I must admit, I was slightly concerned when OIH was posting a $2.00 intra-day gain, but today’s closing day tick confirms that the bears are still in control. As you can see by the chart, the OIH attempted to engulf yesterdays’ red tick, but that attempt was quickly rejected. This tells me we could see more downside ahead, so hold your OIH September 135 Puts (OIH UG).

OIH

When I look at Wells Fargo (WFC – NYSE), I can’t really tell you anything I haven’t already said. I’m still bearish on the stock, which makes the WFC October 35 Puts (WFC VG) a good position at current levels. Like a B-rate horror movie, the stock just can’t seem to die off for good. But eventually, I think we’ll see red.

Until tomorrow,

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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