The Intense Selling Continues

Add LVS Puts

By Bryan Bottarelli
Friday, August 10, 2007 10:04 AM EDT
Fri, 10 Aug 2007 14:04:00 GMT

Dear Bottarelli Research Member,

At the open of today’s trading, the ratio of stocks falling compared to rising is a whopping 20 to 1. And as you can see below, the Dow is on the verge of penetrating below the 13,200 level, which acted as a support point five trading days ago.

INDU

If this level breaks, we could be in for yet another day of heavy selling pressure, so let’s position ourselves to ride any coming downside. That means taking a new put position in Las Vegas Sands (LVS – NYSE).

LVS

As you can see from the chart, LVS has been a major upside mover, but with overwhelmingly weak market internals, the shares can only withstand the selling pressure for so long. Even if the markets recover, LVS looks poised to take a breather and give back some of its recent gains. The stock is down $5.00 as I write, and it could move even lower next week, so let’s buy September puts to ride this coming weakness.

PLAY: Buy the LVS September 100 Puts (LVS UT) at or under $5.30, good for the day. Place a protective stop limit at $3.00.

Also, the intense selling pressure has forced us to close out our PCU September 110 Calls (PCU IB), but I’d like to maintain our ICE September 170 Calls (IHH IN). I have indications that ICE could pop the moment the markets turnaround, and I want to be positioned to ride this upside momentum.

*This is Important: As I mentioned before, the markets right now are incredibly volatile. In fact, they’re more volatile that I’ve ever witnessed. If you’re uncomfortable trading in this environment, I suggest taking a brief break. Or, at least commit less capital than you normally would to any new plays. These incredible price swings will not last forever, but since they’re happening now, let’s be smart about how we approach them. I’ll do my very best to navigate you through it all, and as always:

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From August 2007