End of Day Follow Up: What a Move!

Dow Advances +300 Points

By Bryan Bottarelli
Tuesday, September 18, 2007 4:31 PM EDT
Tue, 18 Sep 2007 20:31:00 GMT

Dear Bottarelli Research Member,

Wow!

In one powerful and electrifying shot, the Dow gave us everything we need to know about its relationship to the 50-day moving average. In short, this sets an upside tone for Q4 that should lead to the taking out of the mid-July highs. Take a look at today’s powerful 300 point advance and you’ll see what I mean:

INDU

Now Here’s the Thing: I’ve been talking to many high-level technicians and traders throughout the afternoon, and today’s upside move could just be the beginning of an extended upside run. After all, today’s big advance came on relatively low volume, which indicates that today’s move was nothing more than short-covering. Can you imagine what’ll happen when strong buyers come in?

Furthermore, I expect to see the International markets make powerful advances off today’s U.S. move, and this could further extend the upside momentum — especially when it comes to our CHL October 70 Calls (CHL JN). That’s why I’d like to continue holding all of our call positions. Case in point, today’s upside move on the iShares FTSE/Xinhua China 25 Index (FXI – NYSE) is an indication of what could be extended into tomorrow:

FXI

In addition, our NILE October 90 Calls (JWU JR), GS October 200 Calls (GPY JT), and UA October 65 Calls (UA JM) have all closed today’s trading session at their highs, so let’s let the upside extend into tomorrow. Even our longer-dated plays on DHI January 2010 10 Calls (YRI AB) and ISIS January ’08 10 Calls (QIS AB) are shooting back to life, so let’s keep holding to fully capitalize on this tremendous upside momentum! All signs indicate that the upside gains will continue, and I fully plan to capitalize on every tick. Until tomorrow,

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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