No Roll Over Yet

Remain Hedged: But Watch for Stability

By Bryan Bottarelli
Monday, March 17, 2008 11:16 AM EDT
Mon, 17 Mar 2008 15:16:00 GMT

Dear Bottarelli Research Member,

The market has now been open for around two hours, and I must admit, we didn’t witness the violent sell-off that I expected. Although the S&P 500 and NASDAQ hit new 52-week lows, the Dow has fought valiantly to avoid triggering a new low. Perhaps this is yet another bull trap, but the panic conditions that we saw in the pre-market futures have not yet translated over into today’s trading action. Nevertheless, it still remains a very smart idea to stay hedged. If the bears flip the switch — and the markets engage in a free-fall that mirrors panic selling conditions, we’ll be glad that we own the DIA April 114 Puts (DIA PJ).

DIA

At the same time, I received some comments about our FCX April 105 Calls (FCX DA). Based on last Friday’s alert, I have some members who executed a sniper sell on this position. I also have other members who are still long the position. Therefore, I will continue to follow it for the benefit of those who are still holding these April calls. As you can see below, FCX looks to have found a nice support point at the 50-day and 200-day cross, so it might be a smart idea to add to these calls on any market stability. It the timing is right, I’ll let you know.

FCX

I’ll also continue to monitor stocks that have been hitting new 52-week highs. In the midst of this very weak market environment, you better believe that any companies reaching new 52-weeks highs are remarkably strong. Therefore, names like FDG, PAAS, STLD, ASA, X, APA, AEM, and JOYG will all remain on my near-term watch list. But until further notice, let’s continue to sit back and watch today’s wild action unfold. And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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