Incredibly Skittish

LEH Spooks Market

By Bryan Bottarelli
Tuesday, June 03, 2008 3:52 PM EDT
Tue, 3 Jun 2008 19:52:00 GMT

Dear Bottarelli Research Member,

The markets have been tremendously skittish this afternoon, as concerns about the fate of Lehman Brothers (LEH – NYSE) caused the knee-jerk reaction that sent the major market averages tumbling right around 1:25 EST.

But over the next hour, we’ve seen yet another recovery that trimmed 100-points off this momentary round of selling pressure, which has left the major market averages well off their lows of one hour ago leading into the close.

In situations like this, it’s always smart to hold a ledger of both calls and puts. As we saw this morning with Las Vegas Sands (LVS – NYSE), this allowed us to lock in gains on one side of the market action while still maintaining exposure to any forthcoming intra-day reversals. So in that spirit, I’d like to maintain all of our current positions in an attempt to withstand the whip-saw action and eventually emerge profitable.

Now, it’s come to my attention that our DE June 80 Calls (DE FP) briefly dipped down to our stop limit before quickly recovering, so I will continue to follow these calls for the benefit of those still holding. After all, in situations like this, where brief periods of knee-jerk selling pressure lead to temporary moments of panic-selling, I want to make the best attempt possible to stand tall and not fall victim to the skittish investors fueling these moves. Therefore, I want to continue holding our ICE June 125 Puts (ICE RU), DE June 80 Calls (DE FP), PBR June 70 Calls (PMJ FN), CMI June 70 Calls (CDM FN), and PTEN June 35 Calls (NZQ FG) heading into tomorrow.

I completely recognize that afternoons like this can cause moments of indecision, but I’m here to offer you my very best intra-day guidance in the midst of the calamity. And right now, that guidance is to maintain the positions listed above leading into tomorrow.

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 June 2008