Position Update

Plus: A Scary Thought

By Bryan Bottarelli
Thursday, September 18, 2008 10:00 AM EDT
Thu, 18 Sep 2008 14:00:00 GMT

Dear Bottarelli Research Member,

As the major market averages were dropping precipitously yesterday, a scary thought jumped into my mind. You’ve probably had the same thought at one point or another — but the terrifying nature of the idea helps you to quickly dismiss it. The thought I’m referring to is this:

“Are we setting up for a 1,000-point down-day on the Dow?”

Yes, losing 1,000 points in one single trading session is certainly a scary idea. But I have to be honest and realistic with you. If there was ever a time where a 1,000-point down-move could happen, it’s right now. Therefore, I want to take every precaution that we can to not only protect against a move of this magnitude, but also to profit off such a move.

That’s why I’d like to continue holding our DXD October 70 Calls (DXD JR). As you know, we entered these puts yesterday for $4.40, and at the close of trading, we had a nice little 25% profit in hand. But I think we still have more selling pressure to come. Therefore, maintain these ultra-short calls for more gains.

At the same time, we’re also holding two safe and conservatiave upside plays, just to participate in a snap-back rally. Both the KMB October 65 Calls (KMB JM) and the TSO October 20 Calls (TSO JD) are sitting close to our entry-point levels, so let’s also maintain these two positions as well.

TSO

As a side note, I know that some members have continued buying the TSO calls down at the $0.70 level. If that includes you, then I would recommend locking in HALF of your profits. After all, with these calls hitting a high today of $1.20, that’s a 72% gainer. In this market, take that money and run!

I’ll be out later in the session with further updates. But until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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