Bailout Passes, Market Yawns

Hold DXD: Consider GLD Calls

By Bryan Bottarelli
Friday, October 03, 2008 2:07 PM EDT
Fri, 3 Oct 2008 18:07:00 GMT

Dear Bottarelli Research Member,

Now this is something that I DID NOT expect.

First off, the politicians should have waited until after the markets closed to pass the bailout bill. But as it stands, they’ve passed the bailout package intra-day (expecting a HUGE market rally, I suspect), and so far, that “huge rally” is not happening. In contrast, the major market averages have significantly reversed their earlier gains. At one point, the Dow nearly turned red. This truly cannot be a good sign. After all, if the markets cannot rally off the bailout news, then what will it take to spark an upside move? The answer, I fear, is “nothing.”

INDU

Therefore, going into next week, maintain your DXD Political Straddle, as we could see some big-time directional moves. I’ll also take another look at gold, with specific emphasis on GLD. After all, with $700 billion of new U.S. Dollars flooding into the global markets, the argument for gold looks very strong.

GLD

I’ll follow up on these plays early next week. But until then, have a good weekend. And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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