Pre-Market Alert: Another Bloody Open

Cancel UYG Sell Order

By Bryan Bottarelli
Wednesday, October 08, 2008 9:29 AM EDT
Wed, 8 Oct 2008 13:29:00 GMT

Dear Bottarelli Research Member,

Man, what a mess.

Over the last 5 trading sessions, the Dow has lost 1,400 points. And over the last 15 months, American retirement accounts have lost over $2 trillion dollars.

I’ve never seen volatility like this before. This morning’s coordinated rate cut, for example, was initially met with major optimism — but then sellers came in and absolutely crushed the pre-market futures.

To be honest with you, it seems like Eli Lilly and Pfizer (the two manufacturers of anti-depression drugs Prozac and Zoloft) will be the only ones benefiting from this market news.

Now I must tell you this. The markets will not continue losing 500 points every single trading session. We will see a bounce. Perhaps a really big one. And soon. Therefore, I’d like to maintain our UYG November 13 Calls (UUF KO). As you know, we entered these calls yesterday for $3.30, anticipating a coordinated rate cut to spark a rally. Well, that rally occurred initially, but the tremendous volatility has now pushed the markets lower once again.

Either way, I’d like to maintain this position until further notice. If you’d like to take the safe route, you can close it off at the open. But for me, I will continue to maintain this position, using our November expiration to our advantage.

At the same time, gold is soaring this morning, so maintain your AEM October 45 Calls (AEM JI) as well.

I’ll be out when the markets open with more updates. But until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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