Going Into the Final 30 Minutes

The Most Volatile Periods of the Day

By Bryan Bottarelli
Thursday, October 30, 2008 3:24 PM EDT
Thu, 30 Oct 2008 19:24:00 GMT

Dear Bottarelli Research Member,

I’ve watched CNBC all week long, and the discussion with every panelist has revolved around the same general question: “Have we hit bottom?”

Near as I can tell, 9 out of every 10 of these so-called “experts” has said yes, that the bottom has now been set. Now I have to tell you, when I see so many people leaning towards one side, it’s been my experience that they’re always wrong. That is why I think we have at least 400 points to drop on the Dow. In fact, an ideal situation would see the Dow dropping back down to its October 10th lows of 7,882 (which is over 1,000 points below current levels) and HOLDING this level.

DIA

If such a scenario plays out, this would establish a strong double-bottom at 7,800. And at this time, I’d be willing to consider the possibility that the bottom has been set. But until we have such a re-test, I must stress the importance of remaining nimble and being positioned for a sharp downside move.

As we approach the final 30 minutes of trading, you can expect more volatility and fireworks. Let’s continue to hold our three positions, which are the BNI November 90 Calls (BNI KR), LLL November 75 Puts (LLL WO), and DIA November 80 Puts (DIJ WB).And as always, I’ll tell you exactly how to manage them in these choppy waters. So until tomorrow,

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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