Add to Your DXD Calls

Playing The Next Sell-Off

By Bryan Bottarelli
Thursday, December 04, 2008 10:15 AM EST
Thu, 4 Dec 2008 15:15:00 GMT

PLAY: Buy more DXD December 80 Calls (DZS LB) at or under $5.50, good for the day. Maintain your protective stop limit at $3.10 and pre-determined sniper sell at $10.20.

Dear Bottarelli Research Member,

From a market perspective, it appears like the “cool” thing to do right now is to buy on the bad news. According to this bullish thinking process, this seemingly counter-intuitive philosophy assumes that all of the bad news has now been discounted into the market, so you might as well buy now while valuations are still available on the cheap. After all, as soon as the news gets better, the markets will blast off.

INDU

Over the last three sessions, this position of “buy the bad news” has been the trading mentality. But I, for one, am not a believer. After all, let’s not forget that on Monday the Dow dropped 670 points. And as I write today, we still haven’t recovered all of those losses. In fact, if you study today’s Dow chart, you’ll see that the Blue Chips are once again approaching a key resistance level at the 50-day moving average.

A failure below this level, which has occurred consistently over the last four months, should spark a downside move below the 8,000 level. In fact, this could be starting to take shape right now. Therefore, I’d like to add to our ultra-short position on the DXD. Specifically, the DXD December 80 Calls (DZS LB) that we entered for $7.70 are now available for only $5.50. If the market sells off, as I expect, we could see an explosive winner. Let’s add to this position now!

DXD

PLAY: Buy more DXD December 80 Calls (DZS LB) at or under $5.50, good for the day. Maintain your protective stop limit at $3.10 and pre-determined sniper sell at $10.20.

At the same time, also maintain your BNI December 75 Calls (BNI LO) and your QLD December 22 Puts.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 December 2008