Maintain DXD and QLD

Coming Breakdown?

By Bryan Bottarelli
Friday, December 05, 2008 10:09 AM EST
Fri, 5 Dec 2008 15:09:00 GMT

Dear Bottarelli Research Member,

In yesterday’s alert, I mentioned that the recent trend has been “buying the bad news,” which is a trading tactic used by the bulls to assume that all of the negative news has already been priced into the market. But in my view, when we get a job’s number like we did this morning, it’s awfully difficult to take this approach.

As you’ve probably heard, non-farm payrolls dropped by a whopping 533,000 in November, the worst monthly job loss in 34 years. Over the last 11 months, a total of 1.9 million jobs have been lost, bringing the jobless rate to the highest level since 1993. Considering all of the massive job-cuts that were announced last week, it looks like December’s number could be just as bad. I never thought I’d say this, but going into 2009, we could very well hit an unemployment rate of 10%. Think about that for a second. 1 out of every 10 people in this country unemployed? I can’t even fathom.

With news like this, I cannot offer any guidance except for you to maintain your downside bias. That means holding your DXD December 80 Calls (DZS LB), which have now broken into profitability. And it also means holding your QLD December 22 Puts, which are just about to break into profitability.

Looking at the DXD chart below, this ultra-short asset could be on the verge of a major upside blast-off, using the 50-day moving average as a support point. Continue to hold both downside-market plays for more upside.

DXD

At the same time, continue to hold your BNI December 75 Calls (BNI LO), which act as a hedge play against an unexpected and sudden market reversal. And should any other trading opportunities arise, you’ll be the first to know.

BNI

Until then, we’ll sit tight. And while we have a moment, be sure to take advantage of our special “End of Year” renewal offer, and lock in the best prices we’ve ever offered in the history of Bottarelli Research. Details below:

DON’T FORGET: SPECIAL “END OF YEAR” RENEWAL WILL EXPIRE: Right now, you can lock in our special“End of Year” renewal offer that extends your Options membership for the lowers prices we’ve ever offered in the history of our research service. Why extend your membership? That’s simple.

As I’ve mentioned, I now feel like a new “Age of Volatility” is upon us. In other words, the incredible volatility levels that we’ve seen this year are no longer the exception — they’re now the norm. The only way to prosper during these times us by carefully positioning yourself in the best call and put plays — and locking in gains the instant these plays move your way. Over the last 3 months, Bottarelli Research has locked in profits on 54 out of 66 trades, good for an amazing 82% accuracy rate in one of the most volatile markets in history.

As we head into 2009, I want to ensure that you continue receiving these winning plays — and that’s why I’m offering you the opportunity to add 9 months onto your membership for the lowest prices of the year. Please don’t miss out.

This special offer expires on Friday, December 19th, so act now. Give yourself an early Christmas present, and lock in this discounted membership offer now!

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And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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Other Options Alerts From December 2008