Follow Up: JCP Triggers

Plus: DUG Update

By Bryan Bottarelli
Tuesday, December 30, 2008 2:40 PM EST
Tue, 30 Dec 2008 19:40:00 GMT

Dear Bottarelli Research Member,

There hasn’t been too much trading activity today, as news of the U.S. government expanding their bailout for General Motors has pushed the Dow up over 100 points. But as you can see from the chart below, this upside move has only pushed the Blue Chips to the top of their 50-day moving average. As you know, this level has acted as resistance for most of the 2008 trading year, and I doubt we’ll witness any upside breakout (or breakdown, for that matter) over the rest of the week. Therefore, we’ll continue to carefully watch and monitor the markets without initiating any new trades.

INDU

In terms of some good news, our JCP January 20 Puts (JCP MS) traded as high as $2.90 in yesterday’s trading, and they also traded as high as $3.00 in today’s session. This move has officially triggered a sale, which allowed us to lock in a respectable 24.45% gainer.

On the other hand, our DUG January 31 Calls (DZG AE) continue to drift lower. Even as oil prices fell again this morning, DUG just cannot get any upside traction. Ever since paying out their cash disbursement, the entire ultra-short vehicle has been stuck in the mud. I’d like to give this position one more day to show a sign of life, but if nothing occurs by tomorrow morning, we’ll have no choice but to close it out.

DUG

Going into tomorrow’s half-day, I’ll follow up on our remaining 2008 position. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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