Charging Towards 8,000

Another Strong Push: Can it Last?

By Bryan Bottarelli
Thursday, April 02, 2009 10:17 AM EDT
Thu, 2 Apr 2009 14:17:00 GMT

Dear Bottarelli Research Member,

I mentioned yesterday that we were purposely keeping the trading ledger on the lighter side, simply because every new trading day seems to offer a different perspective on the global economic situation. Today’s mood is decidedly bullish, which has blasted the Dow up 200 points. This move has broken above the previous high set last week. As I write, the Blue Chips have gotten within 28 points of breaking through the 8,000 level, as you can see below:

INDU

While I don’t necessarily buy into this upside push, the proper tactical trading strategy says that we must respect it. Therefore, let’s go ahead and trim down our ledger. This includes closing out the MTB April 45 Puts (MTB PI), AET April 25 Puts (AET PE), and UGL April 33 Calls (UGL DG). Now don’t get me wrong. My bias on all three plays remains in tact. But right now, the sentiment clearly favors the bulls, so we’ll slightly adjust our ledger to carefully reflect this unbridled optimism. After selling MTB, AET, and UGL, we’ll be left holding the DO April 65 Calls (DO DM). With oil’s large upside move today, this position should be in good shape.

DO

Going forward, I’ll certainly alert you to any new trading opportunities. In fact, if these gains begin to give out, we’ll have plenty of powerful put-play candidates. But until then, let’s see how long the bulls can extend their upside run. And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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