Hitting a Wall: Take SHLD Profits!

Markets Turn Aggressively Lower

By Bryan Bottarelli
Tuesday, September 01, 2009 11:55 AM EDT
Tue, 1 Sep 2009 15:55:00 GMT

PLAY: Sell your SHLD September 65 Puts (KTQ UM) at market, good for the day.

Dear Bottarelli Research Member,

First off, congratulations on your PRU winner. If PRU bounces, we just might enter into another round of puts. As you can see below, it still has plenty of room to fall. In the meantime, let’s dive into today’s action.

PRU

Within the last hour, the major market averages have hit a wall. Thud! Like a bird flying into a closed window, the bulls have been sucker-punched, and they don’t know what hit them. Faced with this situation, we’re going to take away our so-called “safety net,” which means closing out our AMZN September 85 Calls (QZN IQ). Now that the bears have awakened, our current downside holdings should come into play. Therefore, close this position now.

At the same time, let’s also lock in profits. Specifically, the SHLD September 65 Puts (KTQ UM) that we entered for $3.70 have now hit a high of $4.80, good for a 29% gainer. Let’s take these profits now!

SHLD

PLAY: Sell your SHLD September 65 Puts (KTQ UM) at market, good for the day.

Going forward, continue to hold your SDS September 45 Calls (SSH IS). As you know, we’ve added to this position in preparation for the downside move that we’re seeing today. If the downside momentum picks up, this position could appreciate rapidly.

SDS

Let’s also continue holding our AAPL September 170 Calls (APV IN), just in case the dip-buyers once again show their face.

As always, I’ll keep you fully informed on any new trades. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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