November 21, 2008

DISCLAIMER: These are trades I am doing and may not be right for
you. Use your own Due Diligence when making financial decisions of
your own choosing. This is NOT a recommendation of any security.
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PRE-MARKET UPDATE:

WARNING: There is still a probability we could see DOW 6800 in the next few days. We could easily see a 1000 Point plunge in the DOW today or tomorrow…

But… We have to assume at some point that the probabilities are that the market will re-bound.

I’ve been keeping an eye on the DOW, but I was reminded today that the S&P500 undercut it’s 2002 lows as shown here yersterday:

SP500 Undercut 2002 Lows

In addition, the market and OIL prices have been moving in step – OIL went below a key level – $50 a barrel yesterday. That’s a target for a reversal higher. Also, as I mentioned, the US Dollar has been moving in an inverse relationship to the markets and this morning the US Bullish etf- UUP has turned lower.

Even though there may some additional risk on the downside, the bigger risk is not getting involved at some point in the market while the market is at the lowest point it has been in 7 years.

I am treading lightly but will be buying today based on the graph above, however I will do so with a hedge of either SDS purchases or selling calls against stock to soften any turn lower in the short term.

It’s impossible to pick a bottom in the market – let’s be clear.

Only invest what you can afford to lose.

WARNING: There is still a probability we could see DOW 6800 in the next few days. We could easily see a 1000 Point plunge in the DOW today or tomorrow…

Trade With Confidence