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OPTIONSMART MORNING UPDATE: Sunday Edition

1. OUTLOOK:   The market will be looking to see if there's actually something fundamental behind the recent 30% rally. Next week brings a bunch of key indicators that could put the economic picture into sharper focus. The Conference Board will release its monthly report on consumer confidence on Tuesday. An industry report is expected to show sales of existing homes increased slightly in April. The report from the National Association of Realtors is due on Wednesday. April durable goods orders, weekly jobless claims and new home sales are all due on Thursday. The technical chart represents a pivotal moment on Wall Street.

2.  OUR OPTION REPAIR TECHNIQUE: ROLLING SPREADS No one can predict the direction of stock prices with 100% likelihood. That's why you need a backup plan to avoid losses. Rolling is a great technique to use when you want to hang onto a position you believe in. Rolling a spread refers to the process of closing both legs of an existing spread, and then opening two legs of a new spread using an option of the same type (call or put) at a different, typically more distant, expiration date and/or different strikes.

Here is a recent example from the "QQQQ Picks" Track record:

The chart above shows how did we repair the spread in early March by rolling the spread into April and paying extra 0.36.

We found this roll reasonable because the general trend was up.

This technique works very good in almost any market environment. This advanced technique is a powerful toll to reduce risk for our portfolios. Learn more about our QQQQ Picks!  Take advantage of our special offer below!

5. WISDOM NUGGETS: Bottoms take longer to shape than tops. Greed acts more quickly than fear and pushes stocks to drop from their own weight.

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