OPTIONSMART MORNING UPDATE: Sunday Edition

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OPTIONSMART MORNING UPDATE: Sunday Edition

OPTIONSMART MORNING UPDATE: Sunday Edition

1. OUTLOOK: Semiconductor stocks fell under pressure after disappointing earnings report from National Semiconductor. Weakness among semiconductors dragged the tech sector down. For the week, the Dow and S&P 500 ended with modest gains, while the Nasdaq ended lower. Nevertheless, QQQQ's implied volatility fell to 26.7. This fact clearly indicates that large traders don't buy put options in significant volumes to hedge their portfolios. Besides, the QQQQ intra-day chart shows that institutional traders switch on their "buy programs" right before the closing bell to accumulate stocks at lower prices. Therefore, bullish sentiment still prevails.

2. OUR MOST RECENT "MOMENTUM PLAYS" TRADE:
CSCO Jul 17/19 Debit Call Spread:
Bought @1.50 on 06/02/09 and sold @1.67 on 06/11/09 with a 11.3% gain in 9 days!

CSCO

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Based on 3-D Option Trading© Approach
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Very diversified, low-risk portfolio of 4-6 option positions
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3. TRADING OPPORTUNITY: None

4. OUR FREE MONTHLY TRADING RECOMMENDATION AUTO-TRADEABLE WITH OUR PARTNER BROKERAGES: to be published in June.

TWO MOST RECENT FREE TRADES:

QQQQ Jul 34/36 Debit Call Spread:
Bought @1.36 on 06/03/09 and sold @1.53 on 06/09/09 with a 12% gain in 6 days!
QQQQ Jun 31/33 Debit Call Spread:
Bought @1.45 on 05/11/09 and sold @1.61 on 05/19/09 with a 11% gain in 8 days!

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5. WISDOM NUGGETS: "It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction." Warren Buffett

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June 14th, 2009 at 5:37 am

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