Business Magazine

Monday Market Movement – Testing Those 50 DMAs Again

Posted on the 17 December 2012 by Phil's Stock World @philstockworld

With just 7 days until Christmas there is, so far, no Santa Clause Rally and once again we see our indexes going weak – day after day as no good move goes unpunished by relentless sellers.  

They may be selling for tax reasons, they may be selling out of fear of the Fiscal Cliff, they may be selling on the Fundamentals of European weakness – it doesn't matter much WHY they are selling once the technical signals go down and we're right on the cusp of that as we test our declining 50 dmas with the Nasdaq already failing it's 200 dma as well.  

We could give the Nasdaq a pass, based on the undue influence of AAPL but we must take it seriously if our other indexes begin to join it below those blue lines.  The S&P actually did fail 1,415 and our 3 of 5 rule dictates we flip more bearish if they can't recover today OR if any of the remaining 3 indexes join it on the downside.  

Mayan Calendar Fiscal Cliff Prediction © RJ Matson,Roll Call,Mayan Calendar Fiscal Cliff Prediction,Fiscal Cliff,Slope,Congress,Federal Budget,US Economy,Spending Cuts,Tax Hikes,mayan calendar
In our Income Portfolio (updated this weekend) we have just one hedge and that's the TZA April $15 calls, which we bought for $2.13 and are now $2.01 but we sold the TZA Jan $22 calls against them and they were $1.56 and are now .13 (and we need to buy those back if any of our levels break) and that means we're into those April $15s for net 0.70 and TZA is currently at $14.93 so very cheap insurance to protect our generally bullish portfolio

If we trigger the buy-back of the short Jan $22 calls, we will look to sell something like the Jan $17 calls (now .50) for maybe .75 and we can spend $1 to roll our April $15s down to the April $13s (now $2.82), or actually just .81 and that puts us in a $13/17 bull call spread that's in the money and offers us (with 50 contracts), $20,000 worth of downside protection on a very small dip in the Russell.  

Of course that's AT LEAST $20,000 worth of protection because we still have plenty of time to roll and adjust but the short story is, this was nice, cheap insurance and because we SOLD premium, we're in fantastic shape for the next few months.  That's especially gratifying as we are also moving into the…


This article will become free after 48 hours (see below for free content). To read the rest of this article now, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, additional member comments, and other members-only features - Subscribe to Phil's Stock World by clicking here.

You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

  • Shilo Sanders- Son Of Deion Sanders Thanks Courts For Allowing Him To Live With...

    Shilo Sanders- Deion Sanders Thanks Courts Allowing Live With Pilar

    ChristianNews Shilo Sanders, the son of NFL Hall of Famer,  Deion Sanders took to twitter to “thank” the courts for allowing him to live with his mother, Pilar... Read more

    The 04 August 2017 by   Firstladyb
    SPIRITUALITY
  • “I Feel Great”

    Feel Great”

    Jakub went to his doctor's office believing that he had a back injury, but returned with a chocking diagnosis instead. He had type 2 diabetes - in spite of... Read more

    The 04 August 2017 by   Dietdoctor
    DIET & WEIGHT
  • July Allotment Recap (2/2)

    July Allotment Recap (2/2)

    Sunday afternoon saw us return bravely to 24a even though there were more thundery showers foretold by the weatherman. I will admit that I guffawed at the... Read more

    The 04 August 2017 by   Chrryblossomtat2
    GARDENING, HOME
  • Culinary Delicacies in Croatia- What to Eat and Drink in Croatia

    Culinary Delicacies Croatia- What Drink Croatia

    In my earlier post, we spoke about how Croatia is a stunning European destination, let us now see what are the culinary delicacies in Croatia or what you can... Read more

    The 04 August 2017 by   Kash Pals
    FOOD & DRINK, A-CLASSER
  • #Golf Training Aids Spotlight: The Delta Putt

    #Golf Training Aids Spotlight: Delta Putt

    Do you consider yourself to be a strong putter or do you feel you could improve your make percentage on the green? Most amateurs could use help with the flat... Read more

    The 04 August 2017 by   Golfforbeginners
    GOLF, SPORTS
  • Three Incredible Hikes in Southern Iceland3 Min Read

    Three Incredible Hikes Southern Iceland3 Read

    Nature takes center stage in Iceland, where there's a stunning view around every bend: massive glaciers, expansive lava fields, powerful waterfalls, black sand... Read more

    The 04 August 2017 by   Healthytravelblog
    TRAVEL
  • What I Wore: Daytime Pajamas

    What Wore: Daytime Pajamas

    Pajama top: ELOQUII (14) | Pajama pants: ELOQUII (14) | Shoes: ASOS (similar) | Earrings: J. Crew ( same in different colors, similar concept in same color) |... Read more

    The 04 August 2017 by   Wardrobeoxygen
    FASHION, SELF EXPRESSION, SHOPPING

Paperblog Hot Topics

Magazines