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US Stock Markets, It’s Aug’07 All Over Again

Published on January 9, 2008

US Stock Markets, It’s Aug’07 All Over Again

January 9, 2008

US stock markets are again at an interesting crossroad. I was assessing potential turning points for the market and recalled my Aug 16, 2007 post. De Javu! I don’t think my views are any more different from what I had then, except that I am much more bearish now than I was in Aug’07. The support points are almost equally valid. Bears, give some relief to bulls. But this time around, you are smart as you are clawing slowly, not as horrific as Aug 16’07, the day when panic selling rocketed IV to moon.

Yesterday was quite an interesting day. I had to see-off markets early and hence closed my puts early for modest gains….Ooops, do you smell greed? But it was great day as my portfolio was up couple of points despite the massive fall. I closed my higher strike positions to reduce my Delta exposure into a manageable one. I knew this was a dead cat bounce so rather take advantage of rally and sell into strength.

gld-break-out-jan-9-2008.png Gold is rising and rising smartly. Gold is marching to a new territory and there is no resistance. I am bullish and think it won’t stop till 940-950 are before any meaningful correction. Here is a nice breakout chart for GLD that should give you an idea of how does a “opportunity land” looks like.

Mosaic (MOS) is announcing earnings before market opens. For beginners, The Mosaic Company engages in the production and marketing of crop nutrient and animal feed products worldwide. It operates in four segments: Phosphates, Potash, Offshore, and Nitrogen. MOS has risen almost 5folds in past 52wks. Either they will be crushed or rise to new heights. I am interested in MOS’s outlook for finding weakness in other high fliers. Overall, we are in a typical bearish market when markets opens higher and close lower.

Earning season is kicking-off and next week is the option expiration week. Get ready for the action.

Have fun trading, profitable trading, OP

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