Tuesday, February 21, 2006

Placid

Welcome to March expiration cycle.

The NDX-100 is down 17 as of this writing but the market overall feels somehow stronger. Semiconductors getting pushed lower must be skewing the action. Overall, nothing to write home about.

This weekend I pored over several hundred charts and came to two conclusions:
  1. The Housing sector looks terrible. This is on a monthly timeframe and even though we are not ready to short sell the equities right here right now, we will look for rallies to get short. Also, selling calls into these rallies will be another recommended strategy.
  2. The Oil spot looks pretty bad as well. It has bounced from its lows of 58 or so but I see a lot more downside. Some Oil sector names need to be sold here and we are offering call premium in APC, CVX and other issues. Just like in Housing, we are not ready to get short outright, but the time will come.
I know my view on Oil is really counter-intuitive but I call them as I see them. And no, I don't care what WSJ or CNBC has to say about the situation with production, supply, operational overheads, margins, etc.

With the market not offering much activity, here is a really interesting read posted this weekend on TheStreet.com:
An excellent article for all market technicians out there.

Cheers,
/Dmitry

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