Monday, October 01, 2007

First day of month pops

The first trading day of the new month opened with a roar and the buying was aggressive and across the board. While I am skeptical of Citicorp's enthusiatic endorsement of the housing stocks as "value" plays and suspect the financial whirlwinds are not completely played out yet, there were some excellent buy candidates today, mainly on the fringes of the tech sector.
The Q's performance contributed to the party and I took the results of my weekend research posts to load up on a number of issues early on, rode them up and then sold ATM near term calls to protect the positions. Keeping in mind my risk adverse nature and the implication from the Qs weekly study (posted Sunday) that the Qs will pullback prior to expiration October 19th, I hedged my new Q buys by selling near 52 calls, which I may buy back back if the Qs fade in the near term.
The VIX basically went nowhere today, which is an interesting development in itself. The VIX almost made it back to the 10 DSMA . . a situation that may be resolved as early as tomorrow since the MACD histogram is at the zero line and the MA component is turning up.

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