Wednesday, November 8th, 2006
After trading significantly higher in the overnight session and throughout much of the trading day, U.S. equities rallied in afternoon trade. According to sources, Wall Street became more comfortable with the idea of the Democratic control in Congress. In case you were unaware, this was the first time in 12 years that the Democratic Party has had control over the House of Representatives.
As mentioned before, investors hoping that the shift in power will successfully slow down "business as usual" in Washington. The theory is that with lawmakers unable to make progress, business interests should be somewhat protected in the near term.
A so-called "surprise" resignation of Defense Secretary Donald H. Rumsfeld failed to invoke the interest of the market.
Many analysts believe that the market will quickly return to its focus on the Fed and interest rates. While we are due for a correction, there seems to be evidence that stocks will benefit from monetary policy and interest rates throughout 2007.
Dow Recommendations...
Swing Trade - Flat.
Position Traders - Flat
Option Traders -
11/1 Iron Butterflies!! We were buying the December 120 put, selling 2 118 puts and bought a 116 put. Fills were coming in from $300 to $400 before transaction costs. This trade has a max payout of $2000, which occurs if the market is at 118 at expiration. The risk is limited to what is paid for the spread, period.
11/1 Today we bought a December 120 put, sold a 117 put and a 122 call for a credit of $50 before transaction costs. In other words, the market paid us to take the trade. This trade has a max profit of $3000 if the Dow is trading below 117 at expiration. The risk is unlimited above 122, be careful with the naked leg!
NASDAQ Recommendations...
Swing Trade - Buy 1 market on open, place a stop at 1729.
"You try to be greedy when others are fearful, and fearful when others are greedy" - Warren Buffet
There is a substantial risk of loss in trading futures and options.
The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
After trading significantly higher in the overnight session and throughout much of the trading day, U.S. equities rallied in afternoon trade. According to sources, Wall Street became more comfortable with the idea of the Democratic control in Congress. In case you were unaware, this was the first time in 12 years that the Democratic Party has had control over the House of Representatives.
As mentioned before, investors hoping that the shift in power will successfully slow down "business as usual" in Washington. The theory is that with lawmakers unable to make progress, business interests should be somewhat protected in the near term.
A so-called "surprise" resignation of Defense Secretary Donald H. Rumsfeld failed to invoke the interest of the market.
Many analysts believe that the market will quickly return to its focus on the Fed and interest rates. While we are due for a correction, there seems to be evidence that stocks will benefit from monetary policy and interest rates throughout 2007.
Dow Recommendations...
Swing Trade - Flat.
Position Traders - Flat
Option Traders -
11/1 Iron Butterflies!! We were buying the December 120 put, selling 2 118 puts and bought a 116 put. Fills were coming in from $300 to $400 before transaction costs. This trade has a max payout of $2000, which occurs if the market is at 118 at expiration. The risk is limited to what is paid for the spread, period.
11/1 Today we bought a December 120 put, sold a 117 put and a 122 call for a credit of $50 before transaction costs. In other words, the market paid us to take the trade. This trade has a max profit of $3000 if the Dow is trading below 117 at expiration. The risk is unlimited above 122, be careful with the naked leg!
NASDAQ Recommendations...
Swing Trade - Buy 1 market on open, place a stop at 1729.
"You try to be greedy when others are fearful, and fearful when others are greedy" - Warren Buffet
There is a substantial risk of loss in trading futures and options.
The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
