Tuesday, August 11, 2009

Pullback May Bring Buying Opportunity

The markets are finally pulling back after rocketing ahead in July. How fall will we fall? Hard to say but there is definitely strong upside momentum going forward. More market analysis to come as I reacclimate myself to market conditions after taking a month-long break. I have been dabbling with Boeing lately. Still not sure whether it is a screaming buy or a laggard that will lead the Dow down to retest the March lows. As a result, I own both calls and puts. I added another long-term put. At 47+, Boeing was touching the upper channel line and adding the long-term put seemed like the smart thing to do. It's easy to see from the above chart the strong downside potential. The Jan 45 puts were acquired at 2.05.


When looking at the weekly chart, we see a different picture forming. The four week moving average comes in slightly above 44 and should it hold, it could provide the launching pad for a run up to 52 and beyond. But with today being only Tuesday, and with the Federal Reserve meeting taking place, anything can happen. I can't think of anyone who disrupts the markets more than Bernanke so hold on to your hat and be prepared for anything.

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