Tuesday, September 9, 2008

09.09.08 - Lehman Weighs


Lehman is down something like 40 points, weighing on the markets. We are testing the five day ma's again; no indicator looks good at this time -- unless you are holding short. However, the NASDAQ 100 needs to be tracked carefully for a multi-day bounce set-up. Out of the money put selling may be one way to go on this for the risk averse (just make sure you are a "happy owner" at the selected strike). Making that a vertical spread (buying a put further down the chain) would reduce potential downside even further. [Edit: Or just buy a call and know your total risk.] Obviously some news to push this along wouldn't hurt. The Energy ETF (XLE) is down a whopping -3.8% (even off of its lows), causing me some pain.

9:50AM PST UPDATE:
Second bounce off of S1 looking interesting. Not sure it it will hold, or if these repeated tests will lead to a breakdown (I'd guess the former, but still waiting for more evidence).

11:30AM PST UPDATE:
Obvious where that went... look at oil, $103/BBL?!

12:05PM PST UPDATE:
This was a downtrend day from early on with many indications of follow through, but my goodness. Lots of dashed hopes today [edit: after the GSE action], no doubt.

12:55PM PST UPDATE:
Putting some [NDX] on for a [swing] trade at the close.

CLOSING UPDATE:
HEAVY LEHMAN RUMORS TONIGHT. THINK IN THE VEIN OF BSC, BUT LESS DESTRUCTIVE TO CORE BUSINESS.

Never Investment Advice

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