Two things continued to push the market lower, and were "triggers" to a downside move to 12,302, before a rebound to 12,442.
1. Bernanke expressed concerns about the USD. This alone should make you smile. Finally, the concerns become evident.
2. Lehmann Brothers showed their financial fraud of numbers, and hit the skids. For traders with our Blue Chip Option service, we owned puts on Lehmann, bought at 7.00 10 days ago, and sold to 13.35 in trading on Tuesday.
Many traders are worried as we have an open call that has lost value. This is the concern I had over the past two months as I've had a success ratio beyond normal, and that traders would begin to think that trading options was easy.
With this said, we believe the market has tipped to the bottom too far, and will rebound, and although we missed puts in yesterday's trading, we were profitable many times in a row, and still could be with the open call signal we have. All is not as it appears.
We will not recommend a put for opening today, as the market "count" is now 7 to the put, far too extreme for anything but a risk play.
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