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MARKET DIRECTION CALLS
August 2 2011 - Selling Intensifies
August 1 2011 - Bear Returns
July 28 2011 - Before The Open
July 27 2011 - Down But Are We Out?
July 20 2011 - Stock Market Volatility
July 18 2011 - Investors' Nervousness
July 15 2011 - Earnings VS Bleak Data
July 14 2011 - Below 1310
July 13 2011 - Ugly Looking Chart
July 12 2011 - Razor's Edge
July 8 2011 - Nasdaq Leads The Way
July 5 2011 - Expected Weakness
July 1 2011 - Overbought
Jun 28 2011 - July Rally?
Jun 27 2011 - Mixed Signals 
Jun 21 2011 - Bottom Or Bounce?
Jun 16 2011 - Raising Cash
Jun 15 2011 - More Downside To Come?
Jun 14 2011 - Bounce or Bottom?
Jun 12 2011 - Batten Down The Hatches
Jun 6 2011 - Bounce Sometime Soon?
Jun 2 2011 - Sell Signals and Warnings Everywhere
Jun 1 2011 - How Bad Could The Selling Get
Jun 1 2011 - Tread Carefully - Markets Remains Overvalued
May 31 2011 - Success - 100 Day Moving Average Tested
May 17 2011 - Be Careful Out There
Apri 18 2011 - Two Bears Compared
Apr 13 2011 - Why I Bought Puts Today
Apr 4 2011 - Breaking The February Highs
Mar 16 2011 - The Art Of Being Wrong
Mar 15 2011 - Market Remains Resilient
Mar 11 2011 - Trend Is Down
Feb 25 2011 - Trend Turning Bearish
Feb 11 2011 - Still Up - But Watch For June
Jan 3 2011 - Trend Remains Positive
 

MARKET DIRECTION CALL S&P 500

July 5 2011 - Some Weakness As Expected

The market remains overbought and if you recall from my July 1 market direction call I indicated the market can remain overbought longer than many investors think. Today's action is expected after such a run up. I would expect more weakness ahead. Volume was very poor and the ultimate oscillator is still flashing overbought. A pull back could take the S&P down to perhaps 1310. I'm not great at picking points of pullbacks, but I doubt any pullback will get much below 1300 which is just below the 50 day moving average. I look at it as an opportunity to sell more puts.

S&P500 for July 5 2011

Part of the problem today was the XLF turning down along with the downgrade of Portugal sovereign debt and rumblings about European Bank debt being downgraded. The European crisis is far from over and be prepared that anytime anything of anxiety out of Europe arises, the market will probably stall. However I believe any pullback is just another opportunity for my naked puts.

SUMMARY

II am putting more capital back to work and buying back my sold puts as they earn profit and then selling more. Today for example I bought and closed my July Nucor $38 puts and sold into August at the $37 strike. This works right into my Cautious Bull Strategy which I discussed back in January.

 

 

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