The market sold off heavily again, yesterday. The selling took place on heavier than normal volume. Again, this volume surge is an indication of institutional selling.
Back on March 7th, I told you not to trust the rally attempt unless you saw signs of institutional participation. (See, Assessing a Market Rally.) A rally without these big players is doomed to failure. The buying that had been taking place was on rather anemic volume; and indication the big players were not behind it.
Most of the gains from that rally were lost yesterday.
On the bright side, our bear call spread is well positioned for a maximum return of over 13% on risk capital. If the S&P 500 remains below 1,460, we will likely double our current 11.75% year-to-date return.
I will try to update the blog again later today with some current market analysis.
Keep an eye on your risk!
Christopher Smith
TheOptionClub.com
Discover the stock options strategies favored by professional traders in our FREE options trading mini-course!
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Wednesday, March 14, 2007
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