PeakTrader.com

[administrator]

Tue: Buys OEX Sells MDY IWM OIH CME GOOG

Primary Trades:

MDY (mid-cap ETF) is near an all-time high, which it reached about two weeks ago, and IWM (small cap ETF) rose to an all-time high today. Both may continue to rise short-term (IWM's MACD indicator is still bullish), although upside may be limited (e.g. both topping when SPX at 1,275). However, the intermediate-term indicators show the market will be much lower within two months. So, MDY and IWM should fall sharply. Perhaps, longer-term puts or Feb in-the-money puts are best.

OIH may move opposite MDY and IWM for a while, and then all three may fall sharply.

Secondary Trades:

OEX Feb 570 calls may be used to hedge puts and in case SPX rises to the mid-1,270s.

CME rose 24 points today when it announced plans to create an energy market. CME reports earnings next Tue.

GOOG has risen 45 points in two days and reports earnings next Tue.

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Primary Trade: An intermediate or long term trade. Timing can be off substantially. Volatility not a factor. Risk is low to moderate. Potential return is often moderate.

Secondary Trade: A short term trade. Timing must be accurate or volatility must be high. Risk is high. Potential return is high.

Secondary Trades should be generally avoided, although considered. Note: If Secondary Trades are taken, they may affect Primary Trades.