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Tue: Top Buys QQQQ MSFT OIH Top Sells SPY Others to Watch: SPX OEX

Primary Trades:

SPY Mar 128 to 130 puts, when SPX around 1,270 this week, for a potential steep market decline within a month.

Secondary Trades:

QQQQ closed at 40 1/2. The Feb Max Pain point remains at 42, although moving towards 41, with the value of calls about 50% greater than the value of puts. Feb 40 calls may be a buy on a pullback.

MSFT closed at 26.40. Its Feb Max Pain point is 27.50 with the value of calls about twice the value of puts. The Feb 25 calls closed at 1.40 (100% intrinsic value) and the Mar 25 calls are 1.55. MSFT is not often more volatile than QQQQ, although currently relatively undervalued.

OIH traded today between just below 140 and 144 1/4, and closed at 141 1/2.

SPX Feb Max Pain remains at 1,275 and OEX Feb Max Pain is still 575. There may be Feb options trading opportunities.

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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.