|
By Ian Wyatt, Daily Profit |
TLB | Nov 26, 2008 |
November 26, 2008
*****It Stuck
*****Good News…from Retail?
*****Newsletter Advisors
Dear Investor,
*****I can’t say I’m disappointed by yesterday’s trading. I think we can all agree that a relatively flat day after the last couple days of solid gains is just fine.
The stock market actually showed some strength yesterday, with the Dow Industrials fighting back from a + 100 point drop. That fits with my expectations that recent gains are ones we can hang onto, at least for a while. We’ve seen small declines snowball into big sell offs all too often lately. That stocks could bounce back from yesterday’s decline has to be viewed as a positive.
Also take note that yesterday’s mild declines came after some fairly bad economic news. GDP and U.S. home prices fell more than expected in the third quarter. Of course, investors might have differed over exact numbers, but nobody expected anything positive. Again we see signs that bad news is already reflected in stock prices.
*****Outright good news has been a bit elusive lately. In its place, investors are settling for not-as-bad-as-expected news. And we got some from a most unlikely sector – retail.
Talbot’s (NYSE:TLB) ad Chico’s (NYSE:CHS) were both expected to lose money in the third quarter as same-store sales declined 13%. But surprisingly, Talbot’s managed to not lose more than what was expected and Chico’s managed to not lose any at all!
Nice job fellas, drinks are on me!
Seriously though, that I even feel like joking about such things is a sign that there’s a feeling of stability in the markets that’s been absent for some time.
In light of the news from retail, and with Black Friday just ahead, I’m going to close out the “Mom cancels Christmas” trade. That means I’m selling the March 19 Retail SPDR puts, symbol XYROS, for approximately $400 per contract. Then I buy back the January 47.50 Wal-Mart puts, symbol WMTMW, for approximately $180 per contract. That closes the trade with a $220 profit per contract.
| Enjoy the article you just read? Sign up for 24/7 Investor's Daily Profit Newsletter and Receive Our Profitable Insights Direct to Your Inbox. |
|
Daily Profit is your leading resource for stock market insights, useful commentary and profitable stock recommendations. And it's totally free. Every day, Ian Wyatt will discuss what's moving stock prices... and how you can profit from those trends.
What our readers are saying:
"It is a pleasure to read something by a public writer who uses his head and not just his imagination to explain things in the world."
"CHEERS and thanks for the great advice, I think you are doing a great job in tough times."
"I find your letter very interesting and up to date. Best thing is that it comes hot and live."
Get your FREE subscription now. All we need is your email address.
|
|
 Comments on this article
There are no comments for this entry yet.
Add your comments
|
