March Madness

18Mar07

The markets are outperforming the NCAA tourney this year as far as wild action.  All the #1 teams remain contenders and looking great, and there have been only 2 major upsets… btw, I don’t consider the Duke loss an upset, VCU was the better team!

As far as the markets, there’s a lot more of the madness!  We continue to see wild action with investors uncertain over where the markets are going.  During times like these, it’s best to stay cash heavy or to take quicker trades until a clear trend forms.  Although markets may seem to be in chaos, I still think it’s a good time to find longer term investments as overall stocks are historically cheap while rates remain low.  As far as options, it’s a great time with volatility finally in the mid teens.

Trading this week was another profitable one.  After a “suckers” rally up to SPX 1410, we had a nice drop of 46 points, 3.3%, to 1364.  By Thursday we managed to bounce, but closed Friday on a weaker note at 1386.  This week I was a bit early with my March puts, but managed to suck it up before making decent gains by closing them on Wednesdays drop.  Our 30k account now sits at a comfortable 100k.  I’m starting to think with a long bias, but I’ll cautiously trade calls on dips and look to enter stocks with strong buy backs and high growth potential.  Just an example, I started to dabble with KLAC April calls for now.

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