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Dear Friend,
I have submitted an article to Seeking Alpha that I would like to share with you.
Terry
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| Option Tip of the Week |
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An Options Strategy for Apple Bulls to Protect Against a $50 Drop in the Stock Price
Here’s the link – Apple Option Strategy
There seems to be a lot of interest in Apple (AAPL) these days. While many investors are bullish on the long-run prospects for the company, many are concerned that in the short run they may have to endure a good-size drop in the stock price.
A properly-devised options strategy can protect you against a $50 drop in the price while leaving you plenty of room to prosper if the stock continues to rise over time.
Any questions? I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts.
You can see every trade made in 8 actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here. Why wait any longer to make this important investment in yourself?
I look forward to having you on board, and to prospering with you.
Terry
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| Andy's Market Report |
It was another week of “spinning the wheels” for the market.
The Dow, S&P 500, Nasdaq and Russell advanced 1.3%, 1.4%, 0.6% and 0.6%, respectively.
The always highly anticipated nonfarm payrolls report left much to be desired. The release stated an increase of 114K versus the consensus of 118K. The unemployment rate ticked down to 7.8%, but don’t get too excited, that’s mostly because a large wave of unemployed citizens left the job pool.
No market participants must brace for the upcoming earnings season. Expectations are not good. In fact, S&P 500 earnings for the third quarter are forecast to have fallen 2.4% from the year-ago period, which would be the first decline in three years
"It's a bit 'sell-on-the-news' type of a situation. We had the big jobs numbers this morning, but traders and investors don't want to keep their positions going into the weekend and next week," said Chris Bertelsen, chief investment officer of Global Financial Private Capital, a Sarasota, Florida-based wealth manager with $1.5 billion in assets under management.
We should know more very soon as Alcoa kicks off the earnings season early next week. Will we see the anticipated correction? If so, how deep will the correction be for the market? While no one knows for certain I would have to say that the odds are with the bears at the moment.
The S&P 500 is still up 16.2% so far this year. The benchmark is on track for its best yearly advance since 2009 when stocks rebounded after the financial crisis.
Technical Mumbo Jumbo
The S&P 500 has officially pushed into a short-term overbought state. But more importantly, the major market index is right back at what has been an area of strong overhead resistance.
Couple the aforementioned with weak seasonality ahead and I think there is potential for a slight correction over the coming weeks.
The price action on Friday could be a precursor of what is to come. Shortly after the unemployment numbers were released futures pushed significantly higher which led to the market opening higher at the opening bell. But, the rally was short-lived. The market began to sell-off at the open and never looked back.
Typically, when we see this type of reversal after a jobs report the trend continues into the following week.
Given all of the short-term bearish tendencies I have mentioned I think the stars could finally be aligning for the bears. The bulls have experienced one hell of a run over the past few months, so a correction should not be a surprise to any of us. |
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| Overbought/Sold Condition Report |
Overbought/Oversold as of October 6, 2012
• S&P 500 (SPY) – 77.8 (overbought)
• Dow Jones (DIA) – 74.5 (overbought)
• Russell 2000 (IWM) – 62.3 (neutral)
• NASDAQ 100 (QQQQ) – 58.1 (neutral)
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| Testimonial of the Week |
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“I've got a unit of the shoot portfolio. I'm very happy with the way it has performed, and I have set up a couple of my own using that model and those are also doing decently. Have you thought about adding more Shoot stocks? This is a winning strategy you should really be proud of and I would welcome the chance to participate in additional positions.” – Eugene
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Thank you again for being a part of the Terry's Tips newsletter. If you are interested in signing up as an Insider, visit Terry's Tips today for details.
Sincerely,
Dr. Terry Allen
Terry's Tips
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