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Comments below
> I'll have to wait until they get close to the
>bottom of the next longer term channels before I try again.
> I thought that with all three of them failing to hold, the market may
>be in for some more bad times. However, the NASD OTC, OEX, and SPX indices
>are all near the bottom of their Intermediate Term Up Trend Channels
>(ITUTCs). If those channels hold, we should see an upturn some time this
>week. If they don't this could turn into a major correction
Jim, I believe the PPI comes out on Thursday and the CPI on Friday. Since
fuel prices have gone up this could be the first PPI that shows some signs
of inflation. But the $2.27 question is how much inflation will the market
movers think will be bad for stocks. Some (PIMCO) are betting heavily that
inflation has begun to crawl in to the economy since they have been a major
seller of the 30 year bonds. So we could get some big fireworks this week
towards the end of the week when the PPI and CPI come out.
I too am long C but with the December call (CLP) at 5 /14. I picked it up on
Friday. I also have a spread on C with CLP and CUP for about two to three
weeks now. 68 and below the value of the spread makes me money. I think 83
and above the spread makes me money. I chose a delta neutral strategy. i.e.,
put and call had same deltas a purchase. Since the stock was near 68 and it
had broken through the bottom of the channel and the 30 year bond is
oversold (from a technical point) I figure it was worth going in on the long
side. However my price target is 73, but if the PPI doesn't show that bad of
inflation C will move much higher.
I am looking at C as a short term trading opportunity. My reasoning is that
if interest rates go up then banks get hurt. Watching C over the last few
days tells me that somebody is watching the yield on the 30 year very
closely. If the PPI and CPI numbers are pretty good the yield on the 30 year
should drop and C would move up quite nicly. If you notice on the Friday
bar. You will notice that C had a high of 71.38. That spike in price was
because the 30 year Bond dropped in the morning. When the 30 year started to
sell off again it dropped like a rock.
The other reason for entering is to protect those gains on the spread in
case C moves higher.
Just my two cents.
Harley
PS I think this is the only post that I have made that is not contrary to
your position. Scarry <G>.
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