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Cat Tierney
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  • Bears Push Support As VIX Spikes 0 comments
    Jan 23, 2014 1:48 PM

    Bears Push Support As VIX Spikes

    12:35pm (EST)

    If we closed our eyes and had to guess where the market was trading based on futures this morning, we would say Dow 16,200; S&P 1,825; Nasdaq 4,200.

    As we open head into the second half of trading the Dow is down 177 points to 16,195 while the S&P 500 is lower by 18 points to 1,829. The Nasdaq is declining 40 points to 4,203 and the Russell 2000 is at 1,170 - down 11. The S&P 500 Volatility index ($VIX, 13.88, up 1.04) is spiking 8% and has touched 14.15.

    You can't call it much better than that, folks.

    Today's close will be super important as it will be up to the bulls to hold the bottom of the current 5-week trading range. If not, a new TREND could be developing but we have been down this road before.

    The support and resistance levels we have been preaching about have been great clues on if we should stay long or start to look at put options (downside or short ideas). It has been a long time since we have "loaded" up on put positions and while we are prepared to play a nasty pullback, let's take a wait-and-see attitude before dabbling on the dark side.

    While we aren't thrilled with today's slide, we do have another triple-digit winner as our call options on ARUN returned a 103% profit despite today's dip.

    We also have an exciting story developing with another one of our trades on a stock that is just above $7 that could get a buyout offer north of $20. Seriously.

    We have already made 56% on an earlier call option trade this year on the stock's move from $5 to $7 and our chart work has predicted a run to the high teens could be coming. The buyout talks are an added bonus as a bidding was could erupt over the company with other bidders entering the game.

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