Options Trader: Thursday Morning Ideas

by: Philip Davis

We could go anywhere today!

Personal income is up .4%, personal spending is up .2% -- but people aren't spending it at Wal-Mart, who gave us some pretty lame numbers along with several other big retailers.

Very tight stops on calls today as any indication of consumer weakness can really spook the markets.

Asia had another great day with both the Nikkei and the Hang Seng adding on a point. India's GDP came in at 9.2%, well over expectations of 8.9% -- this is another billion person economy that is kicking our butts!

Also kicking our economic booty is our old owner -- England! It now costs you almost $2 to buy a British pound (England still uses their own currency extensively), which is up from $1.40 on my last trip just 2 years ago!

Another reason Europe is flying is that it looks unlikely that Turkey will join the EU and drag them down in the near future. Much like the integration of East Germany was very painful, Turkey just does not have their economic house in good enough order to join the team.

Let's check our levels very carefully:

  • Dow MUST hold 12,200 and needs 12,300 to be taken seriously
  • Transports can NOT go below 2,650
  • S&P MUST break and hold 1,400
  • NYSE MUST hold 8,900 but needs 9,000 to impress
  • Nasdaq needs to get back over 2,450 fast!
  • SOX MUST retake 480 and 490 is no big deal

US Markets 30 11 06

Oil is going to test $63 at the open and yesterday's move was independent of the dollar so we should be very, very afraid if it goes up from here ($62.50). This contract was at $63.09 back on 11/10, when we were still looking at the December contract, and it fell back $6 from that peak a week later, so that's the new high they will be looking to break.

Gold will test $650 today if our markets look weak, and Newmont Mining Corp. (NYSE:NEM) is always a good way to play this with the $47.50s just .45 but don't be greedy!

If the dollar goes below 83, we are in BIG TROUBLE so I really have no desire to do anything other than manage my existing positions and wind down my month, something I'm sure many fund managers will be doing today as well!

US Markets 30 11 06


It's time to put our money in foreign banks before ours start to fail! Mitsubishi UFJ Financial Group Inc. (NYSE:MTU) is my favorite and has been beaten down of late and I like the Jan '08 $10s for $2.80 as a very low premium play or you can just buy the stock for $12.49 and save the 30 cents!

Let's be real careful out there today -- any downturn could gather momentum very quickly as foreign traders need little excuse to start dumping our markets.

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