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TEN Exclusive: Options Update – 5/30/10

 Finally the month of May has come to an end.  There really isn’t too many good things to say about May as we witnessed an unprecedented flash crash, still to be explained, and several rallies and sell-offs in excess of 250-points.  The Dow did give up over 1000 points in May but it did manage to hold on to the 10,000 level.  One thing that we find encouraging is that the February lows held during the recent sell-offs and that could be evidence that we have seen the lows for the short-term. The chart looks like a nice double-bottom from which we may soon see a relief rally.

In the end, the S&P 500 Index (SPX) dropped 8.2%, to mark the worst monthly return since the 11% drop in February 2009. It was also the worst May for the Dow since 1940.

We remain slightly bearish but we wouldn’t be surprised if we saw a market rally later this week.  Don’t fight the trend.  The market seems to be able to sell-off much more easily than it can rally at this stage, so as investors we must be quick and agile. That’s the beauty of options, they allow you to play both directions with quickness and not much capital outlay.

Options 5.30

Weekly Economic Calendar:

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