In my last posting in this blog, I mentioned that the market is grossly oversold and need a rest (and have a short rally). Well, it did have a rally on Friday. The excuse the market is giving now is that the U.S. President Elect is nominating his Treasury Secretary who is rather acceptable by the market. He is also expected to name his Economic Team on Monday.
Since this week will be a short week due to Thanksgiving holidays, it is likely that the market will remain positive over the week.
Next week will be a crucial week for the retailers. Typically, consumers start buying for Christmas, the day after Thanksgiving. As such, the weekend sales data would provide a leading indicator whether retailers would be having good sales till the end of the year. At the moment, I think the profit would be bad (even if sales are good the profit margins would be grossly eroded.). The market would need an excuse to continue its downtrend. The retail Thanksgiving data could provide that excuse.
Position Updates:
- I closed all my short positions during the first half of the Friday's session with profits ;).
- My AIG Nov 2.5 Put will be assigned as it is in-the-money. My previous AIG shares which was also assigned the previous month had been sold sometime back with small profits.
- I also sold Citigroup (C) Dec 2.5 Put for an average price of $0.71. It means that if Citigroup remains above $2.5 on expiry Friday, I will get to keep the $0.71. If C is below $2.5 on expiry Friday, I will get assigned and the cost of the shares that I pay for would be $1.79. Citigroup is a bank that is "too big to fail". So it is likely that the government will do something that would help them survive This strategy is similar to the one I played for AIG - refer to: http://persiancat04.blogspot.com/2008/10/how-to-play-aig.html). (Latest update today, the Feds will be backing up Citigroup for a stake in the bank).
PersianCat (Millionaire-in-progress)
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