Weekly Recap

Slow week for me. My portfolio took a nap while I waited for the smoke to clear. The market rebounded strong on Friday on good volume, reaffirming a trend that Option Expiration weeks are typically positive.

We are now in that upper end of the defined trading range, closely watching for the S&P to breach 1490 and the Nasdaq composite to breach 2700 again. Unfortunately, they may end up moving above these numbers next week on thin trading, thereby not giving us the possibility of a technical confirmation that the uptrend will continue.

Oh well, up is up. I sound like a complainer when the market has held up really well against an onslaught on negativism from the media. I have been fairly negative since the Fed Communications disaster. Not because I am worried about a recession (unlike others), but I am worried that the Central Bank can't seem to effectively communicate with or understand what the market is telling them.

This negative stance caused me to cash almost all my calls last week, and this Tuesday, I basically went to cash. I kept only three stocks - PCP, ROCM, and SIRO. I did this because the market was continuing to sell any news and I didn't want to be the "last one out".

The first stock that I kept, PCP, is because I just went long term (capital gains) with PCP and I wanted to try to take my profits (a double) into next year to avoid the tax man a little longer.

The second and thrid stocks (ROCM and SIRO) are in good defensive sectors (medical devices and dental).

Well, my "official" cash position only lasted one day. By Wednesday afternoon, I was nibbling at some AAPL calls again. The market finally showed some bottoming signals and the volatility indexes were losing ground even when the equities market was still red which suggested to me that Thursday would set up for a positive tape.

The tape on Thursday confirmed my trading suspicions (Oracle's blow had numbers also had a lot to do with it) and I added some PCP calls. On Friday, I just rode the Santa Rally wave with those calls.

I couldn't really follow the market closely on Thurday and Friday because I was traveling, so I just kept a lot of cash on the sidelines waiting to add as the market clears the current trading range. Friday's volume and positive price action was very encouraging and should continue to bode well for next week.