Sunday, July 16, 2006

July Options Expiration Week

The stock market fell again on Friday putting the three day drop in the Dow at nearly 400 points.  Meanwhile the other indexes we follow have fallen also.  Our main index is the NASDAQ 100, NDX, where we have substantial positions in the Rydex inverse funds based on this index.  The index has been leading the charge lower since January and we may finally be seeing the other indexes come in line with the NDX.  

We are cognizant of the potential bounce the NDX may exhibit here.  This week is options expiration week and with it there may tend to be a bit of volatility.  During the week we also have several fun numbers coming out like the PPI and CPI on Tuesday and Wednesday, respectively, and the June housing starts on Wednesday as well.  

If you have taken some time to look over the Elliott wave website, you have seen some very good analysis including analysis on the NDX.  They show a very important chart that has the NDX pretty much completing a five wave decline, which is normally followed by a three wave counter trend rise.  We are considering exiting our position in the Rydex funds this week and waiting until the rally plays out and get back into these positions going into the early part of August.  We will let you know.  Our position has been in place for a while now and we have a very nice profit in the RYVNX.

If you haven’t looked over that website, you should and take advantage of the wealth of Free info available until Wednesday afternoon.

[Editor’s note:  Out of necessity, we just post a quick note this evening as we have been out of town and weren’t able to return to do a full posting.  We apologize for the lack of info this evening but we will be back tomorrow for a full report.]

Dow Industrials:  10,739.35  -106.94
RYVNX:   24.98
RYAIX:  25.78
TLT:  85.04
BEGBX:  13.40

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