EOT Position Update – July 2, 2008

| July 2, 2008

July 2, 2008

Market Snapshot

The Dow Jones Industrial Average just closed at 11,214.  We’re down another 600 points from this same time last week.  I sound like a broken record.   This is the fourth week in a row that the Dow has posted a loss.

Making the news this week, OIL.

Oil gave the market a big one-two punch.  After crossing $140 a barrel it confirmed the move higher, spiking to $144.  The ripple effect continues.  More layoffs at the airlines.  And poor car sales crushed the automotive industry.

GM also hit 53 year lows.  Their market cap is now barely over $6 billion.  The big question in my mind . . . how long till they declare bankruptcy?

The US Dollar traded down over the last five days as well.  The entire world is waiting for the European Central Bank to raise rates and push the dollar still lower.

Economic news isn’t much better.  Private sector jobs fell by 79,000 in June.  This exceeded most forecasts.  Inflation continues to be a concern.  Corn and soybeans hit new highs a few days ago.

Now for the trade updates.

Position Updates

  ROST November 2008 $42.50 Calls (REQKT)
Ross is the newest trade to the portfolio.  The stock has managed to hold it’s ground over the last week despite a rough market environment.  Everyone should have had the opportunity to take a position.  Resistance is 40 and 45.  Support levels are 34 and 31.50.

  ICO September 2008 $12.50 Calls (ICOIV)
ICO and the rest of the coal industry were hit with a big sell-off today.  I’d chalk it up to profit taking from some of the big institutions.  Resistance is at 13 and 15.  Support levels are 9 and 7.50.

  AHGP October 2008 $30 Calls (AQPJF)
AHGP was close to being in-the-money before today’s sell-off.  I’d give this trade more time to develop.  Resistance is 32.25, and 35.  Support levels are 26 and 25.

Parting Shots…

Differences between brokers.

Frequently we’re asked by subscribers about what broker to use.  Often times a subscriber already has and account open and they’re wondering if they should change. Others are new to trading and have yet to open an account.

As a policy, we don’t recommend one broker over another.

The biggest reason is your needs.  See, every trader’s different.  And every brokerage firm operates a little differently.  Trying to match every subscriber with the right broker would be a herculean task.

Often times choosing a broker comes down to simple things like:

Web site ease of use
Availability of customer service
Cost of trades
Minimum account sizes
And even minimum trade sizes

The important thing is to find a broker you’re comfortable with.  Take time to learn how their systems work, and don’t be afraid to ask them questions . . . that’s why they’re there.

We’ve accumulated a list of the larger and better known brokers who trade options. You can find this information in our free report Options 101: How and why to Use Optionson page 15.

You can find a more comprehensive list of options brokers at the CBOE website.  Broker rankings are sometimes available from various reputable sources including Barron’s and Smart Money.

Contact several different brokerage firms to find one that best meets your needs.

Category: EOT Update

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