After a couple of very volatile weeks that did not go anywhere do you think our luck is about to change? Now that the holidays are over will a directional bias emerge?
Fortunately we were not stopped out on any plays and we still have a pretty good list. I considered adding a couple more plays this weekend but I wanted to see how the futures opened up on Sunday night before making a decision.
After watching them dive about -6 points from the opening level I elected to sit on what we have already and not add any more risk to the portfolio. If you want to add something else I would suggest adding a couple more contracts of something that is already listed instead of adding additional risk in new stocks.
If the market rallies on Monday it should return us to resistance and I would be perfectly happy to just go dormant at resistance for a week while the huge list of economic reports play out. I seriously doubt I will get my wish.
It will be a coin toss on direction. The dollar is surging again Sunday night after the EU agreed to give Ireland $89 billion in loans. However, the Koreas are trading shots again. Fortunately it is verbal shots so far and not artillery.
Asian markets are mixed because of the tense situation in Korea and not about Ireland. South Korean citizens protested and demanded a strong show of force against the North and China has called for emergency talks to defuse the situation. That gives credibility to the North and angers the South. With the joint military exercises with the U.S. scheduled for three more days there is the potential for an altercation and I seriously doubt the U.S. forces are going to turn the other cheek.
With all these stories evolving hour by hour I would be surprised if the U.S. markets broke out of their recent range. However, as long as they stay in that range the premium will bleed.
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