Today's rally was purely short covering on low volume and it did not have any conviction.

The morning short squeeze ended at 11:30 and the markets faded into the close. There was no volume and no conviction and I am afraid we are going to visit support again before the end of the week.

They blamed the rally on the miniscule drop in crude prices but it was more of a short squeeze prompted by the strong outlook from Bank of America. That spiked the Dow and the financial sector and got the rally off to a decent start. With all the bears loading up on Monday's decline any minor spike was enough to squeeze the shorts.

The drop in crude prices overnight was enough to knock NOV to our stop loss at the open to take us out of that position. Of course it rebounded to close flat for the day when oil prices rebounded.

I am not adding any more positions because of the volatility and lack of market direction.

Jim Brown

Current Portfolio

Current Position Changes


New Recommendations


New Long Term Recommendations

None - waiting for a directional trend

New Aggressive Recommendations

None - waiting for a directional trend

Prices Quoted in Newsletter

At Option Investor we have a long-standing policy prohibiting the editors and staff from actually trading the individual recommendations in order to conform to SEC rules concerning trades.

The prices quoted in the newsletter are the end of day prices in most cases.

When discussing fills or stops the prices quoted are the bid/ask at the time the entry trigger or exit stop is hit. This is NOT a price that someone on staff actually got using a live order.

For entry/exit points at the market open the prices quoted will be the opening print. The majority of the time the readers are able to get a better fill than the opening print because of market maker bias at the open.

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All of these rules normally produce worse prices than an active trader would normally get. Because they are standardized there may be some cases where a price quoted was better than an actual fill. If you received a price that was dramatically different than what was quoted please let us know.