Alcon (ACL) trade

OK if you placed the trade today you better have recieved .70 to .80 for the spread. A much better % for this trade. I am not too concerned about the rise today. It is not based off any news and if we look at yesterdays bar it could be looked at as in the shape of a reverse lincolns hat which would indicate a rise the next day. Todays was in the shape of a Lincolns hat which would indicate a drop the next day.

If you did not get into the trade today you can easily wait a couple of days and see what the stock does. I still think it is a good trade as the stock will not break $110 unless some unexpected news comes about. However I would place the trade no later than the end of trading on Friday.

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The markets and a new trade in Alcon (ACL)

OK so the markets do not know what to do - still. However with the NASDAQ breaking above resistance of 2325 if it holds above this we may see a continued bull trend, if not then a sideways trend will continue. I feel right now the NASDAQ is leading the way and it will depend on what it does the next couple of days.

OK since the markets are of no help I am going to place a trade on an individual stock that has not been seemingly affected by the market movements.

Alcon (ACL) - Bear Call Spread -

ACL is a fundamentally average stock in its sector currently in a downtrend closing today at 103.15. The 30 dma appears to be a good resistance line and currently it is around 110. With MACD dropping and STOCH staying in the sold region, no news to speak of other than to announce they will report earnings after the close on Monday April 24 which is after Friday expiration I will place a Bear Call Spread - selling the 110 calls for .70 or better and buying the 115 calls for .20 or lower. This gives a spread of .50 or 11% gain in 23 days.

Chart from BigCharts

There are some other riskier plays we could try but with the markets not truly settled in their direction the risks are higher than usual.

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Bernanke and the FOMC

Bernanake has his first FOMC today and it is expected that he will raise intrest rates another .25, the question in the markets is what’s next?

The housing market is showing a sign of slowing but the rest of the economy is driving hard upwards and inflation is rearing its ugly head, so what will the new chairman do? Will he raise it in May or will he wait for June? It seems that the market experts think that 5% is the magic number but we all know how many times the experts are right - seldom!

So this meeting is important and the markets are waiting patiently…

DOW stuck between 11,200 and 11,350; NASDAQ hovering around 2300; and the S&P 500 is hanging just above 1300.

All of my positions are closed and I am awaiting the direction of the market. Possibly a trade for Wednesday depending on what is said over the next two days and how it affects the market.

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Sorry

I have to apologize. Life got in the way with some family matters including a death in the family. We are back on track and some exciting updates coming including an exact explanation on how I trade credit spreads. Stay tuned.

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