Stocks held their ground and the rotation from energy and materials into financials continued in what my morning post called the Bear Stearns bottom redux. But can it last. Da da duh...
With the toxic mortgage and credit crisis seeming to pass through the storm, the option gauges showed a good decline in risk aversion, as the VIX declined 8% to 21.75, its lowest level in four weeks, and the put call/ratio remained under 0.90 for the entire day. That is well below the spike to 1.55 experienced last week.
They say you don't fight the trend, and right now we certainly have several in place; energy down and financials up. But the wild card seems to be technology stocks. Specifically, the handheld sector and their chip suppliers are suffering badly.
I think Research in Motion (RIMM - commentary - Cramer's Take) near $110 a share will prove to be a good buy, and I'm looking at some November calls to establish a bullish position.
Steven Smith Blog Tale of Two Tapes 7/22/2008 9:05 AM EDT Energy and infastructure continue upward, while everything else continues to slide.
Steven Smith Blog A Day of Rest 7/21/2008 4:48 PM EDT After an extraordinarily news-driven close to last week, today was quiet.
Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.To read more of Steve Smith's options ideas take a free trial to TheStreet.com Options Alerts.
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