This in response to a guy going long the FAZ 25 calls. He posted it on Stocktwits.com My 2 cents with 200% vols do a verticle spread instead. At least less risk and similar reward.

Charts in High RS Sectors 03 22 2009

This will do the charts as a slide show

I found these charts most interesting for the weekend.

GS possible trade

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Negatives to the trade:

They have earnings right before expiration(Thursday). yikes!

Volatility is extremely high so the chances for smooth sailing are low.

Technical Indicators are deteriorating.

Positives to the trade:

The protection is out a ways, you have time. (puts are further out than the calls you are selling)

You can hedge with stock, buy more stock or sell exisiting position, or short stock depending on how bullish /bearish you are.

You can also continue to sell calls against the position, after expiration, because the insurance is in July.

Your yeild is rather high per month- your upside is limited or capped but you are using that to pay for your downside protection. It is a range bound trade.

Underlying Indicators for Economic Acitivity

Are we melting away? Dr. Copper says no. BUT be patient and follow the charts.

Crude is also confirming some signs of inflation. Gold is pulling back but it is above it's bullish support line. (little dots at bottom of the chart) All these charts are bullish. The Stock market is BEARISH and keeps confirming the downturn. These things are the canaries inthe coal mine that I see inflation could come back to our economy. Will they? Who knows but so far it is the first signs of light.

Jamie