November 15, 2010 Weekly Newsletter

Good Afternoon Traders,

As always, our challenge is what happens in the coming week heading toward the holidays as all levels have changed for each index. Option4Options trusts that you are prepared for what the market brings us this week as our economy seems to surprise us when we least expect it.  Our weekly newsletter is meant to help educate you, inform you and give you option insight.

Today's Newsletter will discuss the following:
 

Market Outlook, Briefly Speaking!

“The High Overemployment Rate”

“Bull Market or Bear Market Money Management for Online Investing with Options”

Make sure you understand the financials

Market Outlook, Briefly Speaking!

Stocks experienced a series of bad news last week and that caused an end to our five-week winning streaks of the S&P and Nasdaq. The S&P lost 2.17 percent, the Dow lost 2.20 percent and the Nasdaq dropped 2.36 percent.  We haven’t seen losses for the indices like these since the end of August.

Whether we had a normal correction or the start of something more serious is yet to be seen.  Each index broke support last week, with the Nasdaq 100 bearing the worst damage. Cisco's warning last week helped spur some serious profit taking, at the least.

With plenty of concern in the air, Friday's market reaction shows the effects of many catalysts on a macro and micro level. Tech earnings, Europe, and China tightening its monetary policy have far reaching effects.

Earnings news continues to lessen and only a few S&P 500 companies are left to report. Green Mountain Coffee, Nordstrom and Abercrombie & Fitch release their results today, and tomorrow we will hear from Home Depot, Jacobs Engineering, TJX, and Wal-Mart.

Note if you have an investment in Green Mountain Coffee that earnings were supposed to be reported on Friday, November 12, after market hours.  This was quietly changed to November 15 which seems quite odd.  Additionally, the team at SmartConsensus has downgraded GMCR to Hold from Buy today and the technical research team at Market Edge has downgraded GMCR from Long to Neutral on Saturday.

“The High Overemployment Rate”
8:35 AM Monday November 15, 2010
by Sarah Green

In this tough economy, perhaps no single economic metric has gotten as much attention as the unemployment rate, stubbornly stuck near 9.6%. As Harvard Business School Dean Nitin Nohria, writing in the November issue of HBR, observes, "In the United States, for example, the corporate sector — judging from most companies' earnings reports — is doing well, yet people are struggling to find work." This mismatch has given rise to a debate among economists over whether the persistently high unemployment rate is structural (as opposed to cyclical).

For more information on this article go to:

http://blogs.hbr.org/hbr/hbreditors/2010/11/the_high_overemployment_rate.html

“Bull Market or Bear Market Money Management for Online Investing with Options”

Wealth managing for online investing is no easy act in today’s stock market investing.  One day there is Bull Market trading and the next day there is Bear Market trading.  Many investors consider that accurate money management is the most important and most overlooked consideration to their online investing success .  Options traders should have a firm grasp of the statistical probabilities involved in the principles of money management if they intend to improve their wealth in the future.

For more information on this article go to:

http://www.salesmanagementarticleblog.com/bull-market-or-bear-market-money-management-for-online-investing-with-options/

Make sure you understand the financials
 
There are four main financial statements. They are: (1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of shareholders’ equity. Balance sheets show what a company owns and what it owes at a fixed point in time. Income statements show how much money a company made and spent over a period of time. Cash flow statements show the exchange of money between a company and the outside world also over a period of time. The fourth financial statement, called a “statement of shareholders’ equity,” shows changes in the interests of the company’s shareholders over time.

For more information on this subject go to:

http://www.sec.gov/investor/pubs/begfinstmtguide.htm

If you have a story you would like to share then please share it by emailing us at:

newsletter@option4options.com

We hope our market outlook, education materials and suggestions will be helpful for your trading success.  Please visit our website to view other information and strategies that may interest you at:

 www.option4options.com

Last week does not make a trend, but we recommend caution with your trading.  The overbought/oversold indicators in the market need to come down a little. We remain cautious because of the selling pressure we saw last week leading into the holiday season. Hopefully, this will set the market up to rally again soon.

Good Luck with your Trading!

Option4Options, LLC