Options and Stock Market Technical Chart Analysis for May 8, 2009 by Idan Koren

Hey guys,

I have been away from my desk for about 4-5 days, but my views that this market has been extended have not changed. 935-940 presents very strong resistance, and if we even get up to that level, you should be shorting, and putting a stop up around 945 or so. In the last 2 days we have seen some bearish signs: Nasdaq is underperforming the markets significantly, and we have opened in an up gap and fell down right at the open. These are classic signs for a potential change in sentiment. I touch on my some of my longer term positoins, and where I think this market is headed in general. I believe tha an inverse head and shoulders will be forming on the S&P but that means that a pull back of 10-15 to even 20% is possible to compelete this formation. It is okay to go short, if you have a tight stop, but until we break the ascending channel support that we have been trading in, there's no reason to own SPY puts, because you might end up losing time value. Wait for the break, and then buy your puts, or wait for the 935 level and then buy them, with a stop. I also look quickly at GS and XLF.

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[unworldlything]

what's your opinion on FAZ?

[dwalden74]

Nice man - glad yur back!