Closed out the AIG January 40 2011 Calls Today

Today I closed out the AIG January 40 2011 Calls for a 66% return.  I do not like the shooting star in AIG right now and hammer reversal, not to mention the total collapse of the BKX Banking Index.  Definitely do not want to be a pig at this juncture.

Plus I have to admit I am a bit shocked at the magnitude of the breakdown in the BKX banking index.   I really thought this index had a shot at an upside breakout based on the pattern and volume of the XLF.  The XLF also is breaking below its near term uptrend line since September.

If the BKX and the XLF continues to break down, one has to ask the question how much longer the sp500 can keep chugging higher.  I need to investigate possible periods of market history where the sp500 made new 52 week highs while leaving the banking index flat or in a down trend.  Maybe that can occur but I need to see if there is a historical precedent.

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One comment on “Closed out the AIG January 40 2011 Calls Today
  1. Geoff says:

    Since the debacle of 2008/2009, i think i understand that the financial sector has gone from comprising about 24% of the S& P to about 16%. that may influence how important that sector is to continued DOW advancing.

    the 10 moving average of AD is getting very very extended. Yesterday it was on day #29 of positive days and the 10 ma stood at 501. the longest string i have seen is 33 positive days of the ma. it would take some thumping negative days to get this ma to turn negative, if only for one day!

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