Well Put

Good day on the market today, bears. This time, after a look at a couple of indexes, I'm going to show just stocks on which I think puts might be a lucrative position. They have a number of properties in common - - the stocks are high priced (meaning the options can get really juicy). They have options with decent volume. And they seem to be running out of steam.

The stock market finally - FINALLY! - made its mind up on direction today, and it was down. As you can clearly see from the horizontal line of support, the moment it pushed through, it was party time.


Looking at the past several months, you can very clearly see that early in this bull phase the price action and RSI were lined up (green lines) and yet, for a couple of months or more, RSI and price action have been absolutely divergent (red lines).


Going back to an even wider time range, you can see how lofty the S&P 500 is right now. Which is why my puts went up so fast today.


But let's not get too excited yet (lest I get another cowardly voicemail from an Australian hermaphrodite). There have been many times that the market has taken a quick, exciting drop. I've marked each of them here with red lines. And each time, it shakes it off and simply moves on to new lifetime highs. So I'm willing to concede this may be fake-out number twenty thousand and six.


The rest of today's entry is just stock charts, pure and simple - - again, with the focus being on puts. I've mentioned many of these before, and own puts on most or all of them. Goldman Sachs (GS):


Cabot (COG):


Capital One (COF):


Bear Stearns (BSC):


AutoZone (AZO):


Merrill Lynch (MER):


MicroStrategy (MSTR):


Research in Motion (RIMM):


Textron (TXT):


Exxon Mobil (XOM):


Have a good weekend. To most of you, at least.