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Thursday, November 11, 2010

Reducing SPY Long Positions.

- I am exiting out of my long call spread position at open for following reasons. 1) US Dollar is showing the most strength it has in the past 2 and half months, obviously due to rising concerns once again from Europe's weaker economies. 2) CSCO stock's plunge after earnings is not a good sign, and besides technical snapshot of AAPL, the leader of tech stocks looks weak. 3) SPY has had a tremendous run, and even though it is still moving within the steep rising channel, my feeling is that SPY will undergo a period of consolidation.
- I would like to take all the long positions off, but will maintain discipline and keep the 45 SPY shares long, but with a profit/stop of 119.5
- FVE indicator is starting to rise again, 16.2 vs mean SPY implied volatility of 15.9 according to IVolatility.com as of yesterday's close. Obviously with SPY premarket being down, implied volatility would likely spike up, but I would look for opportunitites to buy options.

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