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Friday, January 20, 2006

Stock Market Correction

I am not surprised about the selloff in the market today. Once Japan had their big one day drop it was bound to happen in the US market. I think oil has a role in today's decline, but I believe options expiration played a larger role in the drop. Plus everyone knows how most traders think. When something starts dropping they think it's going to zero, panic, and then sell. I don't think this a buying opportunity. Forward guidance for earnings needs to above expectations for the market to advance further. Gold, energy, select healthcare, and select technology stocks will be good longs in 2006.

2 Comments:

Blogger muckdog said...

Check out the Google options today. A ton of money lost there. Or if one had puts, a ton of money was made....

1/20/2006 5:17 PM  
Blogger Big Ben said...

I would look at buying some Feb Google calls on Monday. Google looks oversold. I would sell the calls before earnings though.

1/21/2006 1:08 PM  

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