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This month I lost money on many of my cash-secured puts. Too many stocks declined below the put option strike price and I had to buy the puts I sold back at higher prices. Selling puts is equivalent to buying stocks and selling call options on the shares. I learned again the lesson not to sell puts or covered calls during a weak or declining market. GMI0116 The QQQQ short term up-trend ended last week. Once the QQQQ fell into a down-trend, I closed all positions and bought a very little of QID, the ultra short ETF on QQQQ. If the QQQQ down-trend deepens I will buy more QID. Otherwise, I will stay mainly in cash. The GMI and GMI-R are both back to zero and the T2108 is at 59%–neutral territory. Only 27% of the NASDAQ 100 stocks closed with their MACD above their signal lines, down from 88% on January 2nd.

Are we near a bottom? Armageddon When three DOW 30 bank stocks, C, BAC and JPM, look like this weekly chart of BAC, I have to think that some kind of debacle is on the horizon. These declines came on huge weekly volume, indicating massive selling. When we factor in that these 3 banks and 7 other DOW 30 stocks fell more than 5% last week, I do not see a bottom, more like a black hole.   Read on to see the graph:

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