April expiry is here! It’s time to look forward to May and I’m happy to report that the puts show signs of stabilizing but unfortunately, the calls are all over the board. There’s an old adage that says, “sell in May and go away” and I think that may apply here. The fact that there is less put action and still a lot of call action may be an indication that the market will be flat over the summer. Some investors (such as myself) are still waiting to see what type of government meddling is going to be taking place over the next few weeks and months. Sticking my toe in the pool and I can’t tell if the water is cold or warm!
The uptick rule may go back into effect at some point or it may not. There may be new regulatory requirements for financial institution or there may not. Banks may be able to pay back TARP funds or they may not. If TARP funds are paid back, the government may relinquish control or it may not. I could go on but I think you get the point, I’m sitting on the sidelines until I get some definitive answers that can be quantitatively measured via formula, logic and equations and not maybe’s.
Here’s the ETF-Cashinator report for May 2009:
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