Market Overview By RandomWalkTrading.com
June 29, 2011
Bank of America
Many people are ecstatic about the $8.5 Billion payout BofA has to pay its mortgage holders. It is a great start, in many opinions, to help restore the integrity of the financial system. Random Walk has a different opinion in that if BOTH you and your attorney are not competent enough to read a contract, you are not competent enough to be a home owner. The whole mortgage meltdown was about one thing only – GREED, and there was enough blame to go around with the homeowners treating their home like an ATM machine being the primary devil in the woodpile.
The markets are currently up for the third day in a row with Greece passing austerity measure that will allow them to obtain loans and avoid insolvency. We believe this is a temporary relief rally, but nothing substantial which will carry over past this week.
The markets are a tricky call right now. With the fall below 12,000 and the subsequent run back higher , it is tough to gauge where this market really wants to go now. If we had a gun pointed at our heads we would reluctantly assume the next move is to the downside. Yet, because of the difficulty in picking a direction with a lack of any clear trend, positions like unbalanced 1-5 spreads, unbalanced condors, and Broken Wing Butterflies (BWBs) will perhaps be the best risk v. reward strategies to set up decent bets in both directions.
For more information about the BWB strategy check out Random Walk’s One Strategy For All Markets textbook:
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