January effect, earnings and OPEX


What is the January Effect?  

simple answer    http://en.wikipedia.org/wiki/January_effect

I stated weeks ago, that we could have a nice Santa rally followed by the January Effect……..  Guessing how high we go is not my game, but riding the wave until we get there, IS.

Do you play earnings?   

simple answer:NO

If you are an investor, you are not “playing” earnings, you are investing through them for many years.  If you are a trader(day or swing), YOU DON”T PLAY EARNINGS!!!!!!     If you are a gambler(cuz that is EXACTLY what it is) feel free to roll the dice.

The only success you will have “playing”/gambling on earnings, is when the BIG MONEY(institutional) is front running the action with options.   And YES, they do know something, most of the time.

What the heck is OPEX?

simple answer: http://en.wikipedia.org/wiki/Expiration_%28options%29

The 3rd Friday of every month options expire(obviously we  have weekly options too).  This action usually creates volatility, and often you will see a low print in the market  Thursday/Friday, the  week before expiration.


I still feel the financials($FAS, $C, $GS, $JPM, $BAC) will lead this market higher into Jan Opex.   Buy the dips and use stops.


Good Luck to all