Stock option strategies
Just wanted to wish you the best and happiest holiday season.
I hope that you had a great 2010 and I pray that 2011 brings you closer to all that you desire.
2010 was a crazy year for the stock market. Nonstop ups and downs – kinda like a roller coaster at Six Flags.
The S&P is up over 6% in just December alone – and we aren’t even done yet!
But what will 2011 bring?
I would be lying if I told you I knew. No one knows. The TV, radio, and magazines are filled with “pundits” giving their predictions on how high the markets will go next year. But they have no clue. They couldn’t predict with any accuracy what the market will close at on Jan 1, much less Dec 31.
Options Trading: 2011 Stock Market
But I like guessing games so I will make some guesses too – based on what I see.
#1 I agree with the 60 minutes report that the next big crisis will be the state and local governments going broke. They are going to need money from somewhere and it will probably be the FED buying municipal bonds. Otherwise we will be paying a lot more in taxes to our local governments and be getting a lot more speeding tickets.
#2 The markets will close higher next year. Why? Because the recovery is already here. All the business owners I am taking to – except those in real estate – are saying that sales and traffic is picking up. A perfume retailer told me this year will be his best year ever in 20 years. A woman who runs a Bridal convention says she sold out of all her booths way in advance of the show. A software developer friend has enough work to back him up for months and he cannot find people qualified to hire fast enough. Sure these are isolated stories and there are parts of the country still hurting, but things do seem to be getting better.
#3 Inflation is here and will be more evident in 2011. And this is another reason the markets will be going higher. Oil, gasoline, food, clothes and more will all cost more in 2011. Three reasons – once is the monetary policy. Two is an increase in demand. And three is a reduction in discounts. Don’t look for the sales of this year next year. There will be fewer sales and the discounts will be much lower. So you might want to stock up now.
#4 But the markets themselves will be much calmer. I believe it will be a great year for option sellers. There is less uncertainty in the markets and it look like things will go back to normal.
Am I right or wrong? It will take a year to find out. But let me know your thoughts below. Also, please go check our option trading blog for useful stock option trading strategies and investing tips and follow us on Twitter to get more option selling updates.