We are long 800 shares with a cost basis of $12.90 against eight January 17 calls shorted for 0.80. It is time to cover the calls, since they can be bought for as little as 0.05. Do so, shorting eight February 17 calls at the same time for 0.40. If successful, we’ll have rolled the covered write and reduced our cost basis on the stock to 12.55.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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Is Decline of U.S. Manufacturing Exaggerated?
by Rick Ackerman on December 29, 2009 2:36 am GMT · 40 comments
We usually think of America as a has-been in manufacturing, so the graph below may come as a surprise to some readers. It was sent to us by our friend Brad, who likes to play devil’s advocate whenever we go over-the-top with some outlandishly bearish prediction about the economy. The graph itself accompanied a recent article in National Affairs, “Keeping America’s Edge,” by Jim Manzi. America’s apparent decline in manufacturing is a claim that has been repeated so often that few would think to challenge it. The U.S. used to make real “stuff,” according to this argument, but now it no longer does. What this graph shows, according to comments at Manzi’s blog, “is that this claim is at best » Read the full article