The Local's Take: Morning Commentary

Good Morning Traders and Investors,

Let's talk about the Double Whammy.

When Sundance hits, Locals are hoping for the Sundance effect - snow and tourists who are unprepared for the snow. Therefore, they hit the retailers hard, buying hats, scarves, gloves, boots. They probably all buy them in black, but nonetheless, they buy. Hence, the double whammy.

Since most aren't here to ski as networking and of course the films are the themes over the 2 weeks, the snow is untouched and hopefully plentiful.

Deer Valley received 8" overnight and looks like it is continuing. Great shots in a bowl named after a lady.

When it comes to the markets, volatility adds a double whammy to put positions. In order to protect your portfolio from donwdrafts and bear markets, it is smart to buy puts on the overall markets (SPX) and/or your individual stock position (married put). When the markets swoon to the downside, the VIX or volatility or "fear index" creeps up adding oomph to your put position. Hence, the double whammy: the stock is going down which increases your put value and volatility goes up, increasing your put value. It's like turning on the afterburners.

As far as economic data goes, unemployment claims climbed this week as did the 4 week average. Unemployment is still in an uptrend, we just took a few month break before it resumes (authors opinion).

Let's look at one of the bellweather stocks - Aaple:

210 has become an interesting area of previous resistance and now support. If it goes back below, I would think that you could protect your investments with just OTM options at 215 or 220 with tight money management.

Since the Outdoor Retailer Market is in town, let's take a look at a publicly traded company that attends the show every year looking for new products - Gander Mountain:



This is an example of a stock that you wouldn't want to trade!! We should be trading household names with volume of at least a million per day that fall into YOUR price range.

And finally, the Socially Responsible stock for the day:




Forex updates are coming next as yesterday was very quiet given the selloff in equities. Let's see if the markets hold in and get an early bid, we should see the dollar weaken a bit.

Be Environmentally Cool with Locals Have More Fun apparel.