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Defense Is the Best Offense: Pause to Be Expected, Najarian Says
Posted Jul 06, 2009 01:39pm EDT by Aaron Task in InvestingBut Jon Najarian, co-founder of OptionMonster.com, isn't too worried about the recent action, saying the market is merely experiencing a natural pause after its huge rally from the March lows. "I don't see anything out there that's going to cause us to do that in the short term," he says.
That said, Najarian believes the market is likely to remain range-bound for the bulk of the summer and advises traders to take a more defensive stance, recommending health-care stocks like Cardinal Health and consumer staples like Wal-Mart. (Najarian was long both at the time the accompanying video was taped.)
For options traders, he recommends a "collar trade" of selling calls at or just above the market and buying S&P 500 puts - creating an "insurance policy" to protects you against a big drop, he says. "At a minimum what you want to do is lock in some of the gains you've got."
22 Comments
Yahoo! Finance User - Wednesday July 08, 2009 12:35AM EDT
jjpnow - Monday July 06, 2009 02:36PM EDTThis is your opportunity. Stop trying to time the market. Buy a broad index and hold on. ++++++++++++++++++++++++++++++++++++++++++++++++++ Good luck holding on to your losses by buying at these levels ... Goldman will love you. Meanwhile the rest of us will wait for the coming much cheaper prices to buy.
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frankmargel.com - Tuesday July 07, 2009 12:16AM EDT
Jon is more practical than most guests on the ticker. I like the doom and gloom guy too. Laughs! I like the occasional rant and extreme optimist. My best guess is the market will continue to disappoint even the most fair minded and savvy players. I like the dow at fair value which is impossible to guage with all the bailouts. I continue to watch Alcoa and see the bell weather decline as demand for aluminum sucks the life out of one of the largest players in the world. The market is bearish until housing and commodities recover. The consumer based recovery is a bullish indicator when other factors prevail. Invest wisely and diversify...Lookout if AA tests at the 8 dollar range. Buy AA when the dow sells off most of the gains achieved since march 2009. Do whatever you want it's your money...Laughs! Later Gang!