After A Volatile Year S&P Finishes Unchanged

Broader Market Weekly Performance:

Dow -0.62%

S&P -0.63%

Nasdaq -0.31%

Russell -0.68%

www.BookingAlpha.com

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MARKET UPDATE:

What a year! For the S&P to end the year within $0.02 of where it opened on Jan 1 after such volatility is almost spooky. BookingAlpha navigated the tumult with it's share of bumps along the way but ultimately finished with great returns for 2011:

+72.33% for the Monthly Trading Service, and

+42.22% for the Weekly Trading Service

That is serious Alpha!

Trading for BookingAlpha was purposefully light for the last week; the final trading week of the year. Both services had Deep ITM Debit Spreads which expired during Friday's Quarterly Options Expiration for handsome profits: +21.21% Monthly Service Debit Spread, and +9.41% Weekly Service Debit Spread

Trading volumes were extremely thin which makes new trade executions somewhat precarious. Therefore, I elected to rest on the year's profits and let the 2 open spreads expire for maximum profits so I could focus on heading into 2012; no trade chasing here.

I expect 2012 to be just as volatile as 2011. There is a lot of opposing jawboning out there right now and everyone has opinion. Some propose we are entering a new bull market decade domestically. Others expect the market, and the entire world, to come to an end. I don't subscribe to either theory.

I expect the market to move higher in January. There is a lot of enthusiasm out there about a New Year, another record round of corporate profits to be announced, and the political/election hub-bub.

However, there are still some dark clouds on the horizon. Slowing growth in China and credit downgrades in Europe-land will keep the bulls somewhat in check. Domestically, political finger pointing and ultimately gridlock will continue dampen the rest of the worlds enthusiasm regarding the US. In 2011 the largest foreign concern about the US was political gridlock and in-fighting.

That being said, I see market moving higher in January and possibly through all of Q1. But, I don't see a runaway rally. To bottom line it for you: The upside is fairly limited with greater exposure occurring to the downside.

So how do you play it? I have already begun tweaking my strategy through the last few months as volatility expanded. The resulting trading performance has been awesome so I feel validated in my approach.

I will play cautiously from the long side as Q1 gets underway. I don't feel like any major shoes will drop until around February so I feel there is a pseudo floor under the market with the enthusiasm of traders rested up from the Holiday break getting back into the swing of things. However, all it will take is a major headline out of the Euro-zone and markets could careen to the downside. Therefore, I will be very sparing and judicious with any short put positions until we experience a downside break.

I do not fear missing out on potential profits under the current market circumstances. The market is still woozy from Holiday trading and will take the first week of Jan to get the rust out. That is when we will see what it has in the tank. Like always, I will be looking to take opportunistic advantage of market extremes for new trades. I will not rush into deploying capital for the sake of doing so. I know you get tired of hearing it, but: Remember, sometimes the best trade is the one you didn't make.

Trade smart instead of trading for the action. If you want action go see the new Mission Impossible movie: Ghost Protocal. It will be much cheaper than risking your capital just for the sake of feeling like you are in the market.....I promise.

BOOKINGALPHA UPDATE:

Monthly Trading Service Commentary:

This week closes the year that was 2011. It was another phenomenal year for the Monthly Trading Service.

The last remaining open position, an SPY Deep ITM in the debit spread, expired for max gains during Friday's Quarterly Options Expiration. The expiring spread brings the portfolio to 100% cash as we begin 2012.

The Monthly Advisory continues to outperform and deliver consistent drama-free Alpha:

+72.33% BookingAlpha Monthly Advisory

vs.

-0.01% YTD S&P 500

See Trading Record

Weekly Trading Service Commentary:

This week closes the year that was 2011. This years extreme volatility (greater than 2008) caused some ups and downs for the Weekly Trading Service. However, my consistent approach to continually refine and adapt my trading strategies proved successful yet again by producing a handsome YTD return for the Service. Furthermore, the refinements incorporated into the strategy prepares the service appropriately to head into 2012.

The Weekly Advisory continues to outperform and deliver Alpha:

+42.22% YTD BookingAlpha Weekly Advisory

vs.

-0.01% YTD S&P 500

See Trading Record

Navigate wisely and stay profitable, my friends. Happy trading!

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