2 Option-Based Strategies to Overcome High Volatility

Two related and unresolved economic issues are weighing heavily on the market since the beginning of August, creating lots of uncertainty for investors:

1. Will the U.S. (and the world economy) go into recession before year end?
2. Is the Euro doomed to fail?

Some have called the bottom at 1100 on the S&P 500 Index following the August 9th selling climax. Unfortunately, the answers to the above questions will only be known in hindsight, 6 months or a year from now. In our opinion, investors should remain defensive with a focus on capital preservation.

Three bellwether indicators speak loudly and attest of investor nervousness :

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