Market Trends:

In the telecom industry, the major story today is that the Federal Communications Commission has again postponed the merger of AT&T Inc. (T:NYSE) and BellSouth Corp. (BLS:NYSE).

Commissioners overseeing the $80 billion merger are reported to be unable to agree on conditions of the deal.

This merger has already been postponed three times, and if finally approved, will create the most monstrous U.S. telecommunications provider, with over 300,000 employees and a market value of more than $200 billion!

In that same vein, our play on the telecommunications industry in WaveStrength Trader is fairing well, and will do even more so if this merger is approved.

Trading Tactics

“The Battle for 12,000” continues as the markets are once again struggling to pick a direction.

Today's unemployment reading of 4.4% is the lowest in five years, which pushed the Dow up 32 points in pre-market trading. But one hour after the open, the Dow is once again threatening to turn negative, supporting our thesis that any upside momentum is fading away.

On reversals like this, we're certainly comfortable maintaining our DIA puts in WaveStrength Trader. Keep in mind, we still haven't seen a sell-off of any magnitude yet. If the bulls roll over, we could be 300 points in the red in the blink of an eye.

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