9:00am (EST)
It was another day of “positioning” between the bulls and bears although the bulls pulled out the hat-trick by taking all three indexes. The market started off slow after a negative open as Wall Street eagerly awaited the Cisco Systems (CSCO, $26.13, flat) news.
It was a classic “buy the rumor, sell the news” event as the company unveiled its super-fast new CRS-3 router. The device is expected to relieve some of the pressure on AT&T’s (T, $25.56, up $0.28) bogged down network but the market yawned. Shares of Cisco immediately dipped to a low of $25.70 but traded to a 52-week high of $26.48 before ending unchanged.
As far as the market, the Dow managed to post a 12 point gain and closed at 10,564. The index traded to a high of 10,612 but has been in a tight range for the first two days of the week.
The S&P 500 added a couple of points and finished at 1,140 while the Nasdaq flexed its muscles once again by adding nearly 9 points, or 0.4%, to settle at 2,340. The Tech-heavy index also touched a new 52-week high for the second consecutive session, topping out at 2,353 intraday.
The market’s rally is impressive and this time feels a little different than where we were in mid-January. We keep talking about how range bound the markets have been but at the end of February (25th) we went out on a limb and had this to say in our “Greece Is The Word” Morning Update:
“We continue to feel the current volatility is pointing towards a big move for the market and Greece’s debt is not NEW news. It’s hard to imagine the bulls giving up here and today’s open will be nasty. However, we think there is one more move higher before the Dow fades and it will be interesting to see how well the bulls battle back this morning.” (END)
The day before our update, the Dow closed at 10,374. That morning, the index traded to a low of 10,155, down over 200 points, but managed a close of 10,321, down 53.
We have the luxury of looking back now and we realize that day was the bears best day to take the Dow below 10,000. The index did bend that day but didn’t break and we have moved up 400 points since.
On Sunday night we raised our targets for all three indexes:
Dow 11,000; S&P 500 1,200; Nasdaq 2,400.
Of course, the market still must break through our targets from August 2009 which were hit in January: 10,800 for the Dow; 1,175 for the S&P 500; 2,275 for the Nasdaq.
We don’t mention this toot our horn but as a reminder that we aren’t out of the woods, yet. We always like to explain the risks of what can happen to our option trades based on market direction and although we are super bullish…we haven’t taken our blinders off.
The indexes still need to plow through our original August targets and if we fade from here like we did in January then it will only frustrate more traders. We are still in a “trader’s market” and these are the key levels we are watching for the rest of this week and next.
After that, we could get choppy again before first quarter earnings come into focus. This is where things will really get interesting. We are also seeing an incredible amount of action in an array of sectors and M&A is hot again. These catalysts could form to be a tidal wave and the bears could get flushed out of the market if key resistance levels are broken.
As we head to press, Dow futures are up 3 while the S&P 500 futures are up a point. The Nasdaq 100 futures are higher by 4 as Tech tries to lead the way today. Current subscribers, check the Members Area for the updates.
Tags: option picks, option signals, options alerts, stock options trading
This entry was posted
on Wednesday, March 10th, 2010 at 9:03 AM and is filed under Market Commentary.
You can follow any responses to this entry through the RSS 2.0 feed.
Both comments and pings are currently closed.
Get RSS Feed
Wednesday’s Wakeup Call
9:00am (EST)
It was another day of “positioning” between the bulls and bears although the bulls pulled out the hat-trick by taking all three indexes. The market started off slow after a negative open as Wall Street eagerly awaited the Cisco Systems (CSCO, $26.13, flat) news.
It was a classic “buy the rumor, sell the news” event as the company unveiled its super-fast new CRS-3 router. The device is expected to relieve some of the pressure on AT&T’s (T, $25.56, up $0.28) bogged down network but the market yawned. Shares of Cisco immediately dipped to a low of $25.70 but traded to a 52-week high of $26.48 before ending unchanged.
As far as the market, the Dow managed to post a 12 point gain and closed at 10,564. The index traded to a high of 10,612 but has been in a tight range for the first two days of the week.
The S&P 500 added a couple of points and finished at 1,140 while the Nasdaq flexed its muscles once again by adding nearly 9 points, or 0.4%, to settle at 2,340. The Tech-heavy index also touched a new 52-week high for the second consecutive session, topping out at 2,353 intraday.
The market’s rally is impressive and this time feels a little different than where we were in mid-January. We keep talking about how range bound the markets have been but at the end of February (25th) we went out on a limb and had this to say in our “Greece Is The Word” Morning Update:
“We continue to feel the current volatility is pointing towards a big move for the market and Greece’s debt is not NEW news. It’s hard to imagine the bulls giving up here and today’s open will be nasty. However, we think there is one more move higher before the Dow fades and it will be interesting to see how well the bulls battle back this morning.” (END)
The day before our update, the Dow closed at 10,374. That morning, the index traded to a low of 10,155, down over 200 points, but managed a close of 10,321, down 53.
We have the luxury of looking back now and we realize that day was the bears best day to take the Dow below 10,000. The index did bend that day but didn’t break and we have moved up 400 points since.
On Sunday night we raised our targets for all three indexes:
Dow 11,000; S&P 500 1,200; Nasdaq 2,400.
Of course, the market still must break through our targets from August 2009 which were hit in January: 10,800 for the Dow; 1,175 for the S&P 500; 2,275 for the Nasdaq.
We don’t mention this toot our horn but as a reminder that we aren’t out of the woods, yet. We always like to explain the risks of what can happen to our option trades based on market direction and although we are super bullish…we haven’t taken our blinders off.
The indexes still need to plow through our original August targets and if we fade from here like we did in January then it will only frustrate more traders. We are still in a “trader’s market” and these are the key levels we are watching for the rest of this week and next.
After that, we could get choppy again before first quarter earnings come into focus. This is where things will really get interesting. We are also seeing an incredible amount of action in an array of sectors and M&A is hot again. These catalysts could form to be a tidal wave and the bears could get flushed out of the market if key resistance levels are broken.
As we head to press, Dow futures are up 3 while the S&P 500 futures are up a point. The Nasdaq 100 futures are higher by 4 as Tech tries to lead the way today. Current subscribers, check the Members Area for the updates.
Tags: option picks, option signals, options alerts, stock options trading
This entry was posted on Wednesday, March 10th, 2010 at 9:03 AM and is filed under Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.