12:40pm (EST)
The bears got some more good news after the opening bell when the Commerce Department reported new home sales “unexpectedly” fell 12.4% in July to 276,000. We highlighted “unexpectedly” because the pencil pushers had forecast new home sales would come in unchanged at 330,000.
Are you serious? Unchanged? Anybody who has been watching the housing market knows it is rolling over like Lassie and playing dead. The analysts are always late to the party, or funeral, with their upgrades/ downgrades and are like weather forecasters when it comes to knowing what the heck is going on. That is why you have us.
Despite the double whammy on the economic front today (we mentioned the durable goods numbers this morning), the market is well off its lows for the session as it teeters near the breakeven line heading into the second half of trading.
Financial stocks continue to show weakness and although we aren’t there yet, there will be bargains. We like Bank of America (BAC, $12.48, down $0.16) and we have been watching the move lower since shares broke their 52-week low. In our Members Area we said shares could test the $10-$11 area and we are getting close to adding some attractive LEAP options to our portfolio that could return up to 200% in a year or so.
LEAPs are long-term options that cost much cheaper than the stock itself and BAC will be a bargain here shortly.
Another stock we had targeted for a move lower was Wells Fargo (WFC, $23.22, down $0.42) which has also touched a fresh 52-week bottom. We don’t like the company long-term or anything but back in late May we had a feeling shares would test $25 when they were at $30. We were a couple of months early on that trade but the charts were right.
Shares now look like they could test $22 and a break below there could lead to the high teens. We have been saying the bulls will not be able to break through resistance without the help of the Financial stocks. With the sector setting new lows, it’s hard to imagine a sustained rally taking place.
As we head to press, the Dow is showing off by 13 points and is at 10,027 while the S&P 500 is down 2 points to 1,049. The Nasdaq is up 2 points to 2,126.
We will be back in the morning with a full update.
Tags: bac, option picks, stock options trading, wfc
This entry was posted
on Wednesday, August 25th, 2010 at 12:42 PM and is filed under Financial Stocks, Market Analysis, Market Commentary.
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Financial Stocks Continue to Plunge
12:40pm (EST)
The bears got some more good news after the opening bell when the Commerce Department reported new home sales “unexpectedly” fell 12.4% in July to 276,000. We highlighted “unexpectedly” because the pencil pushers had forecast new home sales would come in unchanged at 330,000.
Are you serious? Unchanged? Anybody who has been watching the housing market knows it is rolling over like Lassie and playing dead. The analysts are always late to the party, or funeral, with their upgrades/ downgrades and are like weather forecasters when it comes to knowing what the heck is going on. That is why you have us.
Despite the double whammy on the economic front today (we mentioned the durable goods numbers this morning), the market is well off its lows for the session as it teeters near the breakeven line heading into the second half of trading.
Financial stocks continue to show weakness and although we aren’t there yet, there will be bargains. We like Bank of America (BAC, $12.48, down $0.16) and we have been watching the move lower since shares broke their 52-week low. In our Members Area we said shares could test the $10-$11 area and we are getting close to adding some attractive LEAP options to our portfolio that could return up to 200% in a year or so.
LEAPs are long-term options that cost much cheaper than the stock itself and BAC will be a bargain here shortly.
Another stock we had targeted for a move lower was Wells Fargo (WFC, $23.22, down $0.42) which has also touched a fresh 52-week bottom. We don’t like the company long-term or anything but back in late May we had a feeling shares would test $25 when they were at $30. We were a couple of months early on that trade but the charts were right.
Shares now look like they could test $22 and a break below there could lead to the high teens. We have been saying the bulls will not be able to break through resistance without the help of the Financial stocks. With the sector setting new lows, it’s hard to imagine a sustained rally taking place.
As we head to press, the Dow is showing off by 13 points and is at 10,027 while the S&P 500 is down 2 points to 1,049. The Nasdaq is up 2 points to 2,126.
We will be back in the morning with a full update.
Tags: bac, option picks, stock options trading, wfc
This entry was posted on Wednesday, August 25th, 2010 at 12:42 PM and is filed under Financial Stocks, Market Analysis, Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.