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9:00am (EST)
The bears got back on track following last week’s drubbing and took the market lower to start the week. The bulls were a little nervous over how much potentially risky government debt European banks are holding and decided to stay on the sidelines which snapped a strong four-day rally.
The Dow fell 107 points, or 1.0%, to finish at 10,340. The index traded to a high of 10,448 and we mentioned yesterday to watch for a close below 10,350.
The S&P 500 dropped 12 points, or 1.2%. and closed at 1,091. The index reached a high of 1,102 and had trouble breaking back above 1,100 all day as we were looking for a close below 1,090.
The Nasdaq gave back 25 points, or 1.1%, to settle at 2,208. The index managed to stay above the 2,200 level for now and any rallies should be capped at 2,250 which is strong resistance.
Futures are pointing towards a slightly higher open this morning as the market prepares for today’s upcoming Fed beige book results. The report should provide further insight into the pace of the domestic recovery but the Fed has been cautious in its statements about the economy in recent months. If the news has any signs of trouble, the bears will use it to their advantage.
As we head to press, Dow futures are higher by 22 points to 10,360 while the S&P 500 futures are up by 2 points to 1,093. The Nasdaq 100 futures are showing a 6 point gain and are at 1,864.
We will be back at 1pm with the latest news. Subscribers, check the Members Area for the updates.
Tight Trading Range Continues, Netflix (NFLX) At All-Time Highs
Wednesday, September 8th, 2010
1:10pm (EST)
The bulls are back in familiar territory as the market awaits President Obama’s speech on a $250 billion jobs recovery plan. The Beige Book is also due out in about an hour while Consumer Credit will come out a little after that.
The President will be talking about a $50 billion infrastructure investment to rebuild and repair the nation’s roads, railways and runways. He will also ask for a permanent extension of research and development tax credits for businesses that will include the ability to write off 100% of their spending on new plants and equipment through 2011.
These events should be move the market and right now the bulls are pushing resistance once again. Volume is light which leads us to believe the market could go either way. If the bulls are going to break through heavy resistance they are going to need more fire power. Plus, the President hasn’t been too confident in his body language lately and any nervousness on his part, the bears will catch.
As far as specific stocks, Netflix (NFLX, $147.74, up $5.95) is at all-time highs and continues to expand its business in so many ways. We loved this stock back in November 2009 when shares were under $60 and although we don’t trade stocks, it has easily been a safety net for anyone who bought some and put it away.
We are hopeful the company will do a 3-for-2 or 2-for-1 stock split so we can start playing options on it again but there might be an opportunity for us to do a straddle or strangle option trade with the October options although the premiums are going to be pretty high.
As we head to press, the Dow is up 77 points to 10,417 while the S&P 500 is higher by 10 points to 1,101. The Nasdaq is showing a 26 point pop and is at 2,234.
We have a lot to cover in our Members Area and we will probably profile a Netflix trade on our Watch List as early as tomorrow. We will do a little more research and give you an update in the morning. Another old friend of ours, Dendreon (DNDN, $42.43, up $2.20) is up over 5% today on no specific news.
Tags: Dendreon, dndn, Netflix, NFLX, option picks, stock options trading
Posted in Company Commentary, Market Analysis, Market Commentary | Comments Off