9:00am (EST)
It was another day of see-saw action as the market looked like it was at a roulette table playing black or red throughout the session. For all their efforts, the bulls managed to walk away from the table with a win as all three indexes posted gains.
The Dow finished with a 3 point gain to close at 10,567 but was stuck in a tight range between 10,526 and 10,601.
The S&P 500 traded higher by 5 to close at 1,145. We are watching the 1,150 level to see if it is going to be our short-term ceiling (again) or if we can punch through. If this level is broken it could pave the way to 1,175 and possibly 1,200 down the road.
The Nasdaq once again led the way as the index popped 18 points and is resting at 2,358 after touching another intraday a new high of 2,361.
We mentioned that economic news would pick up by the end of the week and the first one to hit this morning was the jobless claims number. Initial jobless claims came in at 462,000 versus expectations of 460,000, while continuing claims were 4.55 million. Wall Street had expected 4.5 million.
Courtesy of Econoday.com
Futures were already lower but held up well after the release. We are still looking at a lower start and the bears are in throwing the kitchen sink this morning in an effort to spook the markets.
Another element that is weighing on the bulls this morning is the news that China may further tighten credit.
Currently, the Dow futures are off by 34 points to 10,531 while the S&P 500 futures are lower by 5 to 1,140. The Nasdaq futures, which has shown the most strength throughout the recent rally, are down 7 to 1,912.
We think the bulls fight back but they may wait until after we open to start battling back. We still think the market moves higher from here and we have TWO new possible trades we are looking at this morning. Subscribers, check your inbox or the Members Area for all the updates.
Imax Rocks The Box (Office)
Thursday, March 11th, 2010
1:00pm (EST)
The bulls are taking the bears best blows but they ain’t backing down. We have so much to talk about and there are so many moving parts right now that we don’t know where to begin.
First, the market.
The Dow is down 7 points to 10,560 while the S&P 500 is off by 2 and is trading at 1,143. The Nasdaq, which continues to be our hero, is slightly lower by 3 points at 2,355.
Our short-term hurdles are Dow 10,800 and the S&P 500 needs to bust through 1,150. Next week is option expiration and if we stay below these levels the action will be intense as both sides battle over strike prices.
We are still in the bulls camp and anything can happen which is what makes option trading so great. We have been aggressive this week and our trading instincts tell us we are going higher. We also realize that we are facing serious headwinds but nervous money doesn’t make money.
We are seeing the IPO market show signs of life again.
Sensata Technologies (ST, $18.85, flat), a leading global supplier of sensors and controls went public today. The market capitalization for the company is a little over $3 billion, which makes it the largest U.S. company to go public in 2010 to date. There are no listed options on the stock, yet, but we will do some more research to see if there is a trade here when the options do list.
Another story we want to talk about is Imax (IMAX, $16.65, up $0.63) which reported earnings this morning. All we can say is the company is in a groove.
Shares have hit another 52-week high of $17.60 after reporting a profit of $4 million, or $0.06 a share versus a year-earlier net loss of $9 million, or $0.21 a share. Revenue rose nearly 100% to a record $54 million.
The boys on the Street were looking for earnings of $0.07 a share on revenue of $45 million. We had a few emails trickle in today as some of our subscribers choose to keep their March call options open.
We profiled a trade on Imax at the beginning of February that we felt really good about but the market was still finding its way and we were a little early.
If you look at our current 2010 portfolio, you will see we were stopped out for a 50% loss which is one of our trading rules for higher priced options, but man, have they rebounded.
The March 12.50 calls (IMQ100320C00012500, $4.00, up $0.50) were profiled at $1.05 and are showing a 220% return from those levels.
Our target for Imax has been $20 since early October and we told you the momentum was there. Unfortunately, we were just a little early in our portfolio but we are glad it worked out for some of you.
Of course, we have a few trades in our Members Area that we think can replicate those returns. One of our trades that we released Monday just hit a triple-digit return yesterday and we think there may be a little more left in the tank. We also entered two more trades today and we are looking at another as “protection” as we head into Friday and next week.
The action could get intense as the March options expire. Current subscribers, check for the updates.
Tags: Imax, option picks, option signals, options alerts, sensata technologies, st, stock options trading
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