Monday, July 30th, 2012
We’ve had a busy Monday as we have opened two more new trades for our Daily and we were active with one of our Weekly Wrap trades as well.
The market got an opening pop which held for much of the morning but there has been a steady drift lower as the Wall Street and the world brace for the bevy of headlines due out this week.
We covered much of the “what if’s” and who’s meeting who last night and this morning and there isn’t much to update. Economic news has not been a factor today but will be for the rest of the week.
There are a few earnings reports we will be watching this week, including one for tomorrow, but the bulk of the action will come on Wednesday, Thursday, and Friday. While we said this morning the bulls could still push upper resistance, it’s good to see the bears have a little fight in them to start the week.
As we head to press, the Dow is down 19 points to 13,057 while the S&P 500 is off 4 points to 1,382. The Nasdaq is lower by 17 points to 2,941.
We have updated our 2 new trades from this morning with exit prices and what to expect this week. Both options were for September so we have plenty of time for the trades to play out.
Subscribers, check the Members Area for the latest and greatest.
Monday, May 21st, 2012
(To view the charts, please log into the Members Area this morning. Also, for subscribers who upgraded to a 1-year membership over the weekend, please make sure you watch the video we sent this morning for our option course which covers a few more charts we draw out for you on the fly and how we come up with new trades.)
“The major indexes ended mixed on Monday with the S&P and Nasdaq showing the slightest of gains while the Dow fell 30 points. Friday was pretty much the same with the S&P switching sides. We have been talking about negative Friday and Monday closes which are bearish and although there wasn’t a crystal clear picture on this indicator, we would have to say the action favored the bears.
We are unsure on how shares will open and trade when FaceBook becomes public but it should be interesting.
If the offering is well-received by Wall Street, the market could get a bounce, if support isn’t broken by then. If the demand isn’t overwhelming, and shares struggle, look for the bears to step on the gas.”
(from 5/13/2012 Weekly Wrap/ Monday Morning Outlook)…
As you can see from last week’s chart, the market played out like a fiddle as the bears controlled the action all week despite the FaceBook (FB, $38.23, up $0.23) frenzy on Friday. We rode the bears back to one of our most successful weeks of the year as we were able to lock-in profits on 7 more triple-digit winning put option trades.
There was no bounce on Friday as FaceBook got baked into the cake as you can see from our comments in the aforementioned chart’s red box. The bulls are looking for a rebound but the bears did some serious technical damage last week. The charts and other warnings signals we have been giving you have been spot on all year long and so far we have had a HUGE May.
This week’s charts are showing a possible bounce but the overall trend is still lower. (continued…)
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Friday, March 30th, 2012
The bulls made a nice comeback on Thursday after the bears pushed a 1% decline but it wasn’t enough as the most of the major indexes finished lower. Much of the action can be blamed on weaker-than-expected economic news which had been coming in above expectations over the past few weeks.
Initial Claims fell 5,000 to 359,000 versus expectations for a drop to 350,000. The previous week’s numbers were “revised” which accounted for the slight miss but still came in a 4-year lows. Elsewhere, fourth-quarter GDP increased 3.0%, which matched forecasts while Personal Consumption increased 2.1%, also in-line. The data was actually pretty good but Wall Street panicked when it heard the talking heads say we missed numbers. Futures worsened which lead to the opening losses.
The indexes reached their lows an hour into the session but gradually started to climb after lunch with buying really picking up in the last hour of trading.
The Dow gained 20 points, or 0.2%, to settle at 13,145. The blue-chips fell to a low of 13,032 before rebounding triple-digits, but more importantly, they were able to hold the 13,000 level. If the bulls can clear 13,200 today, the rally is still on.
The S&P 500 slipped 2 points, or 0.2%, to close at 1,403. The index touched a low of 1,391 but was able to reclaim the 1,400 level by the closing bell. The break below 1,397 was bearish though as it also represented last week’s low before yesterday. We are expecting to see a 25-point swing, either way, soon which means 1,425 or 1,375 sometime next week.
The Nasdaq dropped 10 points, or 0.3%, to finish at 3,095. Tech traded own to 3,069 but was able to hold 3,050. Last Friday, the index kissed 3,044 before bouncing. These levels will be important to watch if they start to fall today and will favor the bears going into next week while a close above 3,100-3,125 could extend the current rally into April.
Futures are showing a nice open as we head to press and look like this: Dow (+57), S&P 500 (+7), Nasdaq 100 (+11). Subscribers, check the Members Area for the updates.
Tuesday, March 6th, 2012
We said March Madness would come early and that volatility would pick up in the market. Today’s weakness is all about the Greek debt situation, which is back in the front burner. There is a Thursday night deadline for Greece and its bondholders to come to an agreement over the debt bond swap in which the creditors would lose nearly 75% of their value on the bonds. It’s been nice not having to write about this situation for a few weeks but Greece is the word today.
We have spent a lot of time talking about the 5-week trading range we have been in and that there was a good chance this week that the market would move out of this range. We cited Wednesday’s Apple announcement of the iPad3 and Friday’s jobs figures as the two key events that would make or break the bulls push higher.
Often times when resistance is being tested, the indexes tend to overshoot these levels which we have been calling our “fluff” targets”. We said the Dow would move 1,000 points back in late November when the index was at 11,800 and we said the blue-chips would run into resistance at 12,800. We hit this mark in January. We also said if the Dow closed above this level there would be a chance at 13,000. If this level was cleared we said to watch for 13,250. To the downside, we said short-term support was at 12,900 and then 12,800 which is exactly where the Dow has been hovering. The index is currently down 193 points to 12,770.
We also said to look for a close above 1,375 for the S&P 500, which we haven’t gotten, and that if there were further weakness the bulls would need to hold 1,350. The index is down 20 points to 1,344 after opening at 1,363.63 which now bring 1,325-1,300 into the picture.
The Nasdaq is lower by 40 points to 2,910. Tech opened at 2,917and we said a dip below 2,925 would bring 2,900-2,850 into play. Here we are. Apple (AAPL, $529.07, down $4.09) is also lower and another clue we said to watch for.
The S&P Volatility Index (VIX, 21.55, up 1.98) is up 14% and above 20 for the first time since mid-February. This was another clue we said to watch for in Sunday’s Weekly Wrap.
We said there may be an opportunity to add a NEW TRADE or two today and that is what we are doing. Subscribers, check the Members Area for the updates and be sure to use limit orders to get the best fill prices.
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