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Market Stumbles On Economic Worries: SPX, Nasdaq, APA, EOG, IOC, CLF, WLT, BTU, X, AAPL, GOOG, RIMM, AMZN     

Last night, Chinese stock market's Shanghai SE Composite Index dropped more than 100 points, or more than 4%.  This morning, the US market followed the bearish sentiment, gapping lower.  US consumer confidence index fell 10 points in June, the biggest fall since February.  The selling continued throughout the day and the market pretty much ended near the day's low.  Within 30 minutes from the open, the Dow had fallen below the 10,000 mark!

Commodity sectors were very weak.  Energy and mining stocks led the selloff:  APA -3.65%, EOG -4.91%, IOC -4.99%; CLF -10.93%, WLT -7.43%, BTU -7.44%, X -5.87%.  Tech stocks added on more selling pressure with Nasdaq falling 3.85%!  GOOG sank $17.82, or 3.77%; RIMM dropped another 6.08% to close below $50; AAPL sold off more than $12, or 4.52%, even with iPhone coming to Verizon in 2011.  AMZN was hit hard, down more than $10 at point, and finishing down 7.8%.

We did a quick trade on AMZN 110 puts and pocketed a +84% win in just 3 hours:
June 29, 2010
12:35 | HappyTrading AMZN ($106.80) Sold to Close 07P110 Jul 110 put, at $6.20 +82%
09:02 | HappyTrading AMZN ($112.20) Bought to Open 07P110 Jul 110 put, at $3.40

These AMZN July 110 puts went as high as $6.4 and closed at $5.35.

The Dow was down 268.22 points; SPX lost 33.33 points; Nasdaq tumbled 85.47 points:

XME (metals and mining) led the market down with a 6.15% loss.  XLE (energy) fell 3.3% while OIH (oil services) lost 3.88%.  SOXX (semiconductors) and INX2 (internet) were among the weakest in the techs, both down more than 4.5%.  USO (oil) dropped almost 3%.  GLD (gold) eked out a small gain.  FXI (Chinese ADRs) sank 4.03%.

SPX

SPX dropped 33.33 points to close at 1041.24, just above the 1040 level.  The daily MAs and MACD sank lower.

Nasdaq

Nasdaq tumbled 85.47 points to close at 2135.18, below the 2150 level.  Its MACD also curved down.

Since the Dow fell below the 10,000 market within the first 30 minutes of trading, the focus was on SPX 1040 for the rest of the day.  SPX went as low as 1035.18, but, came back up a bit in the last 15 minutes to close above the 1040 level.  However, the damage has been done.  Both SPX and Nasdaq are showing new bearish crossovers in their MACDs.  Their daily MAs are curving down again.  We might see some sporadic bounces tomorrow; but, the momentum is on the downside right now, and, bounces may invite more selling.  VIX topped 35 intraday, and closed just above 34.  There is some resistance at 36 for VIX.  We may see shorts start to cover some positions before Friday's unemployment report.  Profit-taking happens on the downside, too!  There's a lot of focus on the SPX 1040.  If that does not hold, the next soft support is SPX 1025, which would take us back to the support from Oct of 2009!

Good night and HappyTrading! ™ (click to see our Facebook Page)


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