My Happy Trading Community Articles

Markets Back to Highest Edge of Range

Bagger Vance — Sun, 14 Mar 2010 14:29:00 GMT

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The SPX finds itself at the upper crust of a range, which on the surface seems to be narrowing. How is that so? Just look at the daily chart and you'll see a series of higher lows and higher highs up to this recent level. One could say the correction down from mid Jan to early Feb was enough to burn off the excesses from a big 2 1/2 month run starting on Halloween. Whatever the case, there is good action and positive rotation from sector to sector. If it's not tech leading then it's commodities, or perhaps financials or retail. This type of movement has kept the excess enthusiasm contained and allowed the VIX to drift lower and hang at its multimonth lows (see chart). The Nasdaq and Russell 2K have been the clear winners of late, outperforming its bigcap breathren. I think that's going to change soon, the charachter of the rally moving to names like MCD, IBM and INTC.

We could see some good action as traders look to take the indices up. Likewise, I would expect to see some profit taking at some point of the week, but the expiration on Friday doesn't seem to present too many problems. Big open interest for SPX puts is below the 115 mark while sizes in calls are small.

We have profits on existing positions, both March and April. Hold tight until we pull the trigger. For the week it as rather mixed, but we did lock down some nice wins along the way (see below). Unpublished trades were good this week (big gains on goog, aig), but that's only the tip of the iceberg. FYI, if you're not getting my timely alerts via email go this section for easy signup. https://www.myhappytrading.com/Subscribe/Bagger+Vance.aspx

Booked trade results for the week:

March 10, 2010
10:28 | Bagger Vance TIVO ($16.45) Sold to Close TUK 04172010 17 C Apr 17 calls, at $0.75 -52%
10:26 | Bagger Vance NFLX ($71.00) Sold to Close QNQ 03202010 65 P Mar 65 put, at $0.20 -88%
10:17 | Bagger Vance HIG ($27.00) Sold to Close HIG 0320201 24 C Mar 24 calls, at $3.20 +60%
07:02 | Bagger Vance RIMM ($74.80) Sold to Close RFY 03202010 70 C Mar 70 calls, at $5.00 +67%

March 09, 2010

09:10 | Bagger Vance V ($91.40) Sold to Close V 04172010 90 C Apr 90 calls, at $3.45 +103%

Have a terrific rest of the weekend, I'll see you early Monday!

Bagger

3/12/10 Weekly Wrap POT, GOOG, RIMM

HappyTrading — Sat, 13 Mar 2010 23:16:00 GMT

The market had another strong week. Financials and techs kept the market higher. Nasdaq continued to plow higher and SPX closed right at 1150; well, 1149.99! We also had a great week, with 100% of the closed trades in the GR$$N We closed out a +87% winner on RIMM early in the week and scored a +205% gain on GOOG. To top it off, POT got a nice pop on Friday as it raised its profit outlook. We locked in some profits on POT with just 2 days into the trade, for a +82% gain:

March 12, 2010
06:37 | HappyTrading POT ($126.65) Sold to Close 04C120 Apr 120 calls, at $10.00 +82%

March 11, 2010
08:09 | HappyTrading GOOG ($582.50) Sold to Close 03C570 Mar 570 calls, at $16.80 +205%

March 10, 2010
12:58 | HappyTrading GOOG ($577.40) Sold to Close 03C570 Mar 570 calls, at $12.50 +127%
09:13 | HappyTrading WYNN ($71.65) Sold to Close 03C70 Mar 70 calls, at $2.60 +30%
06:55 | HappyTrading RIMM ($74.78) Sold to Close 03C70 Mar 70 calls, at $5.00 +87%

March 08, 2010
08:00 | HappyTrading RIMM ($72.80) Sold to Close 03C70 Mar 70 calls, at $3.70 +38%
07:43 | HappyTrading RIMM ($72.40) Sold to Close 03C70 Mar 70 calls, at $3.35 +25%

The Market Forecast (click here to see) for this past week was right on again! I'll be back tomorrow with next week's Market Forecast. Stayed tuned!

Hope you're having a fun Saturday!
Good night and HappyTrading! ™

Financials Help S&P 500 To New High! SPX, Nasdaq, GS, C, PNC, STI, V, MA, RIMM, GOOG, AMZN, AAPL, FSLR, STP, TSL

HappyTrading — Fri, 12 Mar 2010 04:21:00 GMT

Financials stayed strong today and helped to push S&P 500 to a new 17-month closing high! In my Market Forecast this weekend, I said, "... the market has gone quite far, so it may need a breather through the mid-week. If the market can hold its altitude while letting off some steam, we could see the market push higher by the end of the week." Sure enough, the market treaded water for a few days, and, in the last trading hour today, it pushed higher. GS continued to glide higher, closing above $173/share today. C jumped another +5.56%. PNC broke higher, up +1.81%. STI was seeing a lot of "call-buying" activities, being higher for the 6th consecutive trading session, adding another +2.23% today! V and MA, mentioned on Tuesday, went up again.

During the past couple of days, we cashed out on some good profits, including a +205% gain on GOOG:
March 11, 2010
08:09 | HappyTrading GOOG ($582.50) Sold to Close 03C570 Mar 570 calls, at $16.80 +205%

March 10, 2010
12:58 | HappyTrading GOOG ($577.40) Sold to Close 03C570 Mar 570 calls, at $12.50 +127%
09:13 | HappyTrading WYNN ($71.65) Sold to Close 03C70 Mar 70 calls, at $2.60 +30%
06:55 | HappyTrading RIMM ($74.78) Sold to Close 03C70 Mar 70 calls, at $5.00 +87%

We also took profits on RIMM, which continued to go higher. Those RIMM Mar 70 calls closed at $6.05 today. AMZN broke out higher today, closing at $133.58, up +2.35%. AAPL barely closed above $225.

The Dow was up +44.51 points; SPX added +4.63 points; Nasdaq gained +9.51 points:

BTK (biotechs) continued to see new highs. Commodity sectors were mostly flat. XLF (financials) added +0.84%. PBW (clean energy) finally bounced, by +1.31%. GLD (gold) and SLV (silver) came back up to close in the green after being down in the morning. UNG (natural gas) sank another 3.24%, a new low. FXI (Chinese ADRs) slid 0.39%.

SPX

SPX added +4.63 points to close at 1152.24, just above the 1150 level. Its daily MAs and MACD went higher.

Nasdaq

Nasdaq gained +9.51 points to close at 2368.46. Its daily MAs and MACD continued up.

So, SPX finally pushed higher to close above that 1150 level. Nasdaq has been much stronger, climbing a little higher each day. As I pointed out in my Market Forecast, "techs should be strong in a bullish environment." While the financials have been strong, the commodity sectors have been taking a break so far this week, especially the mining stocks. After pushing higher last week, we saw profit-taking in gold; and, the mining stocks flatlined. If GLD (gold ETF) can clear above $110, I think gold is going higher. When gold goes up, mining stocks usually do well. Sidelined money seems to be looking for sectors that have not broken out yet. So, we'll be watching the mining stocks. Another area that has been really weak is the solar stocks. Today, we saw solar names start to attract some buyers. FSLR added +2.47%; STP went up +2.11%; and, TSL gained +2.67%. These should be ready to go higher if the market keeps its strength.

Good night and HappyTrading! ™

Gates Dethroned As The World's Richest

HappyTrading — Thu, 11 Mar 2010 00:22:00 GMT

Well, the report card just came out, and, Microsoft's Bill Gates is no longer sitting on top! According to Forbes 2010 list of the World's Billionaires, Mexican tycoon Carlos Slim Helu has beaten out Americans Bill Gates and Warren Buffett to become the wealthiest person in the world. After dominating the list 14 times out of the last 15 years, Gates was slightly edged out by Slim. Well, that "slight" amount was $500 million!! I'm sure Mr. Gates does not mind these days, since he seems to be a lot more involved in charity than business.

When you look closely at who made more money and from where in 2009, you can kind of get an idea of how the global economic recovery is going and where the money is being spent:

Emerging Markets and Commodities
I find it interesting that 3 out of the top 5 billionairs are non-Americans. #1 is "the Mexican", telecom tycoon Carlos Slim Helu, as the new wave of Internet Revolution (Mobile Devices) is taking place. #4 Mukesh Ambani and #5 Lakshmi Mittal are both Indians and are in the business of oil & gas and steel, respectively. This says a lot about the emerging markets and commodities. While the US billionaires had lost fortunes in the financial crisis of 2008, and regained some of their wealth in 2009, emerging markets are recovering and building much faster. Take a look at #8 Eike Batista, who's from Brazil, in oil and mining. Mr. Batista added $19.5 billion to his personal balance sheet!!

People Still Need To Eat
More than $80 billion worth of wealth is still controlled by the Walton Family of Wal-Mart (#12, #15, #16, and #18). #8 Karl Albrecht (Germany, discount supermarkets) also added to his wealth. During hard times, people are shopping more in discount stores. It is interesting to note that Karl's brother Theo, who developed Trader Joe's in the US and was #9 on the Billionaire's List last yesr, did not make into the top 20 this year. Ingvar Kamprad of Ikea (discount furniture) is still among the top 20.

The Wealthy Is Still Shopping
Bernard Arnault (France, Luxury Goods), who was #15 in 2009, jumped to #7 this year after making $11 billion!! #9 Amancio Ortega (Spain, Fashion Retail) added $6.7 billion to his personal worth. #17 Liliane Bettencourt of L'Oreal did better and squeezed into the top 20. Rich people are still shopping well and looking good!

Good night and HappyTrading! ™

Market Takes Time To Breathe: SPX, Nasdaq, GS, MA, V, AIG, C, FNM, FRE, AAPL, BIDU, ITMN, FACT, CSCO

HappyTrading — Wed, 10 Mar 2010 00:38:00 GMT

This weekend, in my Market Forecast, I said, "...the market has gone quite far, so it may need a breather through the mid-week." This is what the market is doing right now, basically trading sideways. Still, there are pockets of new breakouts. Financials continued to be strong with GS briefly topping over $172 per share, before seeing profit-taking. MA and V have broken out during the past 3 trading sessions, with MA gaining about $20 since Friday open.

A report that the government would sell its stake in Citigroup (C) inspired a rally in the "bailed out" financial companies. C added +7.3%; AIG jumped +12.61%; FNM and FRE were up +5.94% and +7.56% respectively.

Elsewhere, AAPL has been making new all-time highs, trading as high as $225 per share today. BIDU continues to roar, pushing above $544 per share today before settling back to $539.1 for the close.

Biotechs are still hot! ITMN was halted today as investors await for the recommendation on ITMN's lung drug from the FDA panel. After the market, ITMN opened above $38 (from yesterday's close of $23.3) with a favorable FDA panel vote. FACT jumped more than +67% as ABT agreed to buy it for $27/share!

The Dow was up +11.86 points; SPX added +1.95 points; Nasdaq gained +8.47 points:

Most sectors were little changed. Commodity sectors were slightly in the red. Techs outpaced the broader market.

SPX

SPX added +1.95 points to close at 1140.45. It touched just above 1145 today. Its daily MAs and MACD went up.

Nasdaq

Nasdaq gained +8.47 points to close at 2340.68. It went above 2360 today. Its daily MAs and MACD were also higher.

Nasdaq is already at a new yearly high and has gone up more than 200 points since its recent low in early February. SPX is still struggling a bit to break above 1150. This rally seems a bit overheated right now and needs to take time to let off some steam. Even with CSCO's unveiling of a new, super fast routing system, the market was unable to push too much higher. Internet sector did make some gains. CSCO's new CRS-3 routing system has more than 12 times the traffic capacity of the nearest competing system, boasting "up to 322 Terabits per second, which enables the entire printed collection of the Library of Congress to be downloaded in just over one second; every man, woman and child in China to make a video call, simultaneously; and every motion picture ever created to be streamed in less than four minutes." CSCO shares ended flat today. With a +5% gain in the past 2 trading sessions, the market had already accounted for the faster product.

So, for now, the market treads water. Tomorrow, we'll get the latest crude inventory data. Energy stocks have been lagging, part of the reason why SPX is not rising as fast. On Thursday, we'll see the latest jobless claims. If the jobless claims continue to fall, I think we'll see the market rally up to test SPX 1150.

Good night and HappyTrading! ™

Marking Time in Space

Bagger Vance — Tue, 09 Mar 2010 05:12:00 GMT

Sittin' back!

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Markets really didn't do much on Monday, and frankly that's expected from the low VIX, which is pushing down toward 17%. Some tech names really did well and financial participated in the muted rally. Last Friday's move after the jobs report really caught many by surprise but if you were positioned correctly you made out like bandits. Today's volume was rather shallow and breadth was weak but so was volume. The dollar has been showing strength of late but that has been of no consequence. Gold pulled in quite a bit today but may be in great position for a nice move higher soon.

The chart below is an hourly on the SPX, and you can see where we might come in for a rest (gaps to fill). I wouldn't think there would be too much damage, though.

Good luck this week, we have some baggers working and are looking forward to locking down some serious profits, and putting out some new winners.

Hit 'em straight!

Bagger

Weekly Roundup - 03.07

Bagger Vance — Mon, 08 Mar 2010 13:58:00 GMT

Great trading week for us! You can get these results with me...if you're not getting the alerts, sign up with the third party alerts link at the bottom of the page, or right here. https://www.myhappytrading.com/Subscribe/Bagger+Vance.aspx

07:41 | Bagger Vance JOSB ($47.60) Sold to Close QZS 041710 45 C Apr 45 calls, at $3.80 +58%
06:33 | Bagger Vance GOOG ($561.00) Sold to Close GOP 03202010 560 C Mar 560 calls, at $8.70 +40%
March 04, 2010
09:59 | Bagger Vance GS ($162.78) Sold to Close GPY 04172010 170 C Apr 170 calls, at $3.35 +49%

March 02, 2010
06:52 | Bagger Vance MON ($72.67) Sold to Close MON041410 75 C Apr 75 calls, at $1.80 +71%

March 01, 2010
09:55 | Bagger Vance AMZN ($122.50) Sold to Close QZN 03202010 120 C Mar 120 calls, at $4.90 +68%

06:36 | Bagger Vance SNDK ($30.80) Sold to Close SWF 032010 29 C Mar 29 calls, at $2.30 +67%
06:34 | Bagger Vance SNDK ($30.80) Sold to Close SWF0320201029C Mar 29 calls, at $2.40 +74%

A very strong week for the markets with unmitigated strength across sectors. Financials finally chimed in with a strong RS performance on Thurs/Fri. The jobs report was taken as a lark and buoyed prices to get through resistance levels not seen since January. Next stop is likely the Jan high of 1150 on SPX. The Russell 2K advanced for the 16th time in 18 days, a stunning run. News about retail goodness also moved stocks higher this week, perhaps the consumer is not dead yet. However, housing sales did slump. Gold still looks very shiny while bonds took the hit with strong equity markets.

Look for continued strength this week with the VIX down in the mid teens perhaps. Not much fear right now of a drop in the markets.

Hit 'em straight!

Bagger

Weekly Wrap + Market Forecast + Sector Watch: SPX, Nasdaq, XLF, GLD, USO, XME, MEE, BTU, WLT, CNX, ACI, PCX, AKS, GS, BAC

HappyTrading — Mon, 08 Mar 2010 05:32:00 GMT

Last weekend, in my Market Forecast, I wrote:

"For the new week, the market certainly has room to rise. But, it'll have to break above SPX 1120 to go higher. The market is very "emotional" right now, and, the weekly jobless claims reports seem to keep the market on its toes. (What they really should do is to change the jobless claims reports to at least bi-weekly. A bi-weekly average may actually be more accurate and get rid of some "noises" in the numbers. Further, it may help to calm the nerves of the financials markets.) The dollar has risen quite far since its recent low in early December. It is starting to waver at a 7-month high. If the dollar pulls back, commodity sectors should bounce a bit more. Both oil and gold seem to be ready to go higher. We may see a strong opening for the week; but, if SPX 1120 cannot be broken, we are still range-bound. Techs look stronger than the broader market and should do well in a bullish environment."

In the Sector Watch, I also added,

"...XLF showed a lot of strength. The $15 level is the next resistance. Breaking above $15 would be quite a feat."

The market did indeed open the week on a strong note on M&A deals. For the next three days, the market traded in a tight range, with various sectors taking turns to keep the market's altitude. On Tuesday, miners rallied as gold pushed higher, along with more acquisition news in the fertilizer producers. On Wednesday, the market continued to struggle with SPX 1120. However, techs kept the Nasdaq in the green. On Thursday, the market managed to close above SPX 1120 just ahead of the jobs report. Wouldn't you know it, on Friday, the jobs report came in "less badly" than many economists had expected. Since SPX was already above 1120, the whole market rallied higher! Financials really had a strong week and helped carry to market. XLF closed above $15. Techs kept its pace ahead of the broader market, with Nasdaq gaining back all of its recent loss in January and February.

We also had a decent week, with 100% of the the closed trades in the green:
March 04, 2010
09:32 | HappyTrading GS ($162.70) Sold to Close 03C160 Mar 160 calls, at $5.00 +11%
06:53 | HappyTrading GOOG ($551.20) Sold to Close 03C550 Mar 550 calls, at $9.00 +43%

March 03, 2010
07:56 | HappyTrading HGSI ($31.25) Sold to Close 04C29 Apr 29 calls, at $3.30 +50%

March 02, 2010
07:22 | HappyTrading HGSI ($30.70) Sold to Close 04C29 Apr 29 calls, at $3.00 +36%

March 01, 2010
12:41 | HappyTrading GOLD ($74.20) Sold to Close 03C70 Mar 70 calls, at $5.11 +31%
12:13 | HappyTrading AMZN ($124.05) Sold to Close 03C120 Mar 120 calls, at $6.15 +32%
09:48 | HappyTrading AMZN ($122.20) Sold to Close 03C120 Mar 120 calls, at $4.75 +2%
07:26 | HappyTrading GLD ($109.30) Sold to Close 03C108 Mar 108 calls, at $2.65 +28%

For the week, the Dow was up +240.94 points; SPX added +34.21 points; Nasdaq gained +88.09. Both gold and oil went higher. This evening, at the time of this writing, Asian markets were following the US higher. Let's see how the US market looks after Friday's close:

SPX

SPX added +15.73 points to close at 1138.70. It closed above the 1130 level. Its daily MAs and MACD went higher.

Nasdaq

Nasdaq gained +34.04 points to close at 2326.35, above the 2300 level. Its daily MAs and MACD were up.

SPX finally went back above the 1120 level. VIX closed below 18. Nasdaq did even better, achieving a new closing high for 2010! For the new week...

To read the rest of this article, please subscribe to HappyTrading "Premium Articles" by going to the Premium Services (click here) page. If you are already a subscriber, please click here: Market Forecast 3/8/10.

Weekly Wrap + Market Forecast + Sector Watch: SPX, Nasdaq, XLF, GLD, USO, XME

HappyTrading — Mon, 08 Mar 2010 03:31:00 GMT

Last weekend, in my Market Forecast, I wrote:

In the Sector Watch, I also added,

"...XLF showed a lot of strength. The $15 level is the next resistance. Breaking above $15 would be quite a feat."

SPX

SPX added +15.73 points to close at 1138.70. It closed above the 1130 level. Its daily MAs and MACD went higher.

Nasdaq

Nasdaq gained +34.04 points to close at 2326.35, above the 2300 level. Its daily MAs and MACD were up.

SPX finally went back above the 1120 level. VIX closed below 18. Nasdaq did even better, achieving a new closing high for 2010! For the new week, both SPX and Nasdaq are showing a new bullish formation in their respective daily MAs. Nasdaq is basically at the resistance set back in January, 2325. SPX's next resistance is at 1150. Above these resistance level, the market could break out to a new leg higher. We many see a Monday follow-through rally for the US market. But, the market has gone quite far, so it may need a breather through the mid-week. If the market can hold its altitude while letting off some steam, we could see the market push higher by the end of the week. Again, techs should be strong in a bullish environment. Financials and miners will be very important to watch. The financial sector is on the verge of breaking out and could help determine whether the broader market itself can push higher. The coal stocks have been very strong and are giving the whole mining sector a bullish tone.

Sector Watch

XLF (financials)

We discussed the $15 level last week, and XLF was able to close above. It is now showing a new bullish formation. $15.4 level is the next resistance, above which we could really see the bank stocks run! GS is still the leading indicator. But, many mid-size regional banks could become takeover targets. We'll start watching for M&A activities in this sector. Also, if the financials sector takes off, BAC should have a lot of distance to cover.

GLD (gold)

Last week, I said that GLD was on its way to test $112. It did. However, it could not break through just yet. With better economic data, gold price pulled back a bit. GLD is now showing a new bullish formation. It looks like GLD could take some stutter steps and trade sideways for a bit. But, once it breaks above $112, it is off to the races!

USO (oil)

USO showed some strength last week. It tested its 10-day MA and held the support. Now, it's on its way back up again. $41 level is the next resistance. Breaking above $41 could easily bring it to $50. We should start watching the oil service stocks also. RIG, DO, SLB, and NOV have all come down quite a bit.

XME (metals and mining)

XME broke and closed above $56 last week. The daily chart is really strong with a newly formed bullish phase. Coals and steels are pushing this sector higher. M&A rumors are starting to surface in this sector. AKS has already been rumored to be a takeover target. Reports that a Japanese steel maker is willing to pay higher prices for coking coals are driving the coal stocks higher. MEE, BTU, WLT, CNX, ACI, PCX have all been very strong.

Good night and HappyTrading! ™

Hitting on All Cylinders

Bagger Vance — Fri, 05 Mar 2010 12:19:00 GMT

We've been locking in nice winners this week as our tree continue to bear fruit. We're in some new names, but for those who missed: (fyi, you can sign up and get the email alerts via the 3rd party page, which is here.. and you won't miss out!! https://www.myhappytrading.com/Subscribe/Bagger+Vance.aspx)

March 04, 2010

09:59 | Bagger Vance GS ($162.78) Sold to Close GPY 04172010 170 C Apr 170 calls, at $3.35 +49%

March 02, 2010

06:52 | Bagger Vance MON ($72.67) Sold to Close MON041410 75 C Apr 75 calls, at $1.80 +71%

March 01, 2010

09:55 | Bagger Vance AMZN ($122.50) Sold to Close QZN 03202010 120 C Mar 120 calls, at $4.90 +68%
06:36 | Bagger Vance SNDK ($30.80) Sold to Close SWF 032010 29 C Mar 29 calls, at $2.30 +67%
06:34 | Bagger Vance SNDK ($30.80) Sold to Close SWF0320201029C Mar 29 calls, at $2.40 +74%

I'll have a recap tonite and will talk about the week ahead later tonite.

Bagger

Better Economic Data Inspire The Market: SPX, Nasdaq, GS, GOOG, AMZN, ANF, DNDN, TIVO, PETM, HIG

HappyTrading — Fri, 05 Mar 2010 03:51:00 GMT

This morning, better retail sales numbers got the market in a cheerful mood. In addition, jobless claims were less than expected. Financials rallied, led by GS, which added +5.89, or +3.73%. Techs were also strong, led by GOOG and AMZN. After being "dormant" for the past 2 months, GOOG and AMZN had awakened in the past few days. GOOG gained more than $30, about +6%, in the past 4 trading sessions, while AMZN managed to go up more than $10, about +8.5%, in the same period.

On Monday, we booked some profits on AMZN. This morning we cashed out an overnight win on a GOOG trade:
March 04, 2010
06:53 | HappyTrading GOOG ($551.20) Sold to Close 03C550 Mar 550 calls, at $9.00 +43%

These GOOG Mar 550 calls went as high as $12 and closed at $11.

This morning, ANF reported a +5% in its sales. Its shares went up +14.57%! Last night, DNDN reported positive study results on its drug Provenge. DNDN added +3.66%. PETM shares reached a new 52-week high today, up +8.01%, after delivering strong 2010 guidance. TIVO soared a whopping +61.9% after winning a court ruling aginst Dish Network (DISH). HIG continued to go higher, up +3.9%, as investors speculate a potential buyout.

The Dow was up +47.38 points; SPX added +1122.97 points; Nasdaq gained +2292.31 points:

INX2 (internet) led the market with a +1.49% win. XLF (financials) garnered +1.01%. Commodity sectors were mostly in the red, as the dollar rose on better economic data. GLD (gold) and SLV (silver) both slid. USO (oil) and UNG (natural gas) were also down, with UNG losing 3.7% on higher-than-expected supplies. FXI (Chinese ADRs) slipped 1.52%.

SPX

SPX added +4.18 points to close at 1122.97, above the 1120 level. Its 10-day and 20-day MAs went up. Its MACD was higher.

Nasdaq

Nasdaq gained +11.63 points to close at 2292.31. Its 20-day MA went above the 30-day MA. The MACD glided up.

The market has been surprisingly strong ahead of the unemployment report tomorrow. SPX finally closed above the 1120 level. Nasdaq is showing a new bullish formation its daily MAs. Commodity sectors were weak today, seeing some profit-taking after the recent rise. As mentioned above, techs and financials were stronger. Most market analysts are expecting a weak jobs report tomorrow. If the report indeed comes in weak, we might see the market range-bound in some volatile trading. The dollar would be likely under pressure, but, the commodity sectors may benefit. If the report is inline or strong, the market should get a morning pop, especially in the financials and techs. Tomorrow is Friday, if the market does pop in the morning, we should see some profit-taking in the afternoon.

Good night and HappyTrading! ™

Markets Churn, Burn and Wait

Bagger Vance — Thu, 04 Mar 2010 12:54:00 GMT

Yesterday's action was indicative by some underlying strength early, but stalled late and barely closed even. The ISM number came in a bit better than expected, the ADP jobs report was rather mixed. Volume once again came in on the light side but breadth and sentiment continue to trump all other indicators. After Monday's surge prices on the indices have slowed down, perhaps a rest before the next move. We're at the top of a range now and have been having trouble with the area just above here. The Russell 2K has been the strongest of them all, up some 15/16 days now. I would say markets are due for a pullback or rest, and while the last drop was quick and steep (we were at 1086 in SPX just a week ago), look for signs of distribution upcoming. That doesn't mean you need to get bearish, rather just be defensive and cautious.

The jobs report is out Friday and the market is sanguine about the report.

Hit 'em straight!

Bagger

Miners Keep The Market Up! SPX, Nasdaq, WLT, CNX, MEE, ACI, CF, POT, MOS, AGU, TRA, MDVN

HappyTrading — Wed, 03 Mar 2010 05:21:00 GMT

The market started out strong today. Although it gave back some gains in the afternoon, it managed to close in the green. Gold rallied today to above $1130/ounce. Miners led the market. Besides the gold miners, coal stocks were also very strong. WLT made a new 52-week high, closing at $84.53 and traded above $85/share. CNX, MEE, and ACI were among the top gainers, up +2.96%, +4.09%, and +2.69%, respectively.

This morning, CF made a new offer for TNA at a new $4.74 billion price! TRA shares jumped +10.85%! CF traded as low as $101.33, but bounced back to close at $106.42, only down 1%. It looks like investors are expecting AGU to raise its offer for CF! AGU closed at $66.81, up $0.98. POT and MOS continued to benefit from the "AGU/CF/TRA love-triangle", adding +2.21% and +3.43%, respectively.

The Dow was up +2.19 points; SPX added +2.60 points; Nadsaq gained +7.22 points:

XME (metals and mining) led the market with a +2.67% rise. GDX (gold miners) added +1.95%. OIH (oil services) bounced +1.43%. Both GLD (gold) and SLV (silver) went up. BTK (biotech) contined to make new highs, up +2.18%. MOO (agriculture) rose +0.75%. FXI (Chinese ADRs) was up slightly.

SPX

SPX added +2.6 points to close at 118.31, just below the 1120 level. 10-day and 20-day MAs continued to go higher. MACD went up as well.

Nasdaq

Nasdaq gained +7.22 points to close at 2280.79. Its 30-day MA flattened. Its MACD was higher.

As discussed this weekend, the market opened the week with strength, thus far. In addition, SPX tested 1120 today. However, it was not able to close above it. Financials finally participated today with GS coming near the $160 mark. Commodity sectors continued to keep the market up, as the dollar wavered. Tech stocks will draw buyers in as long as the overall market is strong. But, so far, techs have not completely taken over the leadership role. The market has rallied for 4 days on this leg and may need to take a breather before the new jobs data on Thursday and Friday.

As an additional note, biotechs just keep pushing higher with BTK (biotech index) making consecutive, new all-time highs. MDVN announced a teleconference and webcast at 8:30 a.m. tomorrow morning to discuss new trial results on its Alzheimer's Disease drug. This should be interesting. MDVN has already jumped from $36 to $40 in the past 2 days. The premiums on the options are incredible as investors price in the possibility of MDVN going above $70/share before the month ends!

Good night and HappyTrading! ™

Market Makes Gains On Merger Deals: AIG, MIL, OSIP, INCY, MDVN, BIIB, ONXX, BMRN, HGSI, NFLX, BIDU, ISRG, PCLN, GLD, GOLD, AMZN

HappyTrading — Tue, 02 Mar 2010 04:44:00 GMT

The market was very strong today, inspired by a few merger/acquisition deals. This weekend, news reported that AIG was making a deal to sell its Asia-based life insurer AIA Group. AIG was up +4.08% today. This afternoon, it was confirmed that the British insurer Prudential PLC will acquire AIG's Asian unit for $35 billion. In addition, Germany's Merck agreed to buy Millipore Corp. (MIL) in an all-cash $6 billion deal. MIL had already jumped last week on rumors that Thermo Fisher Scientific Inc. (TMO) was to be the buyer. MIL shares moved from $70 to $95 last week. Today, it hopped another $11% to close at $104.90.

This morning, OSIP confirmed an unsolicited bid by Japan's Astellas Pharma for $3.5 billion. OSIP shares soard +52%!! We have been discussing OSIP's trading actions for over a week (see Sector Watch). Last night, I mentioned again that OSIP and some other biotech stocks were "brewing their breakout setups." Apparently, some people already knew about the potential deal and the charts showed it.

With MIL and OSIP share prices flying high, biotechs led the market as investors scramble to find the next buyout targets. Among the top gainers were: INCY +7.88%, MDVN +6.28%, BIIB +3.22%, HGSI +5.93%, ONXX +6.95%, BMRN +3.35%.

Besides the biotechs, stocks in other sectors were making new all-time highs or new 52-week highs as well. BIDU recorded a new all-time at $523.25, after trading slightly red in the morning. NFLX hopped +5.53% to close at $69.7 with a new all-time high at $69.75. ISRG came close to its all-time to close at $358.63, up $11.49 or +3.31%, a new 52-week high. PCLN also broke higher, up $11.83, or +5.22%, at $238.54, a new 52-week high.

After 2 months of weakness, AMZN finally bounced today, up $6.14, or +5.19%. A report on a new silicon for the chips inside of e-book readers, which may lower the cost for AMZN's Kindle, may have attributed to the buying. We locked the gains on our AMZN trade:

March 01, 2010
12:13 | HappyTrading AMZN ($124.05) Sold to Close 03C120 Mar 120 calls, at $6.15 +32%

The dollar was very strong this morning. We exited our trade on GLD for a decent gain:
07:26 | HappyTrading GLD ($109.30) Sold to Close 03C108 Mar 108 calls, at $2.65 +28%

When the dollar slid later in the day, miners started to rally. Because GLD has not been seeing a lot of momentum, I opted to go with the gold miners, choosing GOLD. We locked an intraday +31% gain on the trade in about 4 hours; and, we got the day high:

March 01, 2010
12:41 | HappyTrading GOLD ($74.20) Sold to Close 03C70 Mar 70 calls, at $5.11 +31%
08:39 | HappyTrading GOLD ($72.80) Bought to Open 03C70 Mar 70 calls, at $3.90

The market behaved as forecasted in my Market Forecast article last night, so, we'll look at the charts another day. Be a little more careful tomorrow as a lot of stocks are getting toppy. In addition, the Senate may be closing in on a deal on Wall Street regulations. So, pay attention to the financials. If the market comes down with momentum, the "high-flyers" mentioned above should see some profit-taking!

Good night and HappyTrading! ™

Market Forecast + Sector Watch: SPX, Nasdaq, UUP, GLD, XLF, BTK, AIG, AET, UNH, SLXP, NUVA, CELG, AMGN, OSIP, GENZ, PRU

HappyTrading — Mon, 01 Mar 2010 04:36:00 GMT

Last weekend, in my Market Forecast, I said,

"For the new week, as mentioned last weekend, SPX 1120 will be the nearest resistance. The market has rallied quite far. Unless, there are really positive news to help push the market higher, SPX 1130 could be a tough resistance beyond the 1120. So, if SPX 1130 cannot be broken, we might see the market trading sideways for a few days. In the past couple of weeks, we have seen the commodity sectors lead the market higher. The tech stocks will be strong if the market is strong; but, so far, they have not been leading the "attack". If the financials can regain strength and become the leading sector, the market could push above SPX 1130. Another sector to watch is the biotechs."

Indeed, the market traded sideways, and the stronger sectors were the financials and the biotechs. The market started the week trading flat. On Tuesday, the unexpected drop in consumer confidence shook the market, which put the market on a more defensive mode. On Wednesday, the market managed a modest bounce. On Thursday, the market was hit by worse-than-expected economic news once again; this time, the jobless claims. The market was weak at the open, but, spent the rest of the day climbing higher. On Friday, the market was flat once again, although staying in the green. The weaker economic news did not give the market a chance to test SPX 1120. It did, however, managed to stay above SPX 1100, and thus, keeping the market in a tight range.

For the week, the Dow was down 77.09 points; SPX slid 4.68 points; Nasdaq slipped 5.61 points. Oil made some gains and gold was basically flat. The dollar pulled back a little. On Sunday evening, at the time of this writing, Asian market were mostly higher. Oil was slightly higher and gold was flat. Let's see how the US market looks after Friday's close:

SPX

On Friday, SPX added +1.55 points to close at 1104.49. It closed above the 1100 level. The 10-day MA rose above the 30-day MA. Its MACD went higher.

Nasdaq

Nasdaq gained +4.04 points to close at 2238.26. It closed above its daily MAs. The MACD continued to rise.

Both SPX and Nasdaq are showing similar pictures. They both closed above their respective daily MAs; their 10-day MAs have risen above the 30-day MAs; and, their 20-day MAs have turned up. VIX dropped back down to below 20. For the new week...