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Tuesday, March 19, 2024

Hump Day

Today is the day to see if we can climb back over our barriers and get back above resistance. If we do, we establish a pretty solid floor that we can bounce higher off, if we don’t, expect a big correction to start next week!

We are looking for Nasdaq to stay above 2,300, S&P to retake 1,300 and, most important, the Dow to get back over 11,300. The Dow will have a very tough go of it with the GM problems (subpoena’d today) and a UBS downgrade of CAT while MCD is falling off a cliff and no one is excited about AIG or IBM or GE or VZ or C or… well, you get the idea!

So I would take any positive Dow movement to be a great and confusing sign. We are now so far behind the Nikkei I’m thinking of moving to Japan as that market gained 280 pts today to bring it right under the 17,000 mark which it should shatter handily, they just ran out of time today!
http://finance.yahoo.com/q/bc?s=%5EN225&t=1d

They used to track quite closely (we sell to the same people, have similar economies) but since September the Nikkei has left us 30% behind, that’s 4,000 pts!
http://finance.yahoo.com/q/bc?s=%5EN225&t=2y&l=on&z=m&q=l&c=%5EDJI

Europe is up today, possibly on the strength of the dollar which now assumes at least 2 more rate hikes and again I find this amazing with France shut down and rioting in the streets.

The oil con will likely continue through Monday unless inventories are much higher than expected but THEY have done a brillian job of getting the oil stocks over the January 1 levels which is all that counts when you book the quarter. If oil stocks stay up today, we will look to enter some serious puts on Friday afternoon. I’m not going to be a hero and will set very tight stops on my current puts on what could be a very up and down day in the sector.

Today, if you can believe it, they are blaming a refinery outage in the Virgin Islands for today’s prices! I didn’t even know they got a turn. The only reason for this must be that there is some progress in Nigeria and THEY had to scramble to come up with something new to worry about…

I can’t believe I’m actually sitting here rooting for the Google pre-market manipulators who currently have it up at $378.40 (7am). Remember that Stifel analyst who I said was brainwashed by Google? Well now he’s trying just a little too hard to justify his new position but it makes for an interesting read:
http://internetstockblog.com/article/8298

Here’s a good WSJ analysis of the Fed decision:
http://online.wsj.com/documents/info-fedparse0603.html

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I’m not trading today as I have meetings but don’t forget that this is a very dangerous week to trade as fund balancing can wipe out any position in seconds so really don’t make major commitments even if you think you’re positive because you may run into a guy who has a very different agenda to yours and Billions of dollars to put up against you!

I was mentioned AMTD on the 24th but not for a trade as I wanted it to come in. After touchng 19 yesterday they just came out with raised guidance that shot them back to $20 in the overnights but that is still .50 lower than Friday and well under their 3/4 high of $23. I like the $20s for a day trade but not if they go over $1.10 or a .30 premium.

EBAY has a big Supreme Court case today that will impact so many companies I wish I had researched it because you will see a lot of gains and losses based on the decision. Ebay has already traded down 25% this year so I like the May $40s for $1.70 covered with the Apr $37.50s for .90.

Why did I ever sell LNUX? (kick, kick)
http://stockcharts.com/gallery/?lnux

Here’s a fun play: Remember BIDU? Someone is bound to notice them again if Google keeps flying up and they’ve traded all the way down to $51 at a mere p/e of 276 (not a typo). Analysts are 100% sour on it to the point where 30% growth will give them a beat (was 100% last year). The only bad thing is you have to go way out to catch earnings so I like the Sept $50s for $7.60 and sell the $55s for $1.30 while we wait to start recouping the premium.

Don’t forget YHOO where the May $32.50s are $1.70 and allow for a correction. 200 dma is $35.50 and may be a good sell point.

BVN May $25s are a good gamble on gold for $1.

The UBS analyst who follows CAT is a very good one and he has been right pretty much all the time so his downgrade carries a lot of weight as it is a big reversal and probably was not taken lightly. CAT is a very slow mover but it is already down $1.50 from yesterday’s high. The $72.50 puts were .90 yesterday and may make a nice momentum play but I would hope for a rebound to buy it otherwise don’t bother.

Have fun!

– Phil

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