Now that was a little more like it!
It’s amazing how fast money moves these days…
Oil is down (and looking very weak), the 10 year is down and the world markets are softening so what else is left besides US equities?
Let’s not get too excited yet, this is a very thinly traded pre-holiday market but there is an incredible amount of call buying across the markets that could be a very bullish signal.
Another indicator I like is that volatility is way down at a level that usually signals a bull.
The Nasdaq is the key to the whole thing and today was the first in quite a while that the index didn’t fade, even shrugging off yet another loss from Microsoft and MU’s poor report card.
Having stopped just shy of 2,250 I am hoping for a close above that mark tomorrow. The Nasdaq is in the toughest position, either forming a flag for a nice breakout or a head and shoulder pattern that can lead to devastating losses.
The S&P, on the other hand, had no problem popping back over 1,263 but I am now looking for 1,275 before I can feel at ease with that one.
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The ante is being upped in the global game of gold poker with a raise of $11 by the Americans today (see http://philstocks.blogspot.com/2005/11/metallica-rules.html for my original article on how this game is played). Expect this action to be met with timid buying in Dubai as they have just had half their pot wiped out in the last round.
The US should raise again tomorrow as our local boys consolidate the supply lines, giving our traders the green light to move up to a higher level. The combination of PDG and ABX (which I called right on the money on the 15th), while a detriment to both companies in the short run, ensures our picks at NEM, GG and MRB one less competitor to have to (don’t say fix prices with) worry about.
While GG and MRB have room to run no matter what – I am leery about NEM at this level and would keep tight stops in place. I felt good enough about GG’s position to take on some Jan $20s today for $1.05, looking for 20%, out with a 10% loss or a $5 drop in gold.
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Funny, funny people keep buying GM in the mornings. I’m so in the money I can laugh about it now but it does make it hard to take new puts on. One would think $18 should finally prove some kind of floor but I think more bad news is looming from Delphi.
Of course on a day like today all my calls were right so no sense in reviewing those, although I am wondering if I am the only person who connects the dots between RHAT and NOVL.
TASR (no more E) opens back up on the Nasdaq tomorrow with that silly shadow off its ticker – if you are in this, remember that $7.50 has been a tough nut to crack so place tight stops or suffer the fate of those who were greedy last time we played this. I think tomorrow will be different due to fund buying but I could be totally wrong so paranoia is the way to go here.
Fridays TOTD TGT has had a great 3 days and moved nicely over the 50 dma today. The Jan $50 is up .80 (15%) from purchase price of $4.50 but I see no reason to close this one yet. I will get out if the stock crosses back below the $54.50 level but I don’t think that will happen.
WFMI is still a grocery store but don’t tell their investors. I am officially calling a top here and drawing a line at $155! I will be taking the Jan ’07 $160 puts for $24 and selling the Jan $145 puts when they reach $4.
Although I am still in day trade mode, there are certainly a lot of attractive plays out there so I’m going to do some homework tonight and think about some more good positions for the morning.
Later,
– Phil
