Tuesdays are not so good for the market!
Even now, DNA just announced a beat with up guidance and the initial reaction is down! This is a sign of a market that just doesn’t want to hear anything nice and another sign that I should trade in the after hours because anyone who doesn’t want this stock is crazy…
If that was a test we failed but the markets will give us one chance for a make-up exam tomorrow before confirming a downtrend. We’ve slipped right below all resistance except Nasdaq 2,300 but another day like today and that will be a distant memory.
Hardly anything worked today but MCD had another up day as did GLW and, of course SHLD.
What really stunned me was the drop in commodity stocks even as the commodities themselves held record levels. Gold dropped slightly to $598 but copper is still at $270 yet here is PD’s chart:
http://finance.yahoo.com/q/bc?s=PD&t=5d
You would think that Alcoa’s earnings would give PD traders a clue as to what might happen….
All in all a truly awful day that makes me love my cash just soooo much!
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We should have just watched AA as it traded down all day long, indicating the market was in no mood to reward even the strongest of companies.
GOOG shrugged off its upgrade after bolting to $417 it dropped the rest of the day to finish at $409. Although still up $3 for the week, that’s not going to get you to $500 by mid-May! The May $500s held their value at $2.25 but the bids dropped to $2.10. It’s very hard to keep perspective when you track a huge stock like this daily but the daily chart remains strong and the weekly chart is very strong on this one:
http://stockcharts.com/gallery/?goog
RIMM had a truly sad day and the $75 puts finished at $1.10 (up 60%).
I really like the WAG May $45s now for .40 (down 30%) but I’d rather buy them for .45 on the way up than guess.
DIS recovered at the bell (if you didn’t take the double like you should have!) and is well up from Monday with the $27.50s finishing at .55 (up 40%).
SLB lost another 3% today! I took the money and ran on the $62.50 puts!
We were too aggressive with our buy target on GM as the $20 puts never got below .95 but did finish at $1.35 which would have been a great day trade!
MRK $35s opened at .35, ran up to .60 by 10:15 and ended the day at .10! The $32.50s opened at .15 and finished at .10 but that looks like the right direction for the stock now.
BEAV held up today as BA went way down then back up. The May $25s finished at $1.80 (up 15%).
TIE went down all day and the May $55s dropped to $1.80 (down 25%).
AIR held up nicely and the May $25s held their value at $2.90.
DNA had a wild ride today with the $85 puts going as low as .70 before finishing at $1.15 (up 40%). In a situation like that you should really take the money as 40% in the hand before earnings is the very definition of better safe than sorry! On the other hand I will be very surprised if people are so insane as to actually let this slide after that great report.
Vic pointed out in comments that with a good DNA report we should check in on CELG (4/24) and I would like to add GENZ (4/19) as well which is somehow at $63!
EBAY (4/19) refused to go down and the May $40s finished at $1.20 (up 10%).
TOTD DHI looked hopeless but recovered at the end and the calls ended flat.
I am baffled that ABX (and all gold stocks) dropped 3% today but the May $30s are looking attractive at .80.
The gold chart in general looks stronger than Google’s so any long play on gold has a great risk/reward right now:
http://stockcharts.com/gallery/?%24gold
GG (5/15) (is in a sweet spot if you want to gamble on a quick recovery as the $30s are .60 (down 50% today!) trading lower than when gold was $10 cheaper last week! This company sells over 250K ounces of gold a quarter, last quarter gold was under $500, averaging about $475 and the company made $88M. This quarter gold averaged $550 per ounce so the sold the same gold on the same trucks with the same phone ets. for $18M more yet analyst estimates are for them to make 10% less than last quarter! They will be attending a Precious Metals Forum on Thursday so I like the June $32.50s for $1.55 before then.
My original instincts that UNH was a falling knife was correct! I am dying to buy this stock but it just keeps going down every day…
MDT is so disgusted with their stock price they are buying back $2.5Bn of it (5%). That should be enough to stop the 20% slide they’ve been on since the year began.
