Monday Mop-Up

It’s funny – just about an hour ago I was so close to setting a title of Monday Madness and was thinking of how I would say I was totally wrong to be bearish and dumbfounded by the way the markets were able to shrug off a .17 jump in 30 year rates and a $1.79 rise in oil and finish in the green. But they didn’t. I did not, however, have the conviction to short the Dow, even as it ran up to 1,420 in the morning. It came down on a big volume surge as CNBC reported that Bernanke said that he is by no means doveish on inflation. It’s not the comment per se so much as the markets’ willingness to wipe out 3 days worth of gains in 30 minutes based on almost nothing that bothers me. Still we are holding our technicals, but back to just barely where we were last week. Dramatic turnarounds came from big boys like INTC (+.15 to -.60), GE (+.10 to -20) and AAPL (+$1 to – .79). As expected the lack of movement from the SOX gave the Nasdaq no real chance which held back the markets all day. When the sell-off came, the Nasdaq was the first and hardest hit: http://finance.yahoo.com/q/bc?t=1d&s=QQQQ&l=on&z=m&q=l&c=&c=%5EGSPC&c=%5EDJI Gold held $660 but you wouldn’t know it from BVN or NEM’s performance. There is a strike threat in a mine the two share in Peru but it is not news and should not cause that kind of damage. GG (best of breed) was up 2.6% on the day and ABX up almost 2%. Oil flew back to just under $74 and oil stocks moved up a good bit which of course means the drop would have been much worse if oil hadn’t held up the Dow and S&P. It’s interesting because the threat of additional Fed tightening threw the oil sector into a tailspin as well. HOV lowered guidance over 10% and is plunging in the after market. This will not bode well for tomorrow’s open. ===================================== BVN shot up and then back down this morning which stopped me out of all my positions so I am just left with the ABX Jun $32.50s, now at .95 (up 40%). PD jumped up too fast and the $90s opened at $2.15, moved to $3.50 before pulling back to $3.10 (up 45%). HAL $80s gave us a nice reasonable open at $2.05 and finished the day on a big pullback to $2.55 (up 22%). S spent all day trying to scratch out a .6% gain, it just cannot break $30! VZ dropped with the rest in the afternoon, partially panic into earnings tomorrow. AIG had a big open and a bad finish, having the trouble I expected at $66. Now it’s resting on the 200 dma at $64.50 so direction will be very telling tomorrow. http://finance.yahoo.com/q/bc?s=AIG&t=1d In comments today we noted FDG is trading at a huge discount to BTU, which added another 6.5% today. I like the Jun $40s for .95. http://finance.yahoo.com/q/bc?t=6m&s=FDG&l=on&z=m&q=l&c=btu PLAY is officially dead as earnings were way off and projected profits are down 90% from previous estimates. Now we will see if Sony wants to buy them! ===================================== Well, last Monday was a rotten day too so we will have to see what tomorrow brings, unfortunately, last Tuesday was worse than Monday! We are back at Tuesday’s open which was Wednesday’s close and I don’t see a lot of catalysts ahead other than the fact that what Bernanke said was not news at all and should not have crashed the markets. Iran vs. the UN is on the table tomorrow so I still like my gold and maybe a play like the XOM $65s which opened today at .40, traded at .65 almost all day but closed back at .40 to give you another chance tomorrow.