Again, “What a difference a day makes!!” With more bad news from the financial and housing sectors, the market went down “huge” today, reversing yesterday’s “big” gains, and more! The Dow was down 387 points; SPX was down 44; and, Nasdaq was lower by 56 points!
As you can see, most sectors were down. VIX jumped again, and went almost to 27 at one point!!
This is what happens when a nervous market gets bad news! Interestingly though, Nasdaq went green mid morning, perhaps still helped by CSCO’s good earnings from yesterday. SOX held up well, closing above 500.
The major indices are once again back in their support ranges. Yesterday, I said, “I’m looking at some near-term “resistance” levels. Since SPX did go above 1500, I’m seeing 1500-1520. This is the range that I’ll be looking for SPX to go above to feel more comfortably that the market has completed a healthy correction.” I also thought that the market could go a little higher before re-testing the bottom. But, with the BNP freezing funds news coming out of Europe overnight, the U.S. market didn’t have a chance. In any case, it looks like we are re-testing the support ranges again!
SPX
SPX closed at 1453.09, back within its support range of 1440-1460. We’ll have to see if this support range can hold and allow the market to create a double-bottom.
As expected, Asia is mostly down right now. Hong Kong is down over 600 points; Japan is down over 400; and, China is down over 100 points! Central banks in Asia are injecting extra cash into banking systems in a bid to calm the money markets. It will be interesting to see in the morning if the Asian markets can hold their support levels and create a double-bottom.
Until we know where the market is going to go, the safest thing to do is perhaps still to hold cash. A few shining stars did shine through on this gloomy day. An article highlighted some “clean tech” stocks yesterday, and three stocks jumped out to defy gravity today. ZOLT flew almost +11% today to clinch a new 52-week high of 51.77! AMSC jumped more than +5% and also make a new 52-week high at 27.59. SPWR added another +1.84% on top of yesterday’s +13% gain, with a new “all-time” with at 81.27! I am “happy” to say that we were in SPWR since yesterday and cashed the rest of the position out with a +76% gain!
We also played a quick trade on GS puts:
GS Aug 180 puts, GPYTP, at $4.5, +12.5%
GS Aug 180 puts, GPYTP, at $4.8, +20%
(see Happy Trades!! for more details)
Good night and HappyTrading! ™
