Wang’s Happy Trading

Last weekend, in my Market Forecast, I said,
“For the new week, I will be watching the above mentioned resistance levels (SPX 1425; Nasdaq 2500). It’ll also be interesting to see how VIX handles the support at $18. The overall market still looks strong with room to go up on the daily charts. If the market breaks through the resistance levels and VIX goes below $18, the market could get another strong week. XLF (financials) has caught its daily upper BB with the big rally on Thursday. This could be a further bullish sign for the market. I will also be watching how commodities play against the techs. Some commodity related sectors are threatening to make a comeback already, although some money did seem to be rolling into techs last week. Will the leadership continue to shift towards tech? Let’s take a look at where some of these sectors stand.”

The broader market ended down this week and could not break through those resistance levels just yet. The techs held on well. The two sectors that I talked about last weekend, namely XME (metals and mining) and OIH (oil services), were very strong. Steel stocks made new all-time highs. Coal stocks broke out. Some of the oil service stocks broke out as well, such as NOV. Some oil plays made good gains (for example HES, in which we made a bagger trade this week), as crude made all-time highs. Gold seemed to be drawing a bottom and found buyers coming back in.

On Monday, commodity-related sectors jumped while techs saw profit-taking. On Tuesday, the market was healthy and had its highest close since early January, led by energy stocks, waking up solar plays. On Wednesday, the market took its time to led off some steam, while many blame the high crude oil price. On Thursday, the crude went higher and the market was up as well. On Friday, the broader market was down but things held up well; the crude went even higher. (If you missed my article on Wednesday about trying the “reason” with the market, or rationalize its actions, you might want to take a look.)

We had another pretty good week:
NOV ($76.8)
NOVFN, June 70 calls, at $9, +34.3% (all out)

NOV ($75.5)
NOVFN, June 70 calls, at $8.2, +22.3% (partially out)

RIG ($160.5)
RIGEL, May $160 calls, at $, 4.5, +21.6% (all out)

FSLR ($277)
HJQEV, May 290 calls, at $6, -44% (partially out)

FSLR ($281.7)
HJQEV, May 290 calls, at $7.2, -33% (all out)

FCX ($117.2)
FCXEC, May 115 calls, at $5, +5.2% (all out)

HES
IGGEU, May 105 calls, at $10, +96% (partially out)

HES
IGGEU, May 105 calls, at $11, +115.6% (all out)

IBM ($123.5)
IBMED, May 123 calls, at $2.5, -39% (all out)

FCX ($118.5)
FCXEC, May 115 calls, at $6.1, +28.4% (partially out)

RIG ($157)
RIGEL, May $160 calls, at $3.8, +2.7% (partially out)

The trades left open were:
AEM ($65.8)
AEMFM, June 65 calls, at $5 (open)
Friday close: $5.2; unrealized gain/loss: +4%

CSIG ($31)
GQAFF, June 30 calls, at $4 (open)
Friday close: $5.3; unrealized gain/loss: +32.5%

Hope you’re enjoying your weenkend! Happy Saturday! I’ll be back tomorrow with my weekly Market Forecast.

Goodnight and HappyTrading! ™