Wang’s Happy Trading

The overall market was pretty flat all day. While techs and financials were down, commodity sectors were up. The oil services sector (OIH) was very strong and finally broke out! This weekend, in my Market Forecast, I said of OIH,

“…I think sooner or later this sector will break out. RIG, DO, SLB, and NOV are among the favorites.”

And, here it is! NOV received an upgrade this morning and made an new all-time high at $92 today. We jumped in early in the morning with this trade:
HappyTrading
Posted June 23, 2008 at 6:46 am | Permalink (Edit)
NOV ($87)
NOVGQ, July 85 calls, bought at $5.5

Within an hour, NOV went up another $2. I cashed out with a +23.6% gain:
HappyTrading
Posted June 23, 2008 at 7:34 am | Permalink (Edit)
NOV ($88.9)
NOVGQ, out at $6.8 (for now, jumped up fast, likely early; will look for re-entrance on pullbacks)

But, NOV just kept on going. Those options closed at $8.6 today!! However, we did go into RIG as the whole sector got stronger. RIG, DO, and SLB each added +3.93%, +4.76%, and +4.15%, respectively.

FLR also broke out today and recorded a new all-time high at $202.73. We caught most of this train with a trade initiated last Wednesday. I cashed out today with gains as high as +32.6%:
HappyTrading
Posted June 23, 2008 at 9:00 am | Permalink (Edit)
FLR ($201)
FLRGW, rest out at $14.8

These options traded as high as $16.4, but, closed at $12 (bid/ask: $12.3/$12.8). There could be more upside to FLR this week.

The steels were also flying high today. X and CLF both made new all-time highs, adding +4.5% and +10.82%, respectively. Coals and natural gas further contributed in balancing out techs’ weakness. Agriculture plays had a nice bounce in the afternoon.

The Dow and SPX both closed flat, while Nasdaq lost 20.35 points:

VIX slid 1%. SOX (semiconductors) led the techs down, dropping 1.15%. XLF (finacials) tumbled 3.16%, while HGX (housing) lost 2.38%. OIH (oil services) jumped +4.83%, while USO (oil) added +1.63%. UNG (natural gas) gained almost +2%. XME (metals and mining) advanced +1.62%. MOO (agriculture) went up +1.65%. FXI (Chinese ADRs) bounced +1.74%.

SPX

SPX was flat today, closing at 1318. Its daily MAs and MACD slid.

Nasdaq

Nasdaq lost 20.35 points and closed at 2385.74, below the 2400 support.

The overall market is still weak. Financials dropped lower, while oil went higher. Commodities were able to balance out techs’ weakness to render a flat market. So, the market continues to show pockets of strength, and, these sectors just keep on making new highs. Energy sector was also very strong today, as XLE (energy sector ETF) gained almost +4% and is positioning for a breakout. As I said this weekend, “If the overall market is weak, techs seem more vulnerable.” For now, I’m avoiding techs and playing these “pockets of strength”.

Good night and HappyTrading! ™