Wang’s Happy Trading

The market did a total U-turn today from yesterday’s close and gain back more than it lost yesterday! This weekend, in my Market Forecast, I said,
“For the new week, the market should continue to look for confidence in the financials. We need to see the financials continue with their recovery process. Oils and the energy sector still look weak and could fall further, which would be good for the overall market. VIX closed below 23 last week. Below 22 would be very good for the market.”

I also mentioned about sharp drops such as what we saw last Thursday and on Monday being opportunities for the market to let out steam quickly and resume the recover process. After a brief lull, oil prices continued with its downward spiral, partially due to the strengthening in the dollar. The financials came back with a vengeance today and inspired the market to rally again! Among the leaders, BAC jumped +14.83% (I played those Aug 30 calls again, which more than doubled today! I think these can go higher). BAC can go back up to test $34 soon. MA and V were also strong, receiving favorable comments ahead of their earnings. MA and V were up +3.31% and +7.68%, respectively. PNC (up +7.74%; we started a new trade on this) and BLK (up +5.61%) both already reported great earnings look like they are ready to break out higher.

This morning, ALXN gapped higher on good earnings and a stock split announcement. OptionDragon was there to capture a near “bagger”:
optiondragon
Posted July 29, 2008 at 6:37 am | Permalink (Edit)
Out of some ALXN at $8.50 aug 80 calls from 4.70

X shares jumped more than +14% on record earnings. I think X should go higher from here, although it might need to trade sideways for a few days. BIDU continued were it left off yesterday and added almost $14. We went back into those August 350 calls, mentioned yesterday, and already cashed out partially with a +40% gain:
HappyTrading
Posted July 29, 2008 at 9:14 am | Permalink (Edit)
BIDU ($339)
BPJHJ, Aug 350 calls, bought at $10

HappyTrading
Posted July 29, 2008 at 12:34 pm | Permalink (Edit)
BIDU ($347.3)
BPJHJ, took some profits at $14.

QCOM also came back up and I went back into those August 52.5 calls. It is knocking on the doors of $55 again! Breaking above $55, I think this can go to $58.

The Dow went up +266.48 points; SPX gained +28.83 points; Nasdaq jumped +55.4 points:

VIX closed down 9.08% at 22.03. USO (oil) lost another 2.49% and XLE (energy) slid 1.19%. XLF (financials) jumped +8.09% while HGX (housing) added +6.09%. GLD (gold) went down 1.24%. Techs were strong: INX2 (Internet) +2.55%; SOX (semiconductors) +2.35%; SWH (software) +3.74%; and BTK (biotechs) +1.04%. XME (metals and mining) advanced almost +3%. PBW (clean energy) hopped +5.03%. FXI (Chinese ADRs) added +2.96%.

SPX

SPX gained +28.83 points to close at 1263.2. It closed above its 20-day and 10-day MAs. Its MACD went up.

Nasdaq

Nasdaq jumped +55.4 points to close at 2319.62. It closed above the 2300 level and above its daily MAs! Its MACD turned higher.

After another sharp drop on Monday, the market has resumed its recovery process. VIX closed at 22.03; below 22 will be very good for the market. The financials look to be on a new wave of buying to test the heights set last week on the initial bounce. SPX is now displaying its 10-day MA above the 20-day MA. Techs are looking strong. Nasdaq closed above the daily MAs and its daily upper BB has opened up, hinting for further upwards movements. If VIX falls below 22, we should see the market make another attempt to break the recent resistance levels (SPX 1280; Nasdaq 2350).

Good night and HappyTrading! ™