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The market opened lower this morning, with some more profit-taking. But, it seemed like the market was not quite done with this rally. It continued to rise all day from the low open to close at the day high. Most sectors were higher. Coal stocks were very strong: CNX +9.05%; MEE +16.24%; CLF +14.29%; ACI +12.97%; CLF +14.29%. Education stocks also saw renewed some strength: APOL +7.41%; ESI +2.37%; DV +4.75%; EDU +5.67%.
This market has rallied for 4 straight days and it seems the market is trying to change its tone. What’s different in this rally? The financials. The financials started this rally as Citigroup’s (C) bailout was cheered by the investors. Everyday, this week, the financials made gains. SKF (financials ultrashort) has gone from Friday’s intraday high of above $300 to today’s close of $141.9. SKF‘s value has been cut in half, and then some!
We did a some good trades since last Friday. We cashed out on RIG puts just in time to switch gears to call plays:
The options that we mentioned last night on BIDU, BDQLH (Dec 140 calls), jumped as high as $18.5 from yesterday’s close of $9.4!
The Dow was up +247.14 points; SPX added +30.29 points; Nasdaq +67.37 points:
We finally saw some strength in the techs: SOXX (semiconductors) +7.64%; INX2 (internet) +4.8%; BTK (biotech) +3.53%; SWH (software) +2.44%. XME (metals and mining) led the market with a +11.79% gain. OIH (oil services) added +8.92% and USO (oil) garnered +7.69%. UNG (natural gas) bounced +6.18%. PBW (clean energy) hopped +8.24%. XLF (financials) continued to rise, up +4.66%. FXI (Chinese ADRs) jumped +11.55%.
SPX
SPX added +30.29 points to close at 887.68. The 30-day MA has started to flatten. The MACD has established a new bullish crossover.
Nasdaq
Nasdaq gained +67.37 points to close at 1532.1. It closed above the 1500 level. The MACD is showing a new bullish crossover.
Finally, VIX dropped below 60, closing at 54.92. The Dow (not shown here) actually closed above its 30-day MA. SPX is getting close. Nasdaq still needs to cover some distance, although it did close above the 1500 level. Tomorrow is Thanksgiving and a half day for the market. I cashed out the new call trades to stay in mostly cash for the holiday. The market has gone quite far in the past 4 sessions. I’m encouraged by this rally, but, want to wait and see if it has enough momentum to continue. VIX‘s intraday charts have bottomed out. Although it is definitely good to see VIX under 60, it might need to test it again. The market itself is testing the 30-day MA again, and, we’ll see if it can break above it this time.
Happy Thanksgiving!
Good night and HappyTrading! ™
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