Wang's Happy Trading

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The market had a wild ride today, especially after the Fed announcements.  The Fed kept rates unchanged at nearly zero and launch $1.2 trillion effort to revive the economy, including an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.  FRE, FNM, and AIG all jumped more than +40%!!  Financials were on fire:  GS +6.32%; PRU +19.01%; BLK +11.21%; STI +16.71%; and PNC +10.38%.  Things were volatile in the afternoon, but, the intial jump (after Fed’s announcements) were fast and furious.

We caught a nice trade on STI April 13 calls:
11:41 | HappyTrading STI ($13.85) Sold to Close STIDV Apr 13 calls, at $2.65 +51%

We also had a GS in place, but, got shaken out early:
11:07 | HappyTrading GS ($101.10) Sold to Close GSCT Mar 100 calls, at $3.30 +12%

Gold jumped from nearly $880 this morning to above $940 after the FOMC meeting!  Bonds also jumped as the Fed committed up to $300 billion to buy long-term government bonds.  We got shaken out of our GLD calls this morning as gold plummeted $20.  We had this position in play as a hedge to the stock market:

08:07 | HappyTrading GLD ($87.90) Sold to Close GLDCL Mar 90 calls, at $0.35 -89%

If we had held this position until after the FOMC meeting, we would have turned a profit.  Oh, well, it is our only losing position in a couple of weeks!  We are back in cash and ready for the market’s next move.

In my article last night, I said, “If VIX breaks below 40, the market should test the above mentioned resistance levels (SPX 800 and Nasdaq 1500).”  VIX did briefly go below 40 today, and, both SPX and Nasdaq hit my near-term targets.  The Dow ended up +90.88 points; SPX added +16.23 points; Nasdaq gained +29.11 points:

XLF had another double-digit gain, +10.02%.  GDX (gold miners) also added more than +10%.  SOXX (semiconductors) was strong, up +3.44%.  XME (metals and mining) bounced +4.14%.  GLD (gold) and SLV (silver) both regained some lost grounds.  HGX (housing) continued higher +6.85%.  FXI (Chinese ADRs) rose +0.76%.

SPX

SPX added +16.23 points to close at 794.35.  It briefly went above 800.  Its 20-day MA has flattened.  The MACD went up.

Nasdaq

Nasdaq gained +29.11 points to close at 1491.22.  It touched above 1500, but, closed under.

So, both SPX and Nasdaq touched their respective near-term resistance levels: SPX 800 and Nasdaq 1500.  XLF (the financial ETF) has gone from $6 to $9.4 in a little over a week!  I think we could see some residual buying tomorrow morning, but, things are getting very toppy.  We also only have 2 days left for March options, so, be aware of expiration manipulations.  Things will be violent and the moves will be fast and big.  Let’s make the most and best of this moving environment!!

Good night and HappyTrading! ™