This morning, the latest jobless claims fell by the largest amount in almost a year. In addition, China reported solid export numbers. The market opened strongly and closed even higher. On Tuesday, in my article, I gave some trading ideas. Basically, I said that if the market is strong, the buying will be in the energy and mining stocks. On the other hand, if the market is weak, oil services would invite more selling. Yesterday, we saw the market slip in the afternoon; and, oil services got hammered! BP and APC posted double-digit losses and recorded new multi-year lows. Today, the market rallied, and energy and mining stocks led the market higher.
We were properly positioned to take advantage of the market’s rally. We locked in a +107% gain on BHP calls:
June 10, 2010
07:01 | HappyTrading BHP ($65.68) Sold to Close 06C60 Jun 60 calls, at $6.00 +107%
Once again, we got the day high on these BHP 60 calls. If you have been following my trades or articles, you’d know that this happens quite often. We also took some profits on CLF 50 calls, which were opened just this morning:
June 10, 2010
12:57 | HappyTrading CLF ($54.80) Sold to Close 06C50 Jun 50 calls, at $5.30 +25%
We also did a quick fun trade on GS 135 puts, just because GS was dropping fast on a new mortgage investment investigation by the SEC:
June 10, 2010
09:09 | HappyTrading GS ($132.80) Sold to Close 06P135 Jun 135 put, at $5.10 +20%
09:04 | HappyTrading GS ($134.00) Bought to Open 06P135 Jun 135 put, at $4.25
This trade only lasted 5 minutes! If you had traded 10 contracts, you would have made $850 in 5 minutes!
Oil services bounced strongly, as investors/traders jumped on this badly beaten sector: BP +12.26%, APC +12.4%, NBL +4.63%, DO +7.44%, RIG +3.97%. Another badly beaten sector is the agriculture stocks, and they drew buyers in as well: CF +9%, POT +4.8%, AGU +4.86%, MOS +6.56%.
The Dow finished up +273.28 points; SPX jumped +31.15 points; Nasdaq gained +59.86 points:
OIH (oil services) jumped +6.88%. XLE (energy) added +5.02% and XME (metals and mining) gained +4.62%. XLF (financials) went up +3.28%, even though GS was especially weak. MOO (agriculture) rose +4.17%. FXI (Chinese ADRs) advanced 2.42%.
SPX
SPX jumped +31.15 points to close at 1086.84, above the 1080 level and above its 10-day MA. Its MACD turned up.
Nasdaq
Nasdaq gained +59.86 points to close at 2218.71. It closed just under its 10-day MA. Its MACD also went higher.
This market has really been trying to bounce, but, has been having a difficult time. Yesterday, we saw strength in the morning. But, in the afternoon, BP dragged down the oil services, which in turn, dragged the market down. Today, the market was strong again in the morning. Techs lagged in the rally. SPX was propped up by the energy and mining stocks. But, GS was especially weak and almost pulled the market back again! Techs started to gain momentum in the afternoon, led by AAPL, which finished up $7.31 (AAPL was in the red earlier this morning). Once techs got going, the market pushed forward. VIX went briefly below 30 this morning, but, still closed above. So, this market is still a little hesitant. With SPX closing above the 1080 level today, the market should test 1100 soon. We’ll see if the retail sales number can keep this rally going tomorrow.
Good night and HappyTrading! ™ 
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