Wang’s Happy Trading

Last Thursday, in our Trading Room among the many discussions, I pointed out that, "This market is on the verge of a run up…"  Last night, in my Market Forecast, I commented on the strength in the market indices, "For both SPX and Nasdaq, the daily MAs of are moving into a new bullish phase."  The market finally pushed higher above the key resistance level, with SPX gaining +2.2%, closing above 1120. 

In my Market Forecast, we also specifically looked at oil, mining, and the agriculture sectors.  Oil broke out today and closed above $81/barrel.  Oil services led the market higher:  BP +2.47%, APC +8.36%, RIG +9.67%, DO +3.68%.  Early in the morning, I called out APC as one of the stocks that were breaking out:

August 2, 2010 7:23 AM
APC
breaking out…

APC was trading under $52 at the time and the August 50 calls were trading at $3.2/$3.25.  Those August 50 calls closed at $4.4 today.

Miners were also among the leaders.  In my Market Forecast, we looked at CLF, WLT, BHP, and FCX.  They were the leaders today:  CLF +7.12%, WLT +7.12%, BHP +4.1%, FCX +4.56%.  We published a trade in CLF and already locked some profits at an intraday gain of +21%:

August 02, 2010
12:40 | HappyTrading CLF ($60.65) Sold to Close 08C60 Aug 60 calls, at $3.20 +21%

We also talked about agriculture stocks having the potential to break out.  POT pushed as high as $109 before settling at $107.65, up +2.65%.  CF added +1.59%, and AGU rose +1.41%.  We have been trading POT, CF, and AGU, and had already locked profits last week.  We mentioned that MOS has been lagging, and, it did some catching up today, up +3.65%.

Before the market closed today, one of our members exclaimed:
MarketQuest August 2, 2010 12:51 PM
… Always a pleasure to be in such great trading company. Happy’s still the best blog out there, imo Thanks, All and a pleasant eve

After the market, HLF’s net income jumped +70% and easily beat the street estimates.  HLF shares vaulted more than +10% in after-hours trading.

The Dow closed up +208.44 points; SPX jumped 24.26 points; Nasdaq gained +40.66 points:

USO (oil) was up +3.23% and OIH (oil services) surged +4.18%.  XME (metals and mining) added +3.47% while XLE (energy) gained +3.49%.  MOO (agriculture) climbed +2.7%.  BTK (biotechs) rose +2.2%.  XLF (financials) hopped +2.52% (above $15!!).  FXI (Chinese ADRs) popped +2.79%.

SPX

SPX jumped +24.26 points to close at 1125.86, above the 1120 level.  The daily MAs and MACD moved higher.

Nasdaq

Nasdaq gained +40.66 points to close at 2295.36, just below 2300.  Its daily MAs and MACD also went up.

Last night, China reported a PMI of 51.2.  Although it is lower than June, it stayed above 50, still indicating expansion.  This morning, both Europe’s manufacturing data and the US ISM were better-than-expected.  These helped to revive some optimism on the global markets and prompted industrial and commodity sectors to rally.

To me, this rally has really barely started.  If we look back, the market indices are no higher than where they were back in June, with the exception of the Dow, which closed above 11600 today.  Back in June, the 2-week rally (from 6/8 to 6/21) was merely a bounce from the drop that started in May.  The 2-week rally quickly turned into a 2-week sharp fall that tested the bottom.  Now, a month after the bottom was tested, we are just beginning to revist June highs!  Breaking above the June highs, in my opinion, would then be the start of a new run-up!  Having SPX close above 1120 was certainly encouraging today.  Let’s see if this market can get some follow-throughs and pick up some momentum.  It’ll need to break out of the recent trading range to draw in new, sidelined, money.

Good night and HappyTrading! ™ (click to see our Facebook Page)