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Last night, I commented, “The market could probably carry this upward momentum into the morning. Then, things will likely get volatile before and after the Fed announcements.” The marke showed strength through most of the day. It started to lose steam before the Fed announcements, and dropped immediately after the Fed announced a half-a-point cut in interest rates. Then, it rallied back up. The Dow was up over 200 points. But, in the last 15 minutes, the market took a sharp dive! The Dow ended down 74.16 points; SPX lost 10.42 points; Nasdaq added +7.74 points.
The financials were very weak today, as XLF slid 6.16%! Commodity-related sectors were mostly higher. Coals stocks made some big bounces: BTU +11.26%; MEE +11.42%; CNX +18.15%; ACI +11.31%. Agriculture shares were strong also: POT +13.95%; MON +5.75%; MOS +12.24%.
The market has been very volatile. So, I have been making quick daytrades and not publishing too many, as they are more difficult for our subscribers to follow. There are couple of trades that I made in the past few days that I thought I could share for our subscribers/readers to keep an eye on, especially if the market gets stronger:
POT +46.5% (Dec 85 calls)
These options went as high as $9.5 today and closed at $8.39.
CF +27% (Nov 50 calls)
I cashed this one out yesterday just before the close. These went higher today, up to $10.46. MON has been exceptionally strong in this bounce; and, the options are cheaper.
GENZ +71.4% (Nov 70 calls)
GENZ was on fire yesterday, charging up +12%. It came back down today, losing 4.32%. If the market can sustain this rally, GENZ should go back up!
Here’s how the market closed:
VIX ended up, closing almost at 70. Commodity-related sectors lead the market: OIH (oil services) +6.98%; XME (metals and mining) +8.31%; USO (oil) +4.62%; UNG (natural gas) +7.17%; DBA (agricultural commodities) +3.45%. FXI (Chinese ADRs) slipped 3.52%.
SPX
SPX lost 10.42 points to close at 930.09. It closed above the 10-day MA. The MACD went higher, showing a bullish crossover.
Nasdaq
Nasdaq added +7.74 points to close at 1657.21. it closed above the 1650 level and above its 10-day MA. The MACD also shows a bullish crossover.
Well, the major market indices are finally showing bullish crossovers in the MACD. But, as I said last night, “The market will need to show a follow-through and perhaps close above the 20-day MA to make a difference this time.” The market did test the 20-day MA, but, was not able to close above; and, we can’t really call today’s actions a “follow-through”. The marke would have made it, if it weren’t for the sharp dive in the last 15 minutes. The market barely closed above the 10-day MA and VIX is still at 70. Tomorrow, we have the GDP report, which is not expected to be good. We’ll also get the jobless claims. The market is definitely trying to turn, but, it has not proven itself that it is ready to call a bottom. We’ll have to see what it does tomorrow.
Good night and HappyTrading! ™
