The market finished a strong week with the Dow up +396.03 points, SPX adding +21.19 points, and Nasdaq gaining +43.7 points! Last weekend, in my Market Forecast, I said,
“The market is still in a very precarious position. SPX is trying hold on to 1240. Nasdaq tested 2200 on Friday and bounced back, but still closed under 2250. Any further downward push, we may see capitualtion on the market. VIX got close to 30 on Friday, as high as 29.44. Although it came down to close at 27.49, its momentum is still on the upside, and we may just see VIX above 30 next week. As mentioned in my video podcast yesterday, lots of earnings are going to come in next week. I think we’ll need more than a few good ones to turn this market around. Needless to say, I’m still being very careful.”
The market indeed was weak to start off, and VIX ran above 30 on Tuesday. But, on Wednesday, WFC reported better-than-expected earnings and the financials finally bounced, which inspired the market to rally. We also had good earnings from JPM, INTC, JAVA, and IBM, to add a few more. The market finished the week with the 10-day MAs turing up on Nasdaq and SPX, and achieving the bullish turnover on MACD as well (mentioned in our 1st video podcast last weekend).
My boldest call last weekend, in my own opinion, was on oil. I said in my Sector Watch that “USO is starting to look a little bit like XME before that big 1 day drop. Let’s see how USO does Monday and Tuesday.” Indeed, on Tuesday, USO took a big tumble, and continued lower throughout the week!
Given that it was an options expiration week, We had 2 trades that expired:
6/11/08 buy to open
FCX ($121.6)
FCXGY, July 120 calls, at $9.8 (EXPIRED, partially out)
6/25/08 buy to open
DECK ($143.9)
QUKGY, July 145 calls, at $6.3 (EXPIRED, nibbling)
We had taken profits on most of the FCX trade and left a few contracts in for a possible buyout. DECK was a bad trade on a failed breakout; good thing it was just a “nibble”.
However, we did finish off a great week with 100% GR$$N on closed trades, besides 1 partial, early, exit on DNA before its earnings:
BRCM ($29.7)
RCQGY, July 27.5 calls, at $2.2, +15.8% (all out)
DNA ($81.1)
DWNHO, Aug 75 calls, at $7, +37.2% (all out)
BRCM ($29.70)
RCQGY, July 27.5 calls, at $2.25, +35% (more out)
SPWR ($80.38)
QSUHP, Aug 80 calls, at $7, +4.4%
AEM
AEMGO, July 75 calls, at $5.3, +35.8% (all out)
GLD ($97.25)
GLDHP, Aug 94 calls, at $5.1, +30.7%
BRCM ($29.35)
RCQGY, July 27.5 calls, at $2.05, +7.9% (partially out)
GS ($163.5)
GPYHL, Aug 160 calls, at $11.8, +29.7%
MA ($260)
MALHY, Aug 280 calls, at $11, +3.7%
AEM ($79.15)
AEMGO, July 75 calls, at $4.6, +17.9% (partially out)
DNA ($75.3)
DWNHO, Aug 75 calls, at $3.1, -39% (partially out)
The new trades left open were:
FXI ($136.5)
FAHHE, Aug 135 calls, at $7.3 (open)
Friday close: $6.8; unrealized gain/loss: -6.8%
MON ($110.7)
MONTB, Aug 100 puts, at $5.9 (open)
Friday close: $5.1; unrealized gain/loss: -13.5%
DUG ($35.5)
DUGHI, Aug 35 calls, at $3.3 (open)
Friday close: $2.48; unrealized gain/loss: -24.8%
Overall, very good results, especially in a crazy market environment! Need some trading ideas for this market? or, perhaps bounce off your own ideas with an active trading community? Come join the daily market conversation on our member board!
Hope you’re enjoying your weekend. I’ll be back tomorrow with my weekly Market Forecast.
Happy Saturaday and HappyTrading! ™
