from MyHappyTrading.com (FREE Membership) by HappyTrading! ™
So, the market bounced today! Last night, in my evening post, I said,
“Although most sectors still look weak, we should see some bounces tomorrow. Some of these commodity-related stocks have really taken a beating, and, could get some near-term bounces.”
Metals, coals, energy stocks, fertilizers were all up today. Yesterday’s big losers were some of today’s big winners: CNX +8.94%; MEE +8.23%; ACI +6.79%; BTU +8.7%; DVN +4.97%; HES +7.5%; UPL +12.66%; HK +7.49%. The biotechs also showed some strength today as IMCL announced that it received another buyout offer for $70 per share! IMCL shares jumped +6.74% to close at $67.94. Other popular biotech names got excited too: DNA +1.53%; GENZ +2.4% (we started a new position in this); AMGN +2.63%; CELG +1.69%. I find DNA especially interesting as call options activities shot up today. There were 19,005 contracts traded on the Sept 100 calls (open interest: 56,358); there were 20,274 contracts traded on the Oct 100 calls (open interest: 15,981!!). Looks like some people are thinking a new offer above $100 may be coming soon for DNA!
The Dow was up +38.19 points; SPX added +7.53 points; Nasdaq gained +18.89 points:
Commodity-related sectors were mostly up: GDX (gold miners) +3.49%; XME (metals and mining) +3.6%; XLE (energy) +3.94%; MOO (agriculture) +2.54%; OIH (oil services) +2.23%. On the other hand, the pure commodities were mostly lower: GLD (gold) -2.97%; SLV (silver) -5.19%; UNG (natural gas) -0.67%; DBA (agricultural commodities) -0.74%. The techs closed mostly green with BTK (biotechs) added +1.93%. FXI (Chinese ADRs) bounced +1.44%.
SPX
SPX added +7.53 points to close at 1232.04. Its daily MAs slipped into a new bearish formation. The MACD went down.
Nasdaq
Nasdaq gained +18.189 points to close at 2228.7. Its daily MAs curved lower. The MACD fell.
The major market indices still don’t look too healthy, in spite of the bounce today. SPX’s daily MAs has just slipped into a new bearish formation and Nasdaq is basically there. Tech names are still mostly weak. GOOG, for example, went lower today again, closing at $414.16; $420 was a long-time support. VIX went lower today; it tested 24 and bounced up. It is still right on its daily upper BB (not shown here), which could still be pointing its way to 30! Financials were still weak (XLF was down 1.22%). GS was down 2.52% today and continues to look weak ahead of its earnings next week. Tomorrow we have more job data coming out. If the market reacts well, this bounce does have some more room to go. But, as I have been saying, in order for any rally to sustain, VIX has to go below 21, and, 22 is a support. So, if you’re on the long side of things, taking profits may not be a bad idea; if you’re on the short side, the momentum may still be on your side.
Good night and HappyTrading! ™
