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The market finally pulled back today, prompted by INTC’s earnings warning and a huge drop in oil prices. INTC fell more than 6%! GOOG led the techs down, point-wise, dropping more than $12. This morning, MON reported good earnings and raised its outlook. Its shares jumped at market open. In the Trading Room, we were watching MON’s trading actions:
HappyTrading MON
will be interesting if the market turns up later…
MON
trying for new leg up…
DoubleDown
MON big volume at 90…could push through 90 but I imagine they will pin it there at exp..
I did some quick trades on MON. These trades were meant to be quick trades because the market was going the other way (down) today. Even though the market slid lower all day, MON’s chart was just too compelling:
I got the first trade in the morning at $8.3, but, soon chickened out at $9 when the market got weaker. But, MON kept on climbing. In the afternoon, I did a second trade opening at $10.7, and was able to cash out at $12 and $12.5. These options traded as high as $12.6 and closed at $12.16. Depending on how strong the market is tomorrow, I think MON could easily test $90. Sometimes when a stock is running in one direction driven by an event, such as good earnings, one could find quick, profittable trades by picking up “in-the-money” options in favor of the direction that the stock is moving.
After the market, ISRG announced preliminary results that apparently disappointed the investors. ISRG is trading more than 15% down, below $100, in AH trading. Just 3 days ago, ISRG was trading above $130. Again, fast movers like ISRG could generate some interesting quick trade opportunities tomorrow. We’ll be making updates on ISRG in the Trading Room.
The Dow was down 245.4 points; SPX lost 28.05 points; Nasdaq fell 53.32 points:
USO (oil) dropped 10.68%. Commodity-related sectors were mostly weak: OIH (oil services) -4.27%; XME (metals and mining) -7.29%, XLE (energy) -4.24%; GDX (gold miners) -7.85%. MOO (agriculture) was also down even though MON had some great news. Techs were down also, with SOXX (semiconductors) losing 4.88%. FXI (Chinese ADRs) fell 7.16%.
SPX
SPX lost 28.05 points to close at 906.65. It closed above the 900 level and above its daily MAs. The MACD flattened.
Nasdaq
Nasdaq lost 53.32 points to close at 1599.06, below 1600. It managed to stay above the daily MAs. The MACD was higher.
So, we have been calling for the market to have a meaningful pullback. Now, here it is. The major indices managed to stay above their respective daily MAs. SPX 900 will be a very important support to hold. We took profits early and continue to hold mostly cash and wait for clearer signals. VIX went up above 40 today, closing at 43.39. 44-45 is a resistance, so pay attention to that level. TLT still looks very interesting. If it breaks $110, it could start a new leg down.
Good night and HappyTrading! ™
