Market Summary (continued)
The Thursday rebound from the bottom of the late October to present trading range failed Friday. From the get go. Stocks had no upside follow through to the 1492 point round trip on DJ30. Sure futures bumped higher off the lows after the jobs report was a bit weaker than anticipated and OPEC struck a deal to cut production by 1.2M bbl/day, more than anticipated. Indeed, stocks even started to recover as the trading session started. Within 10 minutes, however, the bids died and a half hour into trading the selling started in earnest. Stocks sold all session, taking the indices back down to the October/November lows with RUTX even closing below those lows.
SP500 -62.87, -2.33%
NASDAQ -219.01, -3.05%
DJ30 -558.72, -2.24%
NASDAQ 100 -3.30%
VOLUME: NYSE -19%, NASDAQ -12%. Volume faded from the spikes Tuesday and Thursday, but was still above average as NYSE sold off. NASDAQ trade remained at average levels, elevated since it started selling back from the 200 day SMA test.
ADVANCE/DECLINE: -2.2:1 NYSE, -2.6:1 NASDAQ
So what was the problem? A bounce off the bottom of the range, the WSJ reporting the Fed will adopt a wait and see view to further hikes after the December hike -- if that even occurs as some on the Fed (Bullard) are now suggesting the Fed pass on a December hike, and the US and China calling a truce on the trade war for 90 days. Everything would appear conducive to the market rebounding.
Perhaps not. There is the yield curve that is stating to invert among the shorter maturities and the concern is the Fed will hike in December right into an inverted curve and bring about the usual result of a Fed hiking campaign: bear market, recession. The irony drips with bitterness: the Fed is always trying to prevent overheating leading to inflation that it causes a recession -- and inflation.
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CRM (Salesforce.com--$135.95; -6.11; optionable): Software
STATUS: CRM is sitting on the fence of upside or downside. If the market does not hold the bottom of the range on the indices, stocks such as CRM likely fall. CRM is sitting at the 200 day SMA over a pair of gaps higher from the November low. If it breaks lower and the market is breaking lower, we want to play a move to fill those gaps. That lands a 70%ish gain on the put options.
Volume: 6.224M Avg Volume: 7.563M
BUY POINT: $134.71 Volume=8M Target=$120.69 Stop=$139.32
POSITION: CRM FEB 15 2018 135.00 p - (-44 delta)
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Here's a leader play and our current analysis.
STATUS: CENT is a stock that tends to do well in recessions or fading economies. People take care of their pets and yards no matter the economy. After trending lower since July, CENT has set up a double bottom from late October to late November. As it put in the second low MACD put in a much higher low indicating momentum turning upside. CENT rallied into last Monday, moving through the 50 day MA's. It tested Tuesday to Friday, showing a pair of doji to end the week. Excellent setup to move higher toward the August/September consolidation and we want to play CENT as it breaks upside and continues the rebound started 7 sessions prior.
Volume: 195.52K Avg Volume: 109.002K
BUY POINT: $33.51 Volume=165K Target=$38.50 Stop=$31.85
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TEAM (Atlassian Corporation--$85.14; -0.57; optionable): Software
STATUS: One of the software stocks and a strong one in a group that remains stronger. We bought a half position earlier and now TEAM is testing the initial break higher, fading to the 50 day MA's Friday. That has formed something of a handle to its double bottom at the 200 day SMA spanning late October into November. MACD put in a higher low on the second bottom. If the indices hold the trading range lows and bounce, TEAM will be leading and it has plenty of room to make us money. We want to play a strong new break higher with a run toward the 95 level.
Volume: 1.898M Avg Volume: 1.717M
BUY POINT: $82.41 Volume=2M Target=$94.94 Stop=$78.38
POSITION: TEAM JAN 18 2018 80.00 C - (65 delta) &/or Stock
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--by the MarketFN STG Team
INTC (Intel Corporation)
Our Success Trading Group members scored another winning trade this week when we closed out a position in Intel Corporation (Ticker: INTC). We are watching several stocks and are looking forward to trading next week.
Our Success Trading Group closed
7 years with 0 losses on our Main Trade Table. In fact, we closed 100% winning trades for the calendar years 2016, 2015, 2013, 2012, 2011, 2010 and 2009 (we still have 1 open position from 2017 (all others were winners) and 1 trade that we opened in 2014 was closed as a losing trade). All of these trades are posted on our Main Trade Table for your review during your free membership trial period.
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KL - Kirkland Lake Gold Ltd. is currently trading at $23.37. The January $22.50 Calls (KL20190119C00022500) are trading at $1.80. That provides a return of about 5% if KL is above $22.50 on expiration Friday in January.
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| The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites.|
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