Market Bounces Up on Durable Orders

Pre-market futures are down a little with oil climbing to short term resistance at $117.50. The Oil Inventory Report comes out 60m after the open. Also, Durable Orders is due out 60m before the open, which will probably also affect the futures and the market open.

If the Durable Orders number comes in stronger than expected it will probably boost everything, including oil. If it comes in worse than expected, it will probably drop the market, but Oil may still stay up a little on the potential hurricane disruption in the Gulf of Mexico. If the Storm/Hurricane doesn't materialize then Energy traders will go looking for the next catalyst. A breakout above $117.50 would probably take Oil back towards $122.50 and a drop below $116 will probably take prices back down towards $112 - $112.50.

7:15 am MT: Durable Orders came in stronger than expected, which is giving the futures a little bump up. It looks like much of the strength in Durable Orders was due to exports, which traders are expecting to attenuate in the coming months because of the economic slowing in Europe and Asia. So the early morning bump may be short-lived. It is giving Oil a boost as well, so I will look to sell my Energy calls right out of the gate.

7:45 am MT: I sold the DVN calls for a 2.53 profit or 35% gain. I sold the EOG calls for a 1.50 profit or 22% gain. I sold half the SWN calls for a 1.00 profit or 36% gain so far. I also stopped out of the Q’s calls for a small .02 cent gain, so basically breakeven.

8:15 am MT: The market is gyrating around as bullish Speculators buy the past (Durable Orders), and bearish Speculators sell the future (slowing economies in Europe and Asia and a jump in the price of Oil). The net result is somewhat of a sloppy, light volume morning, which follows sloppy, light volume trading the past several days.

I picked up some more SWN calls that I will look to sell right into the Oil Inventory Report.

8:35 am MT: I sold the rest of the SWN calls. The total trade was a 1.20 profit or 43% gain. I also nibbled on ADSK calls. 11:00 am MT: I bought and sold ADSK calls in the past two hours. I made 10% on the calls. I also nibbled on BTU calls. In addition I’m looking with interest at calls on JOYG, RIMM, FLR, NIHD, and ADBE. There are some interesting movers today, but nothing really sector-wide. The Energy stock play appears to be over, and Retail is not doing anything.

I made $2,862 on all the closed positions today.

4:00 pm MT: Market Wrap: The SPX bounced today on the positive Durable Orders report and ran up to the short term downtrend line resistance at 1,285. The Dow pushed through 11,500 and did basically the same thing as the SPX. The Naz bounced to the top end of its consolidation channel. All three indexes bounced today, which puts me in chop and slop mode with my trading. I won’t do anything new on the DIA, SPY, or Q’s that isn’t a short swing using the 30m/60m charts. If I see a big sector move like the Energy stocks yesterday, then I may go in with medium size, but even those will be quicker trades just like the Energy calls were. With the tail end of August and September coming up, I’m guessing that we won’t see strong intermediate term trending in the market. However, there could still be some nice sector swings here and there, just like the Energy calls were yesterday and today.

Tomorrow we will get GDP and Initial Jobless Claims. I doubt either one will drive the market out of the channel, or out of choppy mode, but they will impact things a bit in the morning.

Here are some charts on ADSK, BTU, and JOYG, which I like for (paper trading) calls right now. As always, keep any swing trades a little quicker and shorter, but these three, along with the others I mentioned above, might have 1-2 days left in the current swing, perhaps more.

Here is a chart of ADSK showing the confirmed bounce off the Earnings Gap. The first target is 38.50 - 39.00. A full swing could take it to 39.75 - 40.00. I doubt we will get a full swing under our current market conditions. A stop would be in the 35.50 - 35.75 area.
(click on image to enlarge)


Here is a chart of JOYG showing a Rising Three Methods variation. The first target is 72.50 - 73.00. It's possible that JOYG could go as far as 74.00 on the current move, but I would be scaling out at 72.50. A close stop would be 69.90 and a wider stop would be in the 68's. Keep in mind that JOYG has earnings coming up, so this is a 1-2 day play at most.
(click on image to enlarge)


Here is a chart of BTU showing a hybrid of a Tasuki Gap and Upside Gap Three Methods and the formation of a potential Reverse Head and Shoulders. The first target is 68.00 - 69.00, and a full swing would be 71.00. As with the others, I'm not looking for a full swing, but I'm open minded.....
(click on image to enlarge)


Here is the 15m chart of BTU showing an Ascending Triangle today, which bodes well for a continuation tomorrow.
(click on image to enlarge)

Now remember, 2008 has been 2008, so bullish probability hasn't played out as high as it did in 2006 - 2007. Just because I've showed you these nice looking call setups doesn't mean they will all work. But as a speculator, I'm speculating that they could play out to the upside tomorrow, or in the next couple of trading days. We shall see.....