Earnings are still rolling in hard and heavy, but a Bank bailout is giving the market a lift this morning. The FDIC announced that it will create an operation designed to buy toxic assets from Banks in order to lift their balance sheets.....
Oh yeah, and today is the Fed "non-announcement" at 2:15pm ET.....
Pre-market futures are up strongly on the bailout news, especially in the Financial sector. The bailout announcement may be enough to cause the Dow to finally break above 8,250. That would be the beginning of a short term upswing that could lead to the 8,500 - 8,750 area. It may be that the Bulls get some help from the shorts this morning as short-covering in the Financial sector may cause as much commotion as actual buying. How ever it happens, it looks like the market will try to make another push through 8,250.
The Fed is probably going to be a non-event today, so the market may make some noise and get more active than normal ahead of the Fed. However, still be aware that there will be some wild gyrations after the announcement. Perhaps not as wild as normal, but I still expect some back and forth push and shove.
For now, the short term bottom is still intact, and the Bulls are still hanging on for the push. This mornings futures look like the best chance in several days for the Dow to finally get through 8,250.
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i don't know about you guys, but today's market makeup is about as difficult as it comes (for me). entering after a high open (right at resistance actually), with FOMC later in the day that could whipsaw me further... unless it rises above 8250 with conviction (as that's where I'd exist positions on a pullback), I personally don't see how today doesn't offer more downside risk than upside... yet I'm not willing to trade against the market and go short. what's a trader to do?
ReplyDeleteI might just have to stand aside on this one.
Kevin,
ReplyDeleteWith any announcement like this, as Dwight said, market rallys, financials short-cover. So, in my view, we head up for a couple of days if not into next week. I hate chasing the market in the morning too because I hate missing moves when the market just keeps going and doesn't pull back. My solution: buy part of the position now, if we get a pullback add more.
Joe
Hi Dwight/Everyone,
ReplyDeleteHelp pls; WFC is up +22.05% ($3.64) pre-market. Do I watch price action on the 2m & decide if Call candidate w/in minutes?
I'm trying to do this "professionally".
Scott L
Scott,
ReplyDeletePersonally, the lowest I dial down is the 10's. My track history of chasing stocks and being profitable is poor.
I now stand back and wait until I see if the gap holds or fails. In other words I wait to see a gap test. If it keeps running after being up 22% already then I have missed the trade. If the gap is test and bounces (depending on how much a pull back), Then I enter a small position.
Chic
9:57 - Is everyone watching to see if $INDU bounces off 8250.00 on this pull back on the 10's?
ReplyDeleteJoe-how did you do with CAM?
ReplyDeleteI held UHN call for 2 days and sodl this with a +28%. Target was $30, got out at $29.60-couldn't wait for target!!
ABX call-not so good. I holdin' and waitin' for it to go up more so I can have a smaller loss. Chasin'??
Scott-e-mail Gary O.
Happy Trading,
Margo
Good Morning All!
ReplyDeleteLooking forward do Dwight's VC this morning/afternoon.
Lot of action this am - I too do not want to chase any trades -probably one of my biggest short falls.
Good Trading to All!!
Robert
CANI_212
Hey Everyone,
ReplyDeleteHow'd the VC go? Can someone sum it up in a sentence or two?
Margo,
I'm still holding on to CAM. I think it's got a pretty good chance at 26 - 27.50 if the market decides that it wants to keep going.
How's everyone else doing?
Joe
I'm looking at the 2 day 2 min chart along with the 5 day 5 min chart. If TGT breaks the 34.64 support, is it possible it will fill the gap? I may place a continent order to buy if tgt goes through 34.64.
ReplyDeleteJoe, i ws late to VC and i only heard 1/2 hour of it. At the time, he mentioned that he liked NUE, RIMM and SGR. I'm not sure of his stance on these now since the 2:15 announcement. I'm sorry i can't be more help.
Hay APOL people (Gary) sitting at 30 mda with today being its low?? Entry tom. if holds? Any ideas?
ReplyDeleteDiane, Sorry it took me so long to get back to you. I'm kind confused with APOL. I didn't do well with my APOL trade so i'm afraid to comment too much.
ReplyDeleteI could be wrong, but if apol bounces off of 79.82 on high volume there may be potential for an up swing? However, If it went below 79.80 i may consider a put. Perhaps wait for another opinion so you can weigh your options.
Be careful and be nimble.
Hey Ladies,
ReplyDeleteI like APOL for a call, not put. We've already dropped a while since 1/16 and I don't know if there's much left. Also, the intermediate uptrend is still intact. However, I'd definitely wait for a move above 81 for calls (which could happen tomorrow if the market moves up again). A move below the 79 area would be a crucial break of support and then I'd look into puts.
Joe
Joe,
ReplyDeleteA few things that Dwight said on VC.
If Fed doesn't say anything "silly", mkt. could push 8350 up 200 -500 pts. in the next couple of days.
Stocks are better to trade instead of indices during earnings.
Adapt to risk management.
HUM-in full swing
TRA- trying to bounce
DE-on move
STLD, X-watch
GILD-put on radar
IBM/RIMM-good
SID,SGR-identical turning bullish
HIG
Breakaway and breakout gaps lead to swings then to trends. If you get both after earnings that is perfect.
Everyone feel free to add or correct if need be.
Margo
Taking notes like a mad woman
Thanks for the help. When you draw your support and resistance do you use daily? The smaller the time frame the more lines I add and pretty soon all I have is art work.
ReplyDeleteSomeone mentioned NOV the other day. Bought some calls with the idea of a few day swing. Looks good so far. I will tighten my stops tonight. Think we have a couple of up days left before the bears come out to play again.
Thanks for everyones help being new in this environment paralyzes me at times and it helps to have others out there to bounce ideas off and have others hunting for nuggets too.
Awesome Margo, thanks! I saw that HMO's were moving last week but didn't get in a HUM because I didn't think it could make it back up to previous highs with such a big pullback. But, the pullback only took out 50% of the gain from 11/24 - 1/6, so I should have realized that.
ReplyDeleteDiane,
I use the daily's for support/resistance/trendlines but I also move to the 60's quite often to draw some things in. Anything under that and it's way too messy.
Joe
Margo,
ReplyDeleteYou are totally awesome for putting out that write up. I don't get to VC Wednesday's because I am at work.
Here is an idea I have been working with (not Dwight like). Find companies that have really good financials that are really beaten up in price. Then take the risk at calling the double bottom as it bounces. These are stock trades. DAR, FRPT, GE, STX.
Call Options (Dwight like swing) trades are SID (I was in VC today for a few minutes), RIMM, STLD, GILD, GWW, NVDA. I am not inter-day trading (not Dwight like) them. I think most are mid to end swing. WFMI, however, was a recent entry that may follow through.
I was in TM thinking it would fall farther given the automotive industry down turn, but it held too much.
Nice to be making money again. I had quite dry spell.
Thanks again.
Don
Hi gang,
ReplyDeleteLooks like you guys had a challenging day, too. I've got a Reader's Digest true drama for you!
I've been out of more than the loop; I've been in the dark! Ice storm and snow whacked our poor trees and the electric substations. (+1" ice and a couple in. of snow on top: category 5 storm). Thank goodness for gas water heater, gas stove, gas fireplace and corded phone (kept for power outages such as this), oh, and batteries.
Miraculously, I came out overall profitably on my trades thus far this week. I had held NOV,DHR,DVN,and UNH from Mon. Then Tues. a.m. picked up NUE just before the power blacked out. I called TOS about 1:30 Tues. afternoon and put in sell orders for all and all were filled by EOD. Since, I couldn't watch charts and I didn't know when the power would return it seemed best to exit everything. Result: DVN -1%; DHR - 2%; NOV -8%; NUE +25%; UNH + 48%.
This was absolutely amazing to me since I was basically just making my best estimate at where stocks might land and priced options accordingly. I did write down TOS' tradedesk phone # and our acct numbers beforehand just in case the forecasters were correct and a storm should materialize.
Word to the wise - keep all your numbers handy in case weather threatens your trading. Power's flickering again... Have a good night, all.
I'm hoping the lights stay on and the heat (15 degrees last night)and that I can trade tomorrow!
Hi everyone,
ReplyDeleteI've been a little busy at work complicate that with being a 2 finger typist and well, you get the picture. I've returned everybody's email, I hope. APOL calls I'm dying with them but they keep buying it to close around 80. Support held today (thank God) around 78ish, but it's not running with the market. It's moved so much lately, there has to be a cool down. It's been an support/resistance play for a while so we're at support with a stop probably below 78ish. I wouldn't use a hard stop though if you can prevent it,IMO. APOl isn't for the faint of heart (and I'm losing mine). I see some nice trades out there amongst all of you so keep up the good work and I'll try to be more involved tomorrow.
Good Luck,
Gary
Dwight,
ReplyDeletePicked up some SPY calls EOD. Looks like the market may open a little weak and I may not get the push up this morning that I anticipated. Could please post a chart similar to the one a few weeks back that outlined the entry/exit "zones".