OptionsVest

The first drop in the price of Oil and some good news in the Technology sector inspired the stock market today. The DJIA decided to bounce off of the support of its 20 day MA and the 12, 750 level it was sitting at on Friday’s close. The S&P 500 and the NASDAQ both bounced off of their 20 day MAs as well. Volume was nothing special, so we’ll have to wait and see if the bulls have enough energy to push stocks through their 200 day MA and change the tone from a bear market rally to a new bull market.

JD

The DJIA closed at 12, 745 yesterday, just a couple of points below support. It is the first index to retrace back down to test its new found support at 12, 750. On Monday we should get a good indication if the Dow is going to lead the market back down, or if it can bounce back and kick start the bullish crowd once again.

Oil has entered the parabolic phase of its accent.  It was up almost 10 dollars last week just settling below $126.  After-hours on Friday, FDX came out and warned because of this.  Does anyone else hear the footsteps of the bogeyman called Stagflation?  The market has faked out almost everyone.  It managed to get the shorts to cover based on the breakout and the bulls to commit new money.  I wouldn’t be surprised if the next move is lower.

BA

The CFC trade is working perfect. I would stay in it until the news is out. CLF didn’t disappoint but the trade is still a small winner. That is the benefit of getting a back spread for a credit. I would let the trade expire.

BA

Trade was iniated today.  Sold Jun 5 calls and bought Jun 5 puts +.30.  This trade should be kept on until the news is out.

BA

Most likely Cleveland-Cliffs will not disappoint on earnings but if it does it could get ugly. Trade recommendation: Buy 2 May 155p and sell 1 May 165p +.50. Any upside should make a small amount any big downside will do very well. The worst spot for the stock with this position would be a close at 155 at May expiration.

BA

Why should BAC continue with its purchase of CFC when the government is giving handouts to white knights? If it does go through with it, the price will be reduced. Sell any of the 5 level calls and buy 5 level puts.

BA

The unemployment number came in at a better than expected -20k.  The Dow is up over 100 pre-market.  Bonds and the curve are taking it on the chin.  Who cares if people can’t pay their mortgages.  Let’s party like its 1999!  The big test will be if we can keep this momentum on the upside.

BA

The DJIA spent the day taking back all the ground it lost after the FED meeting yesterday to close above 13,000 for the first time since the first week of trading in 2008. The S&P 500 closed above 1,400 for the first time in 4 months as well. While these indices made intermediate term highs on less volume than yesterday, the NASDAQ is trying to lead the stock market higher. It closed above its 200 day moving average for the first time since early in the year, and even did it with slightly more volume than yesterday. As we said a couple of weeks ago, we’d be more optimistic if there was a little more follow through on these rallies.

JD