Since the Sept 1st gap and go from 1060-1065 we’ve had a 120 handle move to 1185. There have been several great set-ups along the, from macro buys to momentum follow-through trades to cash flow day trades. We have seen great participation from most every sector except for financials. At these levels I’m finding it hard to find any set-ups to really sink my teeth into. Trades are still around but as quality and high-percentage.
My experience tells me this type of action can continue with no stiff sell offs until November 3rd-4th which would be the election and highly anticipated Fed announcements. At that time we could be around
1200+ in the S&P and market players could take the opportunity to sell into the ‘excitement’. In the short term, we could see some choppiness the next few days as well to absorb recent gains. Yesterday was a perfect example of some of the strange action we can see as the market is in a tricky area: the “catalysts’ for the market to move higher were JP Morgan Chase & Co. (JPM) and Intel Corporation (INTC), who both reported strong earnings but traded sharply lower yesterday.
Tech
Apple Inc. (AAPL) makes me feel like a proud papa as I’ve been pounding table that we will see 300 in this stock. We are finally here. With options expiration on Friday, Apple Inc. (AAPL) could hover here for a few sessions.
Baidu, Inc. (BIDU) is building a nice upper level wedge. This might be a controlled as 100 would be great spot for option guys heading into Friday. I will watch for big volume in Baidu, Inc. (BIDU) and if I see it, the stock could ignite to the upside. The level that would be my trigger is 101.50-102.50.
Amazon.com, Inc. (AMZN) is holding a nice upper channel after a massive run. Now Amazon.com, Inc. (AMZN) needs some more time to trade in this range of 152-159 before potentially breaking out again.
Google Inc. (GOOG) has been a great calculated trade for us since 485. Now it’s at 545 wtih earnings after the close. We’ve had nice gains in Google Inc. (GOOG) lately and might take some profits into an option play for earnings. I can’t remember the last time we saw a big gap up after earnings. I will sell my 540 and 550 calls and roll the dice on 560’s to risk less.
Yahoo! Inc.(YHOO) is hearing some M&A chatter once again and woke up yesterday. I won’t chase Yahoo! Inc. (YHOO) here, but won’t short it either.
International Business Machines Corp. (IBM) used to be a focus of mine, and this time around I dropped the ball. I loved it last August around 130 and wrote it up right before the market failure, but now it triggered and is at 140ish. I’d take profits here if you enjoyed the move.
Casinos
Wynn Resorts, Limited (WYNN) was a great trade this week as we triggered thru 93-95. At 103, I would just look for quick scalps in Wynn Resorts, Limited (WYNN) not chase any more follow-through.
Las Vegas Sands Corp. (LVS) continues to impress and stair step highe. Like WYNN, I would only trade this with one foot in and out of the door. No macro long here anymore.
MGM Resorts International (MGM) was a big surprise yesterday that hurt some. I took some long on the close around 12 and will look to hold and add for a trade if it can get into gap around 12.55 for a push back to 13. It could take at least a day or so.
SPDR Gold Trust (GLD), our vehicle for trading Gold, held its upper rang and we initiated a new buy yesterday at 132. I just sold most of my size 134.80. Trading Gold continues to work for us.
Solar sector has made a big time move, and it’s time to once again have stocks like LDK Solar Co. Inc. (LDK), Trina Solar Limited (TSL), Solarfun Power Holdings Co., Ltd. (SOLF), ReneSola Ltd. (SOL) and leader First Solar, Inc. (FSLR) firmly on the radar.
Also IPO’s have been great for us and many are still very tradeable. When leading stocks need a rest, some of these little guys see money rotate in. Do your homework with a few of these names as they seem to be heating up again: JinkoSolar Holding Co., Ltd (JKS), MakeMyTrip Limited (MMYT), HiSoft Technology International Limited (HSFT), China New Borun Corp (BORN) and Motricity, Inc (MOTR) to name a few.
