Stocks got off to a strong start today but still managed to spend most of the session in negative territory. The Federal Housing Finance Agency said U.S. home prices fell 0.5% to a six-year low in July and that helped convince investors to take some profits off of the table. The government also announced that domestic prices are down a year-over-year 3.3% – meaning homes in July were priced on par with homes in September 2004.
The SPX did manage to stay above the recent breakout level of 1131 but the level was tested several times today. Tomorrow we will get jobless claims number and that will help shape the session. Volume remains on the light side and the past two days should be viewed as healthy consolidation after a nice rally.
We remain cautiously optimistic but you have to be prepared for a pullback. If 1131 gives way, we could see the index retrace all the way back to 1117.
Weekly Economic Calendar:
Thursday
- The report on new jobless claims will be released. Later in the morning, we’ll learn about how many existing homes sold in August, and the Conference Board will unveil its leading indicators index for August. Rite Aid Corp. (RAD), Nike Inc. (NKE), and Saba Software Inc. (SABA) will report earnings.
Friday
- Durable goods orders for August and new homes sales for August will be released. KB Home (KBH) will release earnings.
New Trade Idea:
Buy Macys (M) October 22 Put @ $0.85 or Better:
The retailers look like they may have gotten a bit ahead of themselves and several are beginning to rollover. We think Macys will follow soon. Use $1.50 as a target and $0.55 as a mental stop.
Buy Research in Motion (RIMM) October 47.5 Put @ $1.95 or Better:
RIMM has been very volatile over the past few sessions but despite its best efforts, the stock has not been able to get too far off of its lows. We think we’ll see volume wane and the stock rollover during the next several sessions. Use $3.50 as a target and $1.00 as a mental stop loss.
Open Positions:
Ivanhoe Mines (IVN) October 20 calls @ $1.45:
We hit our target for a 45% profit.
Whirlpool (WHR) October 75 put @ $3.65:
This play has been closed.
Wells Fargo (WFC) October 26 Call @ $1.20:
This play triggered our mental stop-loss. We will look to exit tomorrow.
Sandisk (SNDK) October 39 Call @ $2.55:
This play has been closed.
TEN Exclusive: Options Update – 9/22/10 is an article from: 
