Thursday, June 19, 2008

State of the Market - Early Edition - 6/19/08

I will be gone for most of the day - going to see a friend and getting the kids together - so I don't know if I will have the normal summary out until late tonight. Here are my thoughts so far...

So far things have been quite choppy in the market, typical of options week. Stocks started with a slight gap higher due to lower oil prices and a better than expected jobless claims number, but this gap couldn't hold and traders quickly started selling stocks once again. The selling wasn't intense, however, and stocks found a bottom around 10:00. They rallied from there and broke to new intraday highs, at least on the Nasdaq, but fell right back down from there. Right now, things just look choppy - perhaps a bigger move will materialize this afternoon.

I was stopped out of SSN at $4.95 this morning for a 12% gain - not bad but it ran as high as $6.00 so I once again missed a big part of the gain. I was also stopped out of FPP($7.60) for a 6.7% gain, which isn't bad either. They fell back down soon after the open. These stocks are very difficult to trade perfectly, so perhaps I should be happy with what I got. My ANGO short which I've had for about two weeks had a trailing stop on it, and when it gapped down today, it was hit on the bounce. I made around 11% on this short. These trades did finally put my main account to new all-time highs, which is nice, and took my return so far this year to over 40%, which I am happy with. We'll see if I can stay there - OMNI and NGAS have to act right for this to happen. I am kind of expecting to see I am out of these two when I get home - hopefully not, but just a hunch. I took FCSX as a short this morning @ $39.09 - I just think the chart is setup for a drop here, perhaps a large one. I added a little more at $38.25 later in the morning.

Some random thoughts:
  • I really want to short JRCC, but am doing my best to stay away. By my calculations, it is almost 300% above its 200 day moving average (if it gets to the mid 60's, it will be). Typically, when a stock is 100-150% above that moving average, it corrects, via IBD. This is due to have a pretty violent pullback in my opinion. If it gets up to $65 or higher, I may take a shot. Maybe it just rests here too - that's why I will likely stay away. Based on what I see right now, however, it could be putting in a major reversal bar.
  • I am seeing quite a few energy names put in reversals today that look toppy. Check out GDP, NCOC, ICO, FDG, CHK, MEE, PXP, and ANR. We've seen these before though - that's the only caveat. This could just be another short-term pullback, which they are certainly entitled to, or could be a more important top. I am not going to guess which one it will be.
  • Not very impressed with the market action so far - two down days in a row, oil is down as well today, and they really can't do much of anything. Maybe a stronger bounce will come this afternoon. I used to think that if energy starts topping here, then that money has to go somewhere. Could it be however that when energy tops, the market just falls straight down, as this was the only sector holding things up so long?? Interesting question.
  • Financials are still weak here and might indeed break through the March lows today. They are very close, but I expected a stronger bounce after yesterday. My lack of patience will probably cost me once again in terms of getting rid of SKF too soon.
  • I still hate PCLN. Hate it.
  • I also hate UA - stopped out of this as a short about 9% ago.
Best of luck the rest of today. I will try to get something up tonight, but with tomorrow being the official options day, it might be best to not make too many moves anyway.

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