Before the Open (Jan 20)

Posted on by Jason Leavitt

Good morning. Happy Friday. Happy Options Expiration Day.
The Asian/Pacific markets closed mostly up. China, Japan, Singapore and South Korea rallied more than 1%. Europe is currently down across the board. There are no 1% losers. Futures here in the States point towards a down open for the cash market.

The dollar is up. Oil and copper are down. Gold and silver are down.
Options expire today. This day every month has been an irrelevant event for a long time, and I don’t expect today to be any different.
Yesterday after the close MSFT, IBM and INTC moved up after releasing earnings. GOOG got hit hard. This morning GE is down on earnings.
The market keeps going and going and going, so I’ve felt like a broken record. The S&P is up 18 of 23 days – an incredible run which is obviously not sustainable. You can’t fight the trend, but I still don’t think it’s wise to throw all caution to the wind and be aggressively long. I’d rather miss a few bucks in profits than lose a lot by repeatedly guessing tops.
All the indexes have taken out their October highs; the NDX is sitting at a 10+ year high.
Negative divergences I pointed out last week remain in place. Prices have made higher highs while the AD line and AD volume have made lower highs, and the PC ratio continues to move down. These indicators will need to be invalidated soon or else we will get a stiff pullback…but obviously guessing when such a pullback will play out isn’t wise.
We’ve had lots of stocks hit their targets recently. Be a trader and do the prudent thing…take profits or at least partial profit and trail a stop very close. More after the open.
headlines at Yahoo Finance
headlines at MarketWatch
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Jan 20)”

    1. Many global ETFs are overbought. A correction in the market will be healthy allowing other investors to get in. It will be interesting to watch gold and heavily shorted stocks if supports go broke.
      MyWealthyOptions.blogspot.com

  3. No, a pullback then continuation.
    Based on yesterdays and past earnings response it seems money is moving to the old standards intc msft ibm. As well there are new younger issues that are still strong. But GOOG took a dump (I got out of BIDU for a loss now stalking it again as well as some other china stocks).
    We broke the 10yr high yesterday on the nsdq100 which holds little in the way of financials (no garbage) so I am bullish but paranoid still. Keep in mind that the nsdq100 did this prior to dumping in july last yr http://finviz.com/futures_charts.ashx?t=NQ&p=w1
    Also indicators are giving overbought signals but they can remains for long periods of time.
    But please do your own DD.

  4. NDX 100 made a march 09 top in aug 2011–later than all others
    we then had a so called wave 1 impulsive down
    then a corrective 2 up to a few points above wave 1
    so is this a double top for the start of wave 1 down again or wave 3
    my inds are showing it as a massive distribution
    –the ndx is controled by the german dax which is showing a massive distribution
    lower double top as is the london ftse,which controles the dji

  6. A failure and reversal pattern at SPX 1313 from today’s 1309 low, may be a low risk shorting opportunity with a close stop above yesterday’s high above 1315.

    1. DOW should face stiff resistance around 12750. I am cautiously optimistic on the market.
      Entering into next week, my portfolio is balanced with two calls (SPY), two puts (VIX and FXI) and one position in a gold-related stock. If VIX is an indicator of fear, then it seems bulls are in control, but the market will not gain or drop significantly. Calendar alerts with weekly leg will do well, next week, as long as market stay within -3% to +1%. As such, I do not trust the options’ expiration week, so a churn in the market is not ruled out.
      http://mywealthyoptions.blogspot.com/

  9. This reminds me some what of the grind up followed by chop down of the mid 2000s and decades before. Great for short and longer swing trades. Still net long & paranoid, still compounding money.
    Best option for Greece is a controlled default. Russia and Argentina did in the past. After those defaults we flourished.
    As for debt, as long as it can serviced or in the case of Greece written off, no problem. Debt is good. It’s only bad when the now inept / perhaps crooked rating agencies, media and politicians pump it up to nonsensical blogging extremes. Also bad for speculators (bond holders) who bet wrong and now want a get out of jail card. – you know what you can do with yourself ;).
    And if world governments can pullback their misguided military adventures that’s a huge chunk of the debt to be retired. Obama has it right, make like the Israeli MOSAD use small inventive weapons systems and specialized forces to hunt down and kill the snakes and their spawn at every opportunity – if they come out with a video game of that I’ll buy it!
    As for the financials, the big banks need to be broken up (separation of underwriting, brokerage and S&L). They need to be regulated. They are just a utility not a true catalyst for business enterprise, never have been. Are they really needed to for a healthy market? Why did BIDU AAPL and 100s of other lesser known stocks have their greatest growth (+1000%) in the 2009-2011 time frame while the financials and the indices languished?
    Maybe, just maybe, world governments and the real business community will come to its senses and will allow, encourage, the above to happen.
    As for the articulate and persuasive perma bull and perma bear pundits and gurus, that distracts us from real opportunities, they should go do something biologically impossible with themselves. It will get them out of the gene pool ;).
    Nasdaq100 still steady, ready to lift or slump. Eyes on the charts, filtering the noise, finger on the trigger.
    All the best and good trading.

  10. Raymond,
    Agree with your views and insights. Thanks for you inputs.
    Jason’s comments and analysis are very informative also.
    I don’t post on financial matters because I’m still a novice. I appreciate all the postings by all those who do.
    Thanks all,

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