August 07, 2012 at 18:52 PM EDT
Locking In Profit$: SPX, Nasdaq, FSLR, SINA, WYNN, VMW, FAS, PCLN, ESRX, RAX, VVUS, FOSL, SHLD, LULU, RL, BSFT, FFIV, VMW, AAPL, CRM
I have been talking about a "super" rally for over a week.  First, I mentioned it in an article on July 28th.  Then, it was further discussed in last week’s Market Forecast.  After cashing out on a +244% gain on CRUS, the rally was still being set up.  Global markets finally took off on Friday, [...]

I have been talking about a "super" rally for over a week.  First, I mentioned it in an article on July 28th.  Then, it was further discussed in last week’s Market Forecast.  After cashing out on a +244% gain on CRUS, the rally was still being set up.  Global markets finally took off on Friday, starting with the US.

During the past 2 days, we’ve been leisurely locking in profits, including overnight doubles on FSLR and SINA.  WYNN was incredible rallying 10 points in 3 days, giving us an +180% on the weekly 95 calls, and we didn’t even get out on the top (we had too many positions to unload and did not want to be greedy!).  Here are the profits that we took since Monday:

  • 12:09 | HappyTrading AGU ($97.50) Sold to Close 08C95 Aug 95 calls, at $3.10 +24%
  • 11:34 | HappyTrading FSLR ($21.00) Sold to Close 08C18 Aug 18 calls, at $3.05 +126%
  • 08:48 | HappyTrading KLAC ($53.00) Sold to Close 0608C50 Aug 50 calls, at $3.01 +67%
  • 07:26 | Ecstatic Plays SINA ($50.70) Sold to Close 0810C47.5 Aug 48 calls, at $3.50 +138%
  • 07:24 | Ecstatic Plays CAT ($88.25) Sold to Close 08C82.5 Aug 83 calls, at $6.00 +107%
  • 07:08 | Ecstatic Plays WYNN ($101.40) Sold to Close 0810C95 Aug 95 calls, at $6.45 +180%
  • 07:05 | HappyTrading FSLR ($20.18) Sold to Close 08C18 Aug 18 calls, at $2.42 +79%
  • 12:41 | Ecstatic Plays SINA ($49.92) Sold to Close 0810C47.5 Aug 48 calls, at $2.90 +97%
  • 11:18 | HappyTrading VMW ($94.05) Sold to Close 08C90 Aug 90 calls, at $5.10 +70%
  • 11:08 | Ecstatic Plays SINA ($49.05) Sold to Close 0810C47.5 Aug 48 calls, at $2.30 +56%
  • 11:06 | Ecstatic Plays WYNN ($98.50) Sold to Close 0810C95 Aug 95 calls, at $3.95 +72%
  • 07:24 | Ecstatic Plays FAS ($93.59) Sold to Close 0810C90 Aug 90 calls, at $4.65 +52%
  • 07:13 | HappyTrading GOOG ($647.80) Sold to Close 0810C640 Aug 640 calls, at $11.00 +38%

VIX has sunken below 16, although it crept back up a little towards the close today.  If you’re still sitting on the sideline, it might be a good idea to get back into the markets.

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Last night, BSFT beat its earnings estimates and raised its forecast.  Its shares were up over +34% today!  CRM, FFIV, and VMW, which were already moving up with the broader market since Friday, added more to their recent gains!  This morning, FOSL reported surprisingly strong earnings, sending its shares up +31%!  TUMI, also reporting strong sales, surged +23%.  LULU, SHLD and RL traded higher on earnings from FOSL and TUMI; all three look like they are heading higher.

After the market, PCLN slumped more than $100 after missing its estimates and giving disappointing outlook.  PCLN last checked in at just above $580, from today’s close of nearly $680!  ESRX popped higher to $60 after giving strong guidance.  This is all-time high level for ESRX and I think it’ll go higher, perhaps testing $65 soon.  With everything going online and the cloud-space booming, RAX reported a strong quarter, sending its shares up +12%; RAX should test $58 soon.  VVUS popped over +9% today ahead of its earnings report; but, it hardly moved after the report was delivered.

The Dow was up +51.09 points; SPX added +7.12 points; Nasdaq gained +25.95 points:

SOXX (semiconductors) added +2.04%.  XLE (energy) was up +1.5%.  XME (metals and mining) climbed +1.49%.  XLF (financials) managed to crawl higher.

SPX

SPX added +7.12 points to close at 1401.35, above 1400.  The daily MAs and MACD glided up.

Nasdaq

Nasdaq gained +25.95 points to close at 3015.86, above 3000.  Its daily MAs and MACD also went up.

Both SPX and Nasdaq closed above important psychological levels, and VIX stayed below just below 16.  There are still a lot of people not believing in this rally, and they will most likely be chasing this rally higher.  We might see some profit-taking here-and-there, but, this rally has just started.  AAPL, for one, has not really participated.  We locked in a lot of profits during the past 2 days and are back into mostly cash.  Let’s see how the market moves tomorrow, but, I think we’ll see SPX 1420 before any meaningful pullback.

Any downside trades?  Hmmm… PCLN weekly 600 puts would have been nice!  =)  MA looks awfully weak.  LNKD got a quick pullback, but, I wouldn’t bet against it just yet.

Good night and HappyTrading! ™

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