December 06, 2012 at 00:36 AM EST
Falling Apple Drags Down Nasdaq! SPX, Nasdaq, AAPL, CLF, WLT, ANR, BTU, JOY, CAT, CMI, NFLX
Well, this market is still being whipped around by politicians speaking about the "fiscal cliff".  Stocks were strong on Monday morning, but, quickly faded.  Stocks have many excuses to drop, but, buyers seem to be ready to come in on every drop.  This morning, SPX fell below 1400 (in my Market Forecast this weekend, we [...]

Well, this market is still being whipped around by politicians speaking about the "fiscal cliff".  Stocks were strong on Monday morning, but, quickly faded.  Stocks have many excuses to drop, but, buyers seem to be ready to come in on every drop.  This morning, SPX fell below 1400 (in my Market Forecast this weekend, we talked about 1400 being the immediate support for SPX), and buyers came in again!  The strong performance by the Chinese market (up +3%) overnight encouraged buying in mining stocks.  Coal stocks had been trying very hard to bounce off of their recent bottoms.  CLF, WLT, ANR, and BTU had all been climbing higher.  Further, rumors had been circulating about WLT being in talks to be acquired.  WLT was up +6.56% during the regular session today and popped another +4.17% after the market.  CMI vaulted +4.11%; CAT added +2.25%; JOY added +1.91%.

On the other hand, AAPL had a horrible day!  It was falling, falling, and falling like there was no bottom!  Down $37, or 6.43%, in one day!  We did pick up some intraday puts.  In the morning, I commented in the Trading Room:
December 5, 2012 7:32 AM
AAPL
coming down to test $550, might see $540

Sure enough, AAPL came down and closed at $538.79.

  • 07:48 | Ecstatic Plays AAPL ($550.00) Sold to Close 1207P555 Dec 555 put, at $11.30 +26%
  • 07:42 | Ecstatic Plays AAPL ($549.00) Sold to Close 1207P555 Dec 555 put, at $12.35 +37%

Other than AAPL, NFLX saw some crazy moves this week.  On Monday, NFLX fell all day.  We did some intraday trades on NFLX puts.  Then, on Tuesday, it went from $75 to $88, on a deal with DIS.  So, we played some intraday calls!

  • 12:20 | HappyTrading NFLX ($87.50) Sold to Close 12C85 Dec 85 calls, at $6.00 +36%
  • 12:09 | HappyTrading NFLX ($86.50) Sold to Close 12C85 Dec 85 calls, at $5.10 +16%
  • 12:42 | Ecstatic Plays NFLX ($76.18) Sold to Close 1207P80 Dec 80 put, at $4.50 +38%

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The Dow was up +82.71 points; SPX added +2.23 points; Nasdaq fell 22.99 points:

UNG (natural gas) popped +3.88%.  XME (metals and mining) added +0.74%.  XLF (financials) gained +1.21%.  FXI (Chinese ADRs) popped +3%.  GLD (gold) and SLV (silver) stayed weak.  GDX (gold miners) fell 2.78%.

SPX

SPX added +2.23 points to close at 1409.28.  It closed just above its 10-day MA.  The MACD was slightly changed.

Nasdaq

Nasdaq fell 22.99 points to close at 2973.7.  It closed below its 10-day MA.  The MACD was flat.

Without solid progress on the "fiscal cliff", this market just doesn’t seem to be able more forward.  Technically speaking, things are starting to slip.  AAPL’s big drop certainly doesn’t help.  The next couple of days could be very important.  Tomorrow and Friday, we’ll get the latest data on the jobs front.  Big move could be coming by the week’s end, but, it’s hard to say which way.  Let’s be patient and keep lots of cash!

Good night and HappyTrading! ™

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