MyHappyTrading.com's  Instablog

Happy Thanksgiving!

The market managed a modest gain as the dollar dropped and gold went to a new high, yet again!  Gold finished above $1190/ounce!!  We took things easy on Wednesday to get ready for Thanksgiving.  Most sectors closed higher and VIX came down to test 20.  It managed to bounce a bit and closed basically unchanged.  Commodity sectors were strong today as gold and gold miners led the rally.  Even energy stocks bounced as oil came back up a bit.  Still, it seems like the financials remain the key that's holding the market from breaking higher. 

The market hopped out of the gate this morning on some "happy feet" as home sales jumped in October to their highest level in more than 2-1/2 years!  In addition, gold continued to make new record highs, trading nearly to $1175/ounce intraday.  As gold went higher, gold miners followed up, which in turn inspired other mining sticks to rally.  The dollar traded down accordingly.  These were enough to render another episode of "Mutual-Fund Monday" buying, as fund managers resumed chasing performance and tried to get their cash into positions.

We took more profits this morning on GOOG and MOS.  The GOOG trade was opened back on Nov. 4 when the stock was trading at $540.  Today, we took more profits on our Dec 570 calls for +177% and +201% gain:

November 23, 2009 
07:32 | HappyTrading GOOG ($585.00) Sold to Close GOPLN Dec 570 calls, at $22.00 +201%
06:54 | HappyTrading GOOG ($582.30) Sold to Close GOPLN Dec 570 calls, at $20.20 +177%

Last weekend, in my Market Forecast, I wrote,

"For the new week, a strong move to open the week should push the market above SPX 1100.  If the market does close above SPX 1100, we should see a new bullish formation on SPX's daily chart.  We should see new buyers rush into the market, if VIX goes below 23 (staying below 23 would invite the buyers to stay).  Energy sectors were relatively weak last week and we'll need to see some renewed strength in them to keep the market above SPX 1100.  Although financials did make up some grounds, they'll need to be much stronger to help push the market higher."

Once again, things happened pretty much as forecasted.  On Monday, the market did get a strong open and the market closed above SPX 1100.  We locked in on some good profits.  Both the energy and financial sectors participated in the rally.  VIX closed below 23.  On Tuesday, the broader market traded flat, but, coal and agriculture stocks rallied higher.  On Wednesday, gold continued to push higher and we cashed out the rest of our December GLD calls.  However, on Thursday, the chip sector was downgraded and led the market lower.  DELL missed its earnings estimates after the market.  Both the financial and energy sectors turned weak.  On Friday (see Weekly Wrap of our published trades), the financials and techs stayed weak and the market retreated to close below SPX 1100. 

We wrapped up another week of big winners.  Every closed trade was in the GR$$N!  We do have 2 trades that expired, which will be reported in the Monthly Wrap-Up for November.  Record gold was once again the big news, and we captured the trade with options on GLD.  Here are the closed trades this week (since almost every trade had over +50% gain, the ones with over +100% gain are highlighted):

November 19, 2009
07:02 | HappyTrading TSL ($44.15) Sold to Close TSLKR Nov 37 calls, at $7.00 +192%

November 18, 2009
12:39 | HappyTrading GOOG ($575.70) Sold to Close GOPKN Nov 570 calls, at $7.00 +15%
12:19 | HappyTrading TSL ($42.70) Sold to Close TSLKR Nov 37 calls, at $6.00 +150%
11:36 | HappyTrading MON ($79.95) Sold to Close MONLO Dec 75 calls, at $6.20 +55%
07:20 | HappyTrading GLD ($112.45) Sold to Close GCZLA Dec 105 calls, at $8.00 +191%
06:54 | HappyTrading MON ($79.75) Sold to Close MONLO Dec 75 calls, at $6.00 +50%

November 16, 2009
10:45 | HappyTrading GLD ($111.76) Sold to Close GCZLA Dec 105 calls, at $7.50 +173%
10:08 | HappyTrading GLD ($111.50) Sold to Close GCZLA Dec 105 calls, at $7.20 +162%
08:06 | HappyTrading TSL ($41.60) Sold to Close TSLKR Nov 37 calls, at $5.00 +108%
07:35 | HappyTrading ISRG ($280.00) Sold to Close AXVKU Nov 270 calls, at $11.00 +72%
07:24 | HappyTrading GLD ($111.20) Sold to Close GCZLA Dec 105 calls, at $7.00 +155%
07:03 | HappyTrading ISRG ($278.69) Sold to Close AXVKU Nov 270 calls, at $10.00 +56%

These certainly make our members very happy!
angar November 20, 2009 1:03 PM
Happy - Great week indeed.. Thanks for BIG winners this week. Very happy to be part of HAPPY community.

The market started out weak on an inline unemployment report.  The chip makers led the market lower as Bank of America downgraded both INTC and TXN.  INTC lost 4.08% while TXN dropped 3.38%.  If you read the above linked article, you can really get a sense that it is a "ratings game".  The timing was just too perfect as the semiconductor index (SOXX) had recently risen above 300 and was about to turn bullish (above 350, SOXX will have risen above a downward trend that started back in Oct 2007).  Elsewhere, the Chinese solar stocks were strong as both TSL and STP reported solid earnings.  TSL jumped +6.6% and STP finished +5.96% higher.  We cashed out the rest of our position in TSL for a +192% gain:

November 19, 2009
07:02 | HappyTrading TSL ($44.15) Sold to Close TSLKR Nov 37 calls, at $7.00 +192%

We've been locking in profits all weak and are now back to mostly cash. 

The market was yet again flat today, closing a bit on the downside.  Gold, however, jumped in the morning a attained a new record high!  This weekend, in my Market Forecast & Sector Watch, I said,

"GLD is now in uncharted territory, with little resistance.  If the momentum is strong, GLD could run up fast and perhaps reach $113.  We could see gold testing $1150 this week."

This is exactly what happened today.  GLD reached a high of $113.09 and closed at $112.25.  Gold went up to $1153/ounce and pulled back.  This was our cue to take the last portion of our GLD Dec calls off the table for a nice +191%: