MyHappyTrading's  Instablog

Last night, Asian markets took huge drops after manufacturing data from China came out weaker than expected. Japan's Nikkei tumbled more than 7%! This morning, SPX gapped down 20 points at open, but, buyers came in after about an hour into the trading. There were some big swings! For instance, PCLN traded as low as $784 at open and ended the day above $803, almost a $20 swing. Energy stocks such as APC, APC, and TSO all bounced right back before the close.

Gold and silver bounced as well. GLD gained +2% and could turn bullish.

HPQ popped more than +17% as the company raised its forecast. We picked up HPQ calls yesterday just before the close and scored an overnight +113% winner. We took some profits today and also cut some losses:

• 12:51 | HappyTrading TSLA ($92.70) Sold to Close 0531C95 May 95 calls, at $2.70 +6%
• 07:01 | HappyTrading MOS ($58.60) Sold to Close 06C62.5 Jun 63 calls, at $0.45 -72%
• 06:54 | HappyTrading VIX ($15.00) Sold to Close 0619C15 Jun 15 calls, at $2.00 +38%
• 06:53 | HappyTrading HPQ ($23.80) Sold to Close 06C21 May 21 calls, at $2.80 +115%

The Dow ended down 12.67 points; SPX slid 4.84 points; Nasdaq was down just 3.88 points. Well, in this uncharted territory, we are now finally establishing some resistance and support levels. In my Market Forecast this weekend, I said, "Technically speaking, things are toppy. We have to be careful here. On the downside, the nearest support is between SPX 1640 and 1630." Well, today the market tested the support and buyers came right back in. The resistance level now is SPX 1680.

I think we'll start seeing some volatile days. VIX tested 15 today, and we took some of our VIX calls off the table. It is amazing how strong this market is. Lots of money is still trying to come in. Energy stocks are getting stronger. With a nice forecast from HPQ, techs should draw in more buyers. WDC and STX were strong today. MRVL reported a solid quarter after the market today and traded +6.54% higher in after-hours.

We haven't been trading a whole lot because things are technically overbought. With a market holiday on Monday for Memorial Day, let's take things easy until next Tuesday!

Good night and HappyTrading! ™

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Stocks popped for a new leg up today, pushing SPX to close above 1650! Financials led the rally: GS +3.27%; MA +2.49%; AIG +3.23%. Recent high flyers include TSLA, which went from $55-and-change to today's high of $97.12 in just 4 trading sessions! GOOG has also been ramping up non-stop, almost hitting $890 today. 3D-printing stocks have also faired well: both DDD and SSYS made new all-time highs today!

So, how high can this market go without a respite?! Well, I think the market is about to take one. SPX 1650 could be a psychological barrier, one of those "whole number" levels! Technically speaking, the market is toppy. I would really find it unlikely to go push higher without some consolidation. If it continues to push higher without a break, it'll have to go parabolic! This bull market, though, is unlike the tech boom back in 2000. This time, the Dow and SPX are leading the way, which means the rally is broadly based. In fact, techs, so far, have been lagging!

One group that really took off today was the education and training services. ESI vaulted almost +18%! APOL gained more than +9%. COCO popped +8.46%. DV added +5.49%. Let's keep our eyes on this group. I think a lot of shorts will need to cover their positions in these stocks!

We didn't chase the market today. We'll see how the market does tomorrow. If the market keeps going, I wouldn't complain if this rally turns parabolically higher!

Good night and HappyTrading! ™

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Last weekend, in my Market Forecast, I wrote:

"For the new week, we should see the markets glide higher. I wonder if we could see the type of rise that Nasdaq had in 2000. Both SPX and the Dow are in uncharted territory. So, we'll have to watch the levels in the next couple of weeks to see where the resistances will appear. On the downside 1600 should now be the initial support."

Well, indeed, the market did glide higher. There were some stutters on Thursday and Friday, but, buyers came in at every weakness. The market closed on a strong note on Friday. We also enjoyed a nice week with mostly winning trades.

For the week, the Dow was up +144.53 points; SPX added +19.28 points; Nasdaq gained +57.95 points. As the dollar popped higher, Gold took a quick drop, trading below $1440/ounce. Oil was little changed, staying above $95/barrel. At the time of this writing, Asian markets were mixed. Japan's Nikkei was rising to a new all-time high as yen fell further against the dollar. Here's how the US markets looked after Friday's close:

SPX

On Friday, SPX added +7.03 points to close at 1633.7. It closed above 1630. Its daily MAs and MACD went up.

Nasdaq

Nasdaq gained +27.41 points to close at 3436.58. Its daily MAs and MACD also pushed higher.

Buyers finally started to move into techs. VIX tried to rise, but, closed the week pretty much flat. For the new week...

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