Subscribe via Email (FREE) The market traded flat today, as Fed kept rates at historic lows. However, we saw some big downside moves on recent highflyers. Starting yesterday, we were trading puts. In the Trading Room, I was calling out downside plays:
December 13, 2010 11:37 AM
CMG
coming down...
December 13, 2010 11:47 AM
CMG
230 puts
December 13, 2010 11:48 AM
NFLX
plummeting
December 13, 2010 11:50 AM
NFLX
185 puts
December 13, 2010 12:31 PM
CMG
those 230 puts were just under $3, now $5!
NFLX
same as those 185 puts!
December 13, 2010 12:44 PM
NFLX
those puts just doubled!
December 13, 2010 12:50 PM
CMG
so have these puts!
The CMG Dec 230 puts went from around $3 to this morning's high of $9.86. The NFLX 185 puts recorded a high of $9.4 this morning.
We also cashed in on quite a few published trades, all of them were downside plays:
December 14, 2010
12:41 | HappyTrading NFLX ($177.50) Sold to Close 12P180 Dec 180 put, at $5.15 +47%
12:25 | HappyTrading LVS ($43.50) Sold to Close 12P46 Dec 46 put, at $2.70 +108%
11:43 | HappyTrading LVS ($43.50) Sold to Close 12P46 Dec 46 put, at $2.67 +105%
10:17 | HappyTrading NFLX ($178.90) Sold to Close 12P180 Dec 180 put, at $4.55 +30%
07:10 | HappyTrading CRM ($141.70) Sold to Close 12P145 Dec 145 put, at $4.55 +104%
We got an overnight double on the CRM Dec 145 puts, and another double on LVS 46 puts. NFLX continued to fall this morning. So, we went in on a lower strike with 180 puts, and cashed on an intraday +47% gain.
Besides NFLX, CMG, and CRM, FFIV was also weak, losing more than $5 today. SOHU and SINA have both been very strong since September. During these two days, SOHU has fallen about $10 and SINA about $8. VECO received a downgrade from Citi Investment Research. VECO shares tumbled more than 15% today. CREE has climbed from $50 in November to yesterday's high of $72.85! It pulled back $3 on VECO's downgrade.
This morning, BBY reported a disappointing quarter. Its shares dropped 14.82%.
The Dow was up +47.98 points; SPX added +1.13 points; Nasdaq gained +2.81 points:
BTK (biotechs) added +1.23%, standing out among the weak market. Most sectors were flat to slightly red. UNG (natural gas) lost 3.14%. FXI (Chinese ADRs) fell 0.21%.
SPX
SPX added +1.13 points to close at 1241.59. Its daily MAs and MACD glided up.
Nasdaq
Nasdaq gained +2.81 points to close at 2627.72. Its daily MAs and MACD were also slightly higher.
The market did not react much to Fed's announcement, as there were no surprises. Today's trading actions were very similar to yesterday's, as we saw the market falter near the close. VIX rose slightly, but, stayed under 18. The market has basically rallied for 2 weeks straight. It is no surprise to see some profit-taking. We were expecting this, as discussed in the Market Forecast and Sector Watch this weekend. This is why we cashed out our trades on the longside on Monday morning and switched to play the downside since Monday afternoon. After 2 days of quick downside plays, we are again back into mostly cash. Mining and energy stocks hardly budged these past 2 days. If these stocks start to pullback, we could see the market lose some altitude.
Good night and HappyTrading! ™ 
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