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Dow Closes Below 12,000, Again!

|Includes:AMZN, Caterpillar Inc. (CAT), CLF, EQIX, OPLK, POT, RAX, RVBD, TMRK, WDC

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It was another volatile day on the market.  SPX oscillated within a tight range, (about 5 points) between 1295 and 1300.  The Dow continued to test the 12,000 mark, but, once again closed under. 

This morning CAT reported a strong quarter and recorded a new all-time high at $97.79 before closing at $96.63.  We got into CAT Feb 95 calls yesterday at $2.85 and cashed out at the day high at $4 for an overnight gain of +40%.  On Tuesday, I mentioned in my article that "we'll be watching the coals and fertilizers on the long side".  Yesterday, we also got into CLF and POT.  CLF Feb 85 calls gave us an overnight +47% gain.  Last night, POT announced a 3-for-1 stock split last night and raised its dividend.  This morning, POT delivered a strong quarter report and raised guidance.  POT jumped at open and traded as high as $178.7.  We took some profits off for an overnight gain of +95%! (Click HERE to find out more about our published trades)

  • January 27, 2011
  • 07:53 | HappyTrading CAT ($97.77) Sold to Close 02C95 Feb 95 calls, at $4.00 +40%
  • 06:56 | HappyTrading CLF ($87.00) Sold to Close 02C85 Feb 85 calls, at $4.70 +47%
  • 06:50 | HappyTrading POT ($176.00) Sold to Close 02C170 Feb 170 calls, at $9.35 +95%

After the market, AMZN missed its revenue estimate and saw its stock drop 8.6%, after rising +5.17% during the regular session.  SNDK beat its earnings estimates, but, experienced no major changes this evening.  RVBD's 4Q profit was strong; its shares traded up +4.35%.  OPLK shares jumped almost +27% on a super earnings report!  TMRK popped +35.8% as VZ announced a $1.4 billion buyout deal.  In the cloud-computing equipment space, RAX and EQIX also traded higher, up +6.33% and +5.93%, respectively.  Ironically, EQIX was the company that torpedoed the cloud-computing space back in Oct of 2010.  Now, it is climbing back into the $90s.

The Dow was up +4.39 points; SPX added +2.91 points; Nasdaq gained +15.78 points:

Both GLD (gold) and SLV (silver) fell more than 2%.  USO (oil) was also down, 2.47%.  XME (metals and mining) gave back 2.01%.  SOXX (semiconductors) climbed +1.88%.  XLF (financials) gained +0.88%.  FXI (Chinese ADRs) was basically flat.

SPX

SPX added +2.91 points to close at 1299.54.  Its daily MAs and MACD glided higher.

Nasdaq

Nasdaq gained +15.78 points to close at 2755.28, above 2750.  Its daily MAs climbed up, and the MACD was slightly higher.

The market keeps fighting the big benchmarks, Dow 12,000 and SPX 1300, and keeps closing under.  Gold bounced on Wednesday, but, tumbled to a new 3-month low today.  Mining stocks traded down along with gold even though CAT reported a strong quarter.  So far, dip-buyers have been coming in on every pullback.  We'll have to see if the story stays the same.  Financials have been very muted.  If the market were to break out into new heights, I think we'll have to see strength in the financials.  Pay some extra attention to the cloud-computing space tomorrow!

Good night and HappyTrading! ™ (click to see our Facebook Page)

Stocks: CAT, CLF, POT, AMZN, WDC, RVBD, OPLK, TMRK, RAX, EQIX