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Energy Stocks Lead The Market Lower: SPX, Nasdaq, AA, APA, IOC, EOG, HES, WLT, CLF, BTU, MCP, REE, RVBD, FFIV, CRM, VMW, JPM

|Includes:Alcoa, Inc. (AA), APA, CLF, CRM, EOG, FFIV, HES, IOC, JPM, REE, RVBD, VMW, WLT

Energy stocks started to sell off yesterday afternoon, as I alerted in the Trading Room yesterday:
April 11, 2011 11:46 AM
energy stocks selling off...

Last night, AA reported earnings that missed sales estimates.  AA shares fell more than 6% today.  Today, Goldman Sachs called a top on the recent rising oil.  Energy stocks gapped down at open and swooped further as the day went.  IOC was downgraded today and tumbled 5% on top of yesterday's 4.2% drop!  APA (-3.05%), EOG (-3.05%), HES (-1.8%) also continued to fall.  Coal stocks pulled back substantially as well:  WLT -3.22% (down more than $10 in 2 days), CLF -3.75%, BTU -3.15%.  On the other hand, rare earth metals managed to stay strong.  REE closed up +4.17% and MCP stayed above $71.

Since last week, I became increasingly cautious about the market and started to look for pullbacks, as further discussed in this week's Market Forecast and Sector Watch.  We got into some downside trades late last week, and took profits on Monday and today, including a +81% trade on NFLX puts, and, we added some SPY puts yesterday before the market close:

  • April 12, 2011
  • 07:25 | HappyTrading SPY ($131.23) Sold to Close 04P132 Apr 132 puts, at $1.34 +58%
  • 07:00 | HappyTrading SPY ($131.45) Sold to Close 04P132 Apr 132 puts, at $1.20 +41%
  • April 11, 2011
  • 07:32 | HappyTrading NFLX ($227.30) Sold to Close 04P235 Apr 235 puts, at $9.30 +81%
  • 07:26 | HappyTrading NFLX ($228.80) Sold to Close 04P235 Apr 235 puts, at $8.50 +65%

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After the market, RVBD pre-announced its earnings to the up-side.  It shares popped +13.8% this evening.  Related stocks, such as CRM, VMW, FFIV, also went up.

The Dow was down 117.53 points; SPX fell 10.30 points; Nasdaq dropped 26.72 points:

XME (metals and mining) was down 2.18%.  OIH (oil services) fell 2.79%.  USO (oil) dropped 3.07%.  XLE (energy) tumbled 3.09%.  SOXX (semiconductors) lost 2.09%.  FXI (Chinese ADRs) slipped 1.16%.

SPX

SPX fell 10.3 points to close at 1314.16.  Its daily MAs flattened and the MACD curved down.

Nasdaq

Nasdaq lost 26.72 points to close at 2744.79.  It closed above its 30-day MA.  The MACD went down.

Both SPX and Nasdaq fell fast, but, both managed to stay above their respective 30-day MAs.  VIX tested 18, but, only barely closed above 17.  As discussed in Market Forecast this weekend, dip-buyers are still ready to jump in on quick pullbacks.  Tomorrow morning, JPM will report its earnings, which is expected to be good.  With RVBD's upbeat pre-announcement, cloud-computing stocks should see some buyers rushing in.  VMW has been particularly strong these past few days.  We should see some bounces tomorrow morning, especially if JPM delivers a good report.

Good night and HappyTrading! ™

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Stocks: AA, APA, IOC, EOG, HES, WLT, CLF, BTUIQ, REE, RVBD, FFIV, CRM, VMW, JPM