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Profitting From The Big Down Day! SPX, Nasdaq, AAPL, GOOG, PCLN, GS, IBM, WLT, CLF, WYNN, IOC, GLD, SLV

|Includes:Apple Inc. (AAPL), CLF, GLD, GOOG, GS, IBM, IOC, PCLN, SLV, WLT, WYNN

Yesterday, in our Trading Room, I analyzed the market situation for our members:

August 3, 2011 11:40 AM
tested 1240 this morning; there's a real danger for the market to fall lower. if 1240 breaks down, this market could go straight to 1200!!

This was exactly what happened today!  The market fell to SPX 1240 in the first 30 minutes of trading, and soon broke down lower.  At SPX 1220, some buyers came in, but, it was just a matter of time to hit 1200.  We took some profits off our downside plays:

  • August 04, 2011
  • 12:40 | HappyTrading CLF ($79.30) Sold to Close 08P80 Aug 80 put, at $4.00 +33%
  • 12:39 | HappyTrading WYNN ($142.00) Sold to Close 08P145 Aug 145 put, at $7.20 +64%
  • 09:16 | HappyTrading IOC ($60.00) Sold to Close 08P60 Aug 60 put, at $3.00 +59%

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There was not much discrimincation in the selling today.  Even GOOG and AAPL fell hard.  GOOG as down more than $23, or 3.93%, while AAPL tumbled $15.2, or 3.87%.  PCLN was down more than $40 intraday, but, bounced back after reporting a strong quarter in after-hours.  Other big names got hammered as well:  GS was down 4.43% and IBM lost 4.11%.  WLT plummeted 30% (more than $32!) after reporting a disappointing quarter last night!

Many of our members were looking for a market rebound since Monday.  But, I hoped I changed their minds in the Trading Room and from my Tuesday night's article.  It is very important to come into the Trading Room and read the comments of all the members.  Even if you come in after the market, you can get a really good feel for what had happened during the day and can prepare you for the day tomorrow.  On a day like this, one comment in the Trading Room could have saved you a lot of money, and/or make you a lot of money!

The Dow was down 512.76 points; SPX lost 60.27 points; Nasdaq tumbled 136.68 points:

Wow, every sector was in the red!!  XME (metals and mining) plummeted 9.17%!  USO (oil) was down 6% and OIH (oil services) lost 8.7%.  XLF (financials) dropped 5.06%.  FDN (internet) and SOXX (semiconductors) both fell nearly 6%.  GLD (gold) and SLV (silver) both ended lower as well.


SPX dropped 60.27 points to close at 1200.07.  Its daily MAs and MACD turned down sharply.


Nasdaq tumbled 136.68 points to close at 2556.39.  Its daily MAs and MACD also went lower.

So, where do we go from here?  Well, the market is now oversold.  Both Nasdaq and SPX were pushed straight to their support levels.  Depending on how bad the unemployment report is tomorrow, we may see some bounces here-and-there.  But, again, buyers will not likely to commit.  VIX popped all the way to 32 and closed at 31.66.  It is toppy.  So, I think we'll see a mixed market tomorrow.  You'll probably see big traders making some big trades since it is Friday and weekly options will expire.  The downside momentum is too big right now and it will not be too easily turned.  Gold made a new all-time high today, before some profit-taking took place as the market plummeted.  Silver fell hard.  SLV (silver ETF) went above $41, but, closed down 7.25% at $37.61.  It seems like silver is just too volatile.  If you play precious metals, stick with GLD (gold ETF) for now.  We could see $1700 gold within a month!

Good night and HappyTrading! ™

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