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Market Pulls Back On Jobs Data

|Includes:AAPL, ABX, AMZN, Las Vegas Sands Corp. (LVS), NFLX, NKE, PBR, RHT, SPWR, TIBX

On Tuesday, in my evening article, I said, "VIX came back up to close above 22 today.  So, we'll have to be a little more cautious."  In addition, in our Trading Room, I told our members:

September 21, 2010 8:32 AM
market
can see a quick pullback to test 1120-1125 in the next couple of days...

The market opened lower today, disappointed by a jump in unemployment claims.  Some buyers came in to buy the dip, but, the market could not hang on to the gains and profit-taking accelerated into the close.  SPX did indeed come down to the range that I was looking for, with a day low at 1122.79 and closing at 1124.83.

We took a couple of winning trades off the table just in time:

10:37 | HappyTrading ABX ($47.23) Sold to Close 10C45 Oct 45 calls, at $2.77 +16%
10:32 | HappyTrading LVS ($33.34) Sold to Close 10C32 Oct 32 calls, at $2.30 +17%

Soon after we closed these trades on the call side, the market started to drop.  LVS, for instance, was trading at $33.34 when our trade was closed.  LVS ended at $31.99, down $1.35 after we exited.  Those Oct 32 calls closed at $1.48 today.

NFLX has just been on fire!  Rising from around $140 on Monday to an intraday high of $163.72 (a new all-time high) today.  Even with the market pullback, it still managed to close above $160.  Not only is NFLX going international, expanding into Canada, Blockbuster's demise also helped to drive the NFLX's stock higher.  We were trading the NFLX weekly calls in the Trading Room as a member alerted on Tuesday:

MauraK September 21, 2010 6:49 AM
NFLX moving up again

Some of us got into the Sept 24 145 weekly calls.  I cashed out early on Wednesday morning with a +102% gain, from $4.25 to $8.6:

MauraK did even better with a +213% profit:
September 22, 2010 1:01 PM
Just sold my last NFLX calls @11.90 , in @ 3.80 yestertday...looks like it can still go higher

These Sept 24 145 weekly calls went as high as $18.17 today!!

This morning, RHT delivered a strong quarter with a better-than-expected guidance.  RHT went up +9.03%.  SPWRA was selected to build a solar park in Delaware, sending its shares up more than +10%.  PBR's share offering was reported to be oversubscribed by twice the available amount, potentially raising $79 billion.  PBR shares went up +2.54%.  After the market, TIBX reported a quarterly earnings of 17 cents beating the estimate by 2 cents.  TIBX jumped more than +9% on the news.  NKE also had a strong quarter, with earnings up +9% from last year.  Its shares rose nearly $4 in after-market.

The Dow finished down 76.89 points; SPX slipped 9.45 points; Nasdaq dropped 7.47 points:

XME (metals and mining) fell 1.26%.  XLF (financials) lost 1.93%.  USO (oil) and UNG (natural gas) both closed in the green.  OIH (oil services) and XLE (energy), however, stayed in the red.  SOXX (semiconductors) bounced a bit.  FXI (Chinese ADRs) slid 0.76%.

SPX

SPX fell 945 points to close at 1124.83.  It closed at its 10-day MA.  The MACD went down.

Nasdaq

Nasdaq dropped 7.47 points to close at 2327.08, still above its 10-day MA.  The MACD flattened.

The rally that started in September has been fast and furious.  Tech leaders such as AMZN and AAPL kept on making new all-time highs with AAPL topping $292 and AMZN almost touching $156 today.  The pullback this afternoon, although was expected, accentuated some concerns that I discussed in the Sector Watch.  3 big sectors, mining, energy, and financials, are still having a hard time gaining strength.  Financials were especially weak today.  VIX jumped +6% today, testing 24 again, and voicing investors' nervousness.  The market may need another few more days to sort things out.  Besides buyout speculation trades, we are holding mostly cash.

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



Disclosure: no positions
Stocks: LVS, ABX, NFLX, RHT, SPWR, TIBX, NKE, PBR, AAPL, AMZN