Today, the market was very strong, as the dollar dropped further and the commodity sectors countinued to bounce. Gold and silver plays broke out higher, as I commented in our Trading Room this morning:
October 6, 2009 7:28 AM
I slept in today and woke up to a multi-5-figure day!! ($$,$$$) Thanks AEM!!!
Gold jumped to a new record high, trading above $1040/ounce. Along with it, gold miners also jumped: AEM +6.09%, GOLD +7.09%, ABX +5.23%. In my Sector Watch (CLICK HERE) article this weekend, I talked about GLD:
"GLD closed above $98 last week and just above its daily MAs. If GLD goes above $100, it should create a new leg up. Gold miners were flat last week, but, it GLD pushes higher, the miners should bounce as well."
GLD opened above $100 today and just kept on going, ending near its day high at $102.28, up +2.46%. Needless to say, we were bullish on the gold miners. We have been back on the gold plays since the beginning of Sept. We had already scored a +125% trade on AEM:
September 03, 2009
08:54 | HappyTrading AEM ($64.70) Sold to Close AEMJL Oct 60 calls, at $7.20 +125%
On Sept 15, we got back in on the same call options:
September 15, 2009
10:15 | HappyTrading AEM ($70.65) Bought to Open AEMJN Oct 70 calls, at $4.79
On Sept 30, we added 5 times more to our position at $1.6, to bring our averaged cost down to $2.13
September 30, 2009
08:02 | HappyTrading AEM ($67.20) Bought to Open AEMJN Oct 70 calls, at $1.60 added 5x; avg cost now $2.13
Today, these options jumped as much as +227%!! I started to lock in profits in the morning:
October 06, 2009
08:11 | HappyTrading AEM ($71.64) Sold to Close AEMJN Oct 70 calls, at $3.60 +69%
07:17 | HappyTrading AEM ($71.10) Sold to Close AEMJN Oct 70 calls, at $3.20 +50%
07:13 | HappyTrading AEM ($70.50) Sold to Close AEMJN Oct 70 calls, at $2.90 +36%
Again, we got the day high today at $3.6. These options closed at $2.95, up +168.18% for the day.
We also locked in some profits on our GOOG play just before the market close for an overnight +40% gain:
12:47 | HappyTrading GOOG ($498.40) Sold to Close GOPJO Oct 500 calls, at $14.00 +40%
SLV (silver ETF) added another +4.27%. Silver miners also jumped: PAAS +10.39%, BVN +7.68%.
The Dow closed up +131.5 points; SPX added +14.26 points; Nasdaq gained +35.42 points:
GDX (gold miners) hopped +6.82% to lead the commodities. XME (metals and mining) added +2.44%. USO (oil) also went higher and OIH (oil services) rose +2.63%. Techs were strong as well, with INX2 (internet) gaining +2.32%. FXI (Chinese ADRs) climbed +2.62%.
Last night, I mentioned that "[t]he market needs to get back above the daily MAs to turn bullish again." I also said that "VIX fell back below 26, but, will need to break below 25 to give buyers more confidence." VIX got close to 25 today, and, we saw profit-taking as VIX bounced back. But, in our Trading Room, I also called out:
October 6, 2009 11:08 AM
testing 26; should find some resistance...
As VIX tested 26 and failed, the market started to come back up again, finishing with a strong close. The market is pretty much right at where the 10-day and 20-day MAs cross. So, we might see some volatility in the morning as the market fights around this pivot point. We'll also get new Initial Claims and Consumer Credit data, which will likely create some more fluctuations. But, the market looks strong and if the new economic data are positive, we should see this rally continue.
Good night and HappyTrading! ™