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Energy Stocks Stall The Market

|Includes: Apache Corporation (APA), CTRP, DIS, DO, GOOG, NOV, RIG, WLT

Last night, in my evening article, I said, "We'll need to see some strength back in energy stocks to push the market above SPX 1100."  Well, the energy inventory numbers today showed a drop in energy use.  Energy stocks turned weak soon after the numbers were released:  APA -2.66%, DO -1.58%, RIG -2.74%, NOV -3.14%, WLT -3.46%.  Without the energy sectors, the market found it difficult to rally and turned from positive to negative.

Nevertheless, we cashed out on most of our long positions with over +100% gains, including a +222% winner on CTRP:
November 12, 2009
12:29 | HappyTrading GOOG ($566.90) Sold to Close GOPLN Dec 570 calls, at $15.00 +105%
09:37 | HappyTrading GOOG ($570.00) Sold to Close GOPLN Dec 570 calls, at $16.50 +126%
08:12 | HappyTrading APA ($99.20) Sold to Close APAKT Nov 100 calls, at $1.45 -47%
07:04 | HappyTrading CTRP ($70.10) Sold to Close QCTKL Nov 60 calls, at $10.30 +222%

We took most of GOOG position off the table and cashed the rest of our CTRP position out.  We also cut our losses on the APA calls.  After the market, DIS reported better-than-expected earnings.  Its shares traded +2.24% higher in the after-hours session.

The Dow closed down 93.79 points; SPX lost 11.27 points; Nasdaq fell 17.88 points:

Most sectors ended in the red today.  Commodity-related sectors led the market lower:  OIH (oil services) -3.05%, XME (metals and mining) -2.23%, XLE (energy) -2.2%, GDX (gold miners) -2.93%.  Both GLD (gold) and SLV (silver) took a breather today.  XLF (financials) was down 1.87%.  FXI (Chinese ADRs) dropped 1.83%.

SPX

SPX fell 11.27 points to close at 1087.24.  It still was not able to close above 1100.  The MACD was slightly higher.

Nasdaq

Nasdaq lost 17.88 points to close at 2149.02.  Its daily MAs and MACD remained up.

Like I've been saying in our Trading Room and in my articles, this market will have a difficult time rallying above SPX 1100 without the energy sectors.  SPX once again tested 1100 today and once again failed to close above.  Today's weakness in the crude and gasoline inventories gave the market an excuse/cue to take some profits and consolicate after 7 sessions of gains, which we have been doing for the past few days.  VIX popped back above 24 and could test 25 tomorrow.  We are being a little more careful here as we are now mostly in cash.  The market indices are still carrying upward-pointing daily MAs, but, the new bullish formations have not been quite established (although the Dow does now have a new bullish formation, not shown here).  The support levels are once again SPX 1080 and Nasdaq 2150.  Tomorrow is Friday, so, I'd expect some choppiness, especially in the morning.  The last 2 hours of trading could be important to set the tone for next week.

By the way, in case you missed it and you'd like to get a dose of positive attitude, positive thinking, and positive energy, check out the program aired on CNBC tonight with Warren Buffett and Bill Gates:  Keeping America Great.

Good night and HappyTrading! ™