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Stocks Take SP500 Above 1100

|Includes: BIDU, BKNG, Cleveland-Cliffs, Inc. (CLF), DELL, FSLR, WMT

The market pushed higher in bumpy trading as February options came to 1 day before their expiration.  In my article on Tuesday, I said,

"I think we should see some profit-taking tomorrow, especially if SPX goes up to test 1100.  If SPX does hit 1100 tomorrow, we would look to lock in more profits on the long side.  I do not think SPX is ready to go above 1100 just yet.  If the market can keep the altitude and rest for a day or two, SPX should get another chance at 1100 again later this week." 

Sure enough, on Wednesday, SPX tested 1100, but, was not able to break through.  It did keep its altitude and closed in the green.  Today, the buyers came back and pushed SPX to close above 1100.

Last night, PCLN reported a superb quarter and saw its shares trading up +9.43%, or $20.08.  CLF also delivered a great report card, doubling its 4Q profit from a year ago.  CLF jumped +7.38%, or up $3.50.  We picked up a quick trade on CLF that almost doubled intraday:

February 18, 2010 
11:05 | HappyTrading CLF ($51.25) Sold to Close 02C49 Feb 49 calls, at $2.30 +84%
10:51 | HappyTrading CLF ($51.10) Sold to Close 02C49 Feb 49 calls, at $2.20 +76%
08:13 | HappyTrading CLF ($50.90) Sold to Close 02C49 Feb 49 calls, at $2.05 +64%
07:12 | HappyTrading CLF ($49.80) Bought to Open 02C49 Feb 49 calls, at $1.25

These CLF Feb 49 calls traded as high as $2.4 and closed at $2.04.

BIDU was another high flyer today, trading as high as $498.88, a new all-time high.  BIDU closed up $10, or +2.07%, at $497.6.  In our Trading Room, we traded the Feb 490 calls and were able to get some quick scalps.  These Feb 490 calls opened at $2.45 this morning and traded as high as $9.56, before closing at $7.90.

After the market, FSLR reported better-than-expected earnings, but, the guidances was in-line.  FSLR shares dropped +7.2% in after-market trading.  WMT's 4Q profit rose +22%, but, its shares went down slightly this evening.  DELL's earnings numbers for its latest quarter were lower than expected.  DELL shares fell 5.88% after the report.

The Dow finished up +83.66 points; SPX added +7.24 points; Nasdaq gained +15.42 points:

Techs were mostly up, led by SWH (software), up +1.13%.  Commodity sectors keep their grouds:  XME (metals and mining) +1.16%, GDX (gold miner) +0.78%, OIH (oil services) +0.66%.  USO (oil) hopped +2% while UNG (natural gas) slumped 2.99%.  MOO (fertilizers) finally took a breather today, finishing flat.  FXI (Chinese ADRs) barely closed in the green.


SPX added +7.24 points to close at 1106.75, above the 1100 level.  It also closed just above its 30-day MA.  The MACD went higher.


Nasdaq gained +15.42 points to close at 2241.71.  It closed above its 30-day MA.  Its MACD continued up.

This afternoon, after the market close, the Fed decided to raise banks' emergency-loan rate to 0.75%.  The dollar jumped immediately and stock futures went lower.  About 1 hour before the close today, I commented in the Trading Room:

February 18, 2010 11:55 AM
I'm out of all my expiration feb call plays at the moment; want to see what VIX does here...

VIX has fallen for 7 consecutive days now.  It closed below 21 today, from its recent height of just above 29.  When VIX falls for so many consecutive days, it can sometimes get a pop.  Wouldn't you know it, the Fed announced a "timely" bump to the banks loan rate, which is not supposed to affect the borrowing cost for consumers. 

Tomorrow is the last trading day before the February options expire.  So, I'd expect some volatile trading.  With both SPX and Nasdaq above their respective 30-day MAs, the market has some support levels.  For SPX, we'll first be watching to see if 1100 can hold.  The 20-day MA is just below 1090.  For Nasdaq, the 30-day MA is at around 2225 and should provide the nearest support.  Be a little more careful tomorrow.  I think we could see SPX come down to test 1090.  If 1090 holds, the market might come back to test 1100 before the close.

Good night and HappyTrading! ™

Disclosure: positions: none