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Market Ends Down In Volatile Trading

|Includes: CME, CMG, FSLR, GS, ISRG, MA, NFLX, OUTR, Sears Holdings Corporation (SHLD), V, WLT

The market was weak from the open and sank quickly lower into the morning trading.  We cashed in the rest of our trade on SHLD for profits as big as +347%, in just 2 days:

May 19, 2010
07:21 | HappyTrading SHLD ($98.80) Sold to Close 05P105 May 105 put, at $7.10 +347%
07:10 | HappyTrading SHLD ($99.70) Sold to Close 05P105 May 105 put, at $6.30 +296%

The market was very volatile today, partially due to some stocks being short-term oversold.  MA and V enjoyed some bounces in the morning.  MA was up more than $10 intraday, trading as high as $213.25 (yesterday's close was $202.81).  However, MA still ended down slightly for the day.  V did hang on to a +4% gain.  GS went as low as $136.1 but came back to close just above $140 on an impressive afternoon rally.  CME slumped all the way to $301.6, but jumped $9 to close at $310.69.  ISRG traded as high as $335.8 and as low as $322.39, a range of more than $13, before closing at $328.77, down 1.2%.  FSLR traded down to $105, but came back to close at $110.  These are just some examples of the volatile trading today. 

Don't forget, it is the options expiration week.  So, some of these huge swings could also be due to expiration manuevers.  In addition, Fed released some positive comments about the economy, expecting a slightly better growth than previously thought.  Euro finally enjoyed a day of bounce, finishing in the green.  The financials came back up today with XLF (financials ETF) closing up just 2 cents, as Senate delayed final action on a sweeping financial regulation bill.

SPX went down to test the 1100 level and bounced up from there.  It ended down just 5.75 points, closing at 1115.05.  The Dow was down 66.58 points, and Nasdaq fell 18.89 points.  There's not much new in the charts today, so we'll look at them another day.  The important thing to note is that SPX tested 1100 and it held up, for now.

Although the market did bounce in the afternoon, it still closed in the red.  To me, the market looks out of balance right now.  There are sectors, such as the coal miners, that are technically oversold.  For example, WLT traded almost to $100 just in April; it went down to $65 today, a 35% drop in 1 month!!  Oil services have also come down a lot, not only from the weak oil, but, also the oil spill in the Gulf.  However, there are some high-flying stocks that hardly took a hit.  CSTR, for instance, closed at $54.52, with a recent new all-time high at $57.93.  NFLX shot up last week to reach an intraday, all-time high of $119.5; it still closed above $100 today.  NFLX was trading around just $50 in January; that's a +100% gain this year, even with a $20 fall from last week.  CMG's recent high was $148.87; it closed at $138.91, down just 0.54% for the day.

So there's definitely some mixed trading.  Further, not unlike every options expiration, there's a lot of volatility.  VIX still closed up today, gaining +5.28% and closing above 35.  The market may be attempting to bounce, but, if it cannot break above SPX 1140, the momentum is still on the downside.

Good night and HappyTrading! ™

Disclosure: no positions