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A Day Of Huge Gains!

|Includes: CF, CLF, FSLR, GOOG, GS, LVS, MOS, NTR, Nutrien Ltd. (NTR)

The market pushed higher today as investors cheered better economic data, such as improvement in private employment.  The broader market itself only advanced slightly, as SPX added just +6.78 points.  But, certain stocks really went higher, including most of our positions.

PCLN was the headline grabber.  After last night's blowout earnings and bullish guidance, PCLN jumped $50.53 or +21.95%, closing above $281/share vs. yesterday's close of $230.67!!  We have been talking about the agriculture stocks for the past 2 weeks, and especially discussed them in this week's Market ForecastWe mentioned them again on Monday.  This morning, AGU reported strong earnings with 2Q income rising +37%.  AGU garnered +4.17%.  The agriculture stocks continued to plow higher!  POT added another $5 or +4.69%, closing above $111 (this is from a level of $97.5 before its earnings last week).  CF went up +2.23%.  MOS finally did some catching up, advancing +4.85%. 

We locked in a lot of profits today.  Here are the closed trades for the day:
August 04, 2010
12:37 | HappyTrading CLF ($62.40) Sold to Close 08C60 Aug 60 calls, at $3.95 +49%
12:34 | HappyTrading GS ($157.00) Sold to Close 08C150 Aug 150 calls, at $8.05 +55%
12:19 | HappyTrading GOOG ($506.20) Sold to Close 08C500 Aug 500 calls, at $13.50 +133%
12:09 | HappyTrading GS ($156.48) Sold to Close 08C150 Aug 150 calls, at $7.70 +48%
11:25 | HappyTrading FSLR ($131.15) Sold to Close 08C130 Aug 130 calls, at $5.25 +59% (intraday)
11:03 | HappyTrading GOOG ($504.20) Sold to Close 08C500 Aug 500 calls, at $12.00 +107%
08:00 | HappyTrading GOOG ($449.92) Sold to Close 08C500 Aug 500 calls, at $9.50 +64%
07:05 | HappyTrading LVS ($28.38) Sold to Close 08C25 Aug 25 calls, at $3.60 +31%

We have been waiting for GOOG and GS to break higher and have constantly talked about these 2 stocks in the Trading Room.  We have been on these GOOG August 500 calls since July 20, on the GS 150 calls since July 29, while locking in partial profits along the way.  We added to our positions on pullbacks and held on to these patiently.  Our patience paid off today, with a +133% profit on GOOG! 

In the Trading Room, I have been naming off stocks that have pulled back on the day after earnings (SNDK, IBM, INFY, WLP, WYNN, just to name a few).  Many stocks get sold off after good, solid earnings report for no apparent reason (or, at least not very good ones), and most of these stocks have gone higher than their pre-earnings level within 2 weeks from their earnings date.  This is partially how we have made our recent picks.  Two dramatic examples were ISRG and AMZN.  ISRG delivered a strong quarter, but, fell from around $330 to under $300.  Now, it's back above $335.  AMZN went from $120 to $106 after its earnings report.  It is now trading above $127!

GS, GOOG, and CLF all delivered very solid earnings reports, but, basically did nothing.  GOOG got sold off $40, but, started to climb just 2 days after.  We picked up the calls and waited for them to move up.  Both GOOG and GS have some bullish news recently.  GOOG basically captured the whole online search market with the Yahoo Japan deal.  In addition, GOOG's Android phones are out-selling both iPhones and Blackberry phones.  GS had recently settled the SEC charges for $550 millino, a mere slap on the wrist for Goldman Sachs.  Coal companies have all reported well, and CLF is one of the fastest moving leaders in the sector.

We picked up FSLR today because it fell $10 after reporting earnings.  There was some chatter about SI being interested in buying FSLR today.  We jumped into the FSLR August 130 calls at $3.3.  A few hours later, we were up about +60% on our position.  So, we locked in some profits.

In addition to the "fundamental" reasons, frankly, the charts of the above stocks have just been screaming "Buy"!

The Dow was up +44.05 points; SPX added +6.78 points; Nasdaq gained +20.05 points:

INX2 (internet) was up +1.25%.  XME (metals and mining) added +1.62% while GDX (gold miners) bounced +2.69%.  MOO (agriculture) rose another +1.28%.  USO (oil) was flat, and GLD (gold) bounced a bit.  XLF (financials) was slightly higher.  FXI (Chinese ADRs) rose +0.38%.

SPX

SPX added +6.78 points to close at 1127.24.  Its daily MAs and MACD went higher.

Nasdaq

Nasdaq gained +20.05 points to close at 2303.57, above the 2300 level.  The daily MAs and MACD also climbed up.

Both SPX and Nasdaq continued to push higher, thanks, in part, to some better economic data.  Tomorrow, we'll see the latest jobless claims data.  If the data come in favorable, we should see SPX test 1130.  Then, we may start to see some profit-taking ahead of the unemployment report on Friday.  As I mentioned on Monday, we are still in the recent trading range, although a breakout could be imminent.  We really need to see some continued follow-throughs to be sure.  After "a day of huge gains" such as this, for us today, we have locked in a lot of profits and are back to mostly cash, waiting for the unemployment report on Friday!

Good night and HappyTrading! ™



Disclosure: no positions