The market closed lower for its fourth straight session on Wednesday but futures are higher this morning as we head towards the open. The Dow fell 30 points yesterday and will start the session at 9,280. When you include last Friday, the index is off by 3 Ben Franklin’s. The S&P 500 stayed below 1,000 and will start the day 994, while the Nasdaq will try to hold 1,967. Dow futures are up 40, Nasdaq futures are higher by 9 and the S&P 500 futures are up 6.
Oil prices have been making the headlines lately and the one stock we are watching is Exxon Mobil (XOM, $68.18, down $0.23). A couple of weeks ago we missed the run from $66 to $72 which happened over 5 days. The September 70 calls (XOMIN, $0.71, down $0.09) were at $2.55 just one week ago.
There is strong support at $66 and we aren’t there yet. I probably won’t profile any NEW option trades this week because of the upcoming holiday weekend. However, if we see Exxon back down to $66 then maybe NEXT WEEK we will take a look at the October 70 calls (XOMJN, $1.75, down $0.03). We will also have to keep the October 65 puts (XOMVM, $1.35, down $0.05) on the radar in case support is broken.
I actually dusted off the Gold Watch List which was white-hot yesterday. Gold typically acts as a hedge against the U.S. dollar but it is also a favorite safety net for a lot of people. The options pits were crowded in the gold companies as the price of the metal rose to a near three-month high. At $967, Gold is once again making a run to $1,000.
Gold Fields (GFI, $13.20 ,up $1.34) and NovaGold Resources ($4.62, up $0.89) were up 11% and 24%, respectively.
Talk about some powerful moves…the Gold Fields September 13 calls (GFIIM, $0.65, up $0.50) traded 4,300 contracts and tripled. The NovaGold Resources September 5 calls (NGIA, $0.25, up $0.22) OPENED yesterday at 5 cents and gained an astounding 733%!
Most of the gold stocks are showing a higher bid this morning so we will shall see if the yellow metal can crack $1,000/ ounce. I’m not ready to go long gold before a holiday weekend but I wouldn’t be surprised to see us break this level over the short-term.