1:00pm (EST)
The bulls are looking to close out the week with another win and Dow 10,000 will be the next playoff victory. The Dow is up 27 points to 9,810 and has hit a high of 9,845. I thought we would see more volatility due to quadruple witching and maybe we will in the last hour.
“Quadruple Witching Hour” is the final hour of a trading day and it’s when stock-index options, index futures, individual stock options and individual stock futures all expire at the same time. It happens four times a year on the third Friday of March, June, September and December.
Of course, our attention now turns towards next week and one of the big events happening next week is Research In Motion’s (RIMM, $83.77, up $1.07) earnings report. The company will announce quarterly results next Thursday. Goldman Sachs (GS, $180.95, down $0.51) reiterated their “Conviction Buy List” rating on the stock ahead the quarterly results and plucked a $96 price target on the shares. Subscribers, check the Members Area for the options we are targeting…
The dry bulk shipping sector is showing signs of life…DryShips (DRYS, $7.24, down $0.15), Teekay (TK, $21.00, up $0.34), Diana Shipping (DSX, $14.05, down $0.41), Overseas Shipholding (OSG, $40.53, up $0.21), Genco Shipping (GNK, $22.82, down $0.55) and Seaspan (SSW, $9.84, down $0.14) are having mixed results. Add all of these stocks to your Watch Lists an label it “Dry Bulk Shipping”.
I have mentioned DryShips often in this space and it seems when it gets below $6 it is a buy until it runs to $7 or $8. The options are a little trickier but a breakout over $8 could mean an opportunity for us to go long. I am looking at some call options as we speak but I’m not going long today. Again, the key will be a break above $8 and we might be able to use some October options to take advantage of this…
Freeport McMoRan (FCX, $69.64, down $1.83) has broken below $70. Yesterday in out trade update I had this to say:
“Freeport hit our zone of $72-$73 and stuck right there. I had mentioned this was the first area of resistance and we have found it. The calls traded as high as $1.65 yesterday and some of you may have taken some profits. I still think the stock is going to do something special between now and October and I hope we don’t get stuck in the Bermuda Triangle here at these levels.” (END)
We were able to exit the October 80 calls (FHZJP, $0.75, down $0.40) for a 28% gain but the break below $70 was a result of what I had feared once we got in the Triangle. The charts don’t lie. That doesn’t mean Freeport is done. We just played the runup, sold into strength, and got out just like we planned it.
I will be back Sunday night/ Monday morning.
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