Market Lower After 2-day Rally

1:00pm (EST) The bulls are taking a breather following the 2-day rally that has seen the Dow run-up 250 points. The index hit a high of 9,793 on Tuesday but is currently down 41 points to 9,689. Still, the momentum the bulls are showing points towards Dow 10,000 in the coming weeks. I’ve mentioned most of the big earnings from this morning and the main one after the bell will be Alcoa (AA, $13.97, up $0.08). The stock has had a pretty good run this week heading into earnings and the option activity is pointing towards more upside. The October 14 calls (AAJN, $0.63, up $0.02) have traded 14,000 contracts today while the October 14 puts (AAVN, $0.65, down $0.06) have traded only 4,000 contracts. Wall Street is expecting the company to post a third-quarter loss of 11 cents per share on revenue of $4.5 billion. Last quarter, the company reported its third consecutive quarterly loss, but said some markets may be stabilizing. In the year-earlier period, Alcoa earned 33 cents per share on revenue of $7.23 billion. We will leave this trade alone but there is a NEW TRADE today in the Members Area. We were closed out of our Abercrombie & Fitch (ANF, $32.57, up $1.01) trade yesterday for a 27% gain so we have room to add one. Subscribers, check the Members Area for the NEW TRADE.]]>

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Market Lower After 2-day Rally

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