As we expected, volume is light in this holiday-shortened week and traders are looking for clues as to where the market is headed next month. The data we see coming in is pointing towards a higher market but the devil will be in the details.
MasterCard’s Advisors’ Spending Pulse Holiday report indicated shoppers spent a little more this season as retail sales rose 3.6%, compared with a 2.3% drop in the year-ago period. We have been mentioning the battle going on between the retailers and online merchants and both seem to be winning with this big turnaround.
Oil is up 95 cents, to $79/ barrel which is helping energy shares. We are looking for Exxon Mobil (XOM, $69.01, up $0.35) to make a run to over $70 in the next few weeks…
Airline stocks are taking a dive as the U.S. tightened airline security after some idiot smuggled explosives aboard a plan over the weekend. We aren’t big fans of airlines stocks anyway and we rarely trade the sector but this could curtail business travel on lucrative international routes.
AMR (AMR, $7.75, down $0.39), Delta Air Lines (DAL, $11.25, down $0.52) and JetBlue Airways (JBLU, $5.51, down $0.13) are all tanking today. These stocks are probably headed lower but we really don’t see an option trade here.
As far as our other option trades, A123 Systems (AONE, $21.35, up $0.28) has moved into positive territory and we are expecting a run to $24 this week. Meanwhile, General Mills (GIS, $71.46, up $0.51) continues to set 52-week highs. We will be back in the morning with a full update on all of the trades but continue to hold them.