The bulls were looking to extend their winning streak to six straight sessions as the bears battled hard to put a plug in the current rally. The cards were in their favor as a slight jump in jobless claims and an ongoing housing foreclosure crisis that continues to haunt the Financial sector looked like Aces.
The Bank stocks took another hit as Wall Street frets an investigation of the institutions’ handling of foreclosure procedures and this is a bad story only getter worse. It was a curveball for the sector (which was on the verge of breaking out of a funk) that could force them to agree to loan modifications or “principal forgiveness agreements” after all 50 states formally launched investigations. Looks like the government is getting their finger in another pie…
Bank of America (BAC, $12.60, down $0.69) and Citigroup (C, $4.06, down $0.19) dropped 5% while the Financial Spiders (XLF, $14.60, down $0.26) fell 2%. We were watching the XLF for signs of a move past $15 for confirmation but that didn’t happen. Shares touched $15 on Wednesday but could not close above this level. Side Note, Bank of America traded 500 million shares yesterday…incredible.
We continue to find it “unsettling” that the Financial sector has lagged all phases of the current market rally but a few things we have learned is that you don’t fight the tape and you tug on Superman’s cape. Despite the Debbie Downers, the bulls came thisclose to extending their winning streak to seven as the market finished near the flat line for the day.
The Dow slipped 2 points to finish at 11,094 after trading down to a low of 11,023. The 11K level held and our near-term target remains 11,150-11,200.
The S&P 500 fell below the 1,170 level to a low of 1,166 but rebounded to finish at 1,173, down 4 points. We are still expecting a move past 1,200 over the short-term while 1,150 provides support.
The Nasdaq declined by 6 points and finished at 2,435. The index traded to a low of 2,422 and did manage a high of 2,445. Tech has yet to close above our 2,450 target but that shouldn’t be an issue today.
Yesterday, we talked about the possibility of Google (GOOG, $540.93, down $2.37) surprising Wall Street and how the stock was building momentum. Well, Google did not disappoint our research as shares were up a Grant ($50) in after-hours trading last night to $590. Here were our quotes from yesterday:
“While search queries were up 4% overall in September from August, Google could surprise some analysts with a huge quarter as they doubled the industry’s gain as a whole. The stock has been in a solid uptrend since its end of August lows of $447-$448 and has gained nearly a $100 in 6 weeks. Google’s shares have been white-hot due to the release of “Google Instant” which shows results as the user types in a search query.”
We will go over their numbers in today’s 1pm update but for now, we want to get our subscribers in the Members Area as we have a number of trades that should see some solid gains. We also have some loose ends to tie up on a strangle option trades which have done well since we started adding them into our mix. The October options expire TODAY so we want to make sure you know what to do on these profitable trades.
As we head to press, the Dow futures are up 36 points to 11,088 while the S&P 500 futures are higher by 4 to 1,177. The Nasdaq 100 futures are showing a 13 point pop and are at 2,075.]]>