1:15pm (EST)
The market has been choppy today after a positive start but is trading at session lows as oil prices move higher. There are other factors in play but oil is up $2, to $99 a barrel, and is approaching the $100 level which is making traders nervous.
Ben Bernanke is doing damage control in front of the Senate Banking Committee and admitted rising oil prices could hurt the economy but said it would take a prolonged increase in oil prices before it would pose a risk to the recovery. He also predicted only a temporary increase in inflation and said he still expected the economy to grow this year.
The Dow is currently down 70 points to 12,156 while the S&P 500 is off by 10 points to 1,317. The Nasdaq is lower by 25 points to 2,757.
Goldman Sachs (GS, $163.00, down $0.78) is taking a PR hit after the SEC filed suit against one of its former Board Members, regarding allegations of insider trading. The SEC also said Las Vegas Sands (LVS, $43.31, down $3.33) has been subpoenaed and is being invested for some shenanigans as well.
The bulls seem to be holding support and we are looking for Dow 12,100; S&P 1,300 and Nasdaq 2,750 to hold today or at least get a bounce higher from current levels.
Before we roll out, we wanted to talk about a recent stock-split that has made one of favorite stocks cheaper. A lot of “pros” say stock-splits don’t mean much except that you have more shares of company as your original investment doesn’t change. While this is true, we disagree to a degree and love the recent Potash (POT, $60.86, down $0.74) 3-for-1 split.
Shares were approaching $200 which made near-term options expensive to trade (we usually like to recommend options for $1.50 and lower) but the high premiums have kept us on the sidelines. We aren’t ready to trade Potash, yet, but it has been a favorite of ours in the past.
We will be back in the morning with our next update. Current subscribers, check the Members Area for the trade updates.
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