The talking heads and pros were expecting another big selloff today and have been on the fence over the past few weeks on market direction. One day the market is a Buy, the next day the market is a Sell. When all else fails, invest in gold they tell you. It can be confusing for sure, unless you follow the charts’ which is why you have us. By no means are the bulls out of the woods, yet, but Wall Street has to be encouraged by today’s action.
Oil is still hovering around $100 a barrel while gold is up nearly $7 to $1,438 an ounce. Folks, we like gold (and silver) but we look for 100% returns in days or weeks and although we can find some option trades in these sectors (and we do from time-to-time), we don’t worry about the price of gold too much. We worry about the trend.
We mentioned this morning’s blowout ADP report which has helped offset some worries over oil. Although the market started off slow, there was a steady uptrend since although trading is choppy and the indexes are off their highs. We are following a couple of stories today but one sector that seems to be perking is Coffee.
Specifically, Peet’s Coffee (PEET, $46.00, up $3.13) is up nearly 7% after reporting earnings that matched expectations and after an analyst upgraded shares to “Buy” from “Hold”. The pop in the stock comes on speculation that the company will hook-up with Green Mountain Coffee Roasters (GMCR, $40.44, up $0.09) and offer consumers some beans through their Keurig coffee brewers. Peet’s has a strong following and this sector is heating up with Starbucks (SBUX, $31.92, down $0.47) looking to get into every consumer’s household.
We have profiled Green Mountain off-and-on in our Watch List section over the past few months as we believe shares could trade to $50 on continued takeover chatter. However, finding the right option trade for Green Mountain has been a little tricky with the volatility and inflated option premiums but something is brewing.
As we head to press, the Dow is up 16 points to 12,074 and has traded to a high of 12,115. The S&P 500 is up 3 points to 1,309 while the Nasdaq is higher by 13 points to 2,750 – a key technical level.
Another bright spot, Steve Jobs is in the building as Apple (AAPL, $353.07, up $3.56) unveils its iPad 2. We will be back in the morning with a full update. Subscribers, check the Members Area for the trade updates.]]>