9:00am (EST)
The bulls stampeded out of Wall Street’s gate at the start of Monday’s trading session on news that America’s most wanted terrorist, Osama Bin Laden, had been killed by U.S. military. However, the euphoria only lasted until lunchtime before the bears made their presence known. The market was able to extend its three-year highs at the open but the lack of momentum ultimately led to the bulls’ first loss in a week.
The Dow reached a high of 12,876 but finished lower by 3 points at 12,807. There is short-term support at 12,600 while the bulls will continue their pursuit of Dow 13,000.
The S&P 500 traded to a top of 1,370 and we were looking for a break past 1,375 for a possible run to 1,400. However, the index fell 2 points to end at 1,361 after touching a low of 1,358. The bears will be pushing for a close below 1,350.
The Nasdaq fell nearly 10 points and settled at 2,864 but not before kissing another decade high of 2,887. The bulls are planning for a run to 3,000 while the bears look to get Tech back under 2,850.
The Energy sector saw some strong gains intraday but gave them back as well after oil rebounded. “Black Gold” was down to $111 a barrel at the open but finished near $113.50. Oil’s bounce came after the U.S. dollar fell apart (again). Although the greenback finished relatively unchanged, the dollar set a new two-year low against other currencies before rebounding.
TiVo (TIVO, $9.86, up $0.29) had a good day after gaining 3% on news that it settled a patent lawsuit against EchoStar (SATS, $34.99, down $2.09) and Dish Network (DISH, $29.79, up $4.75) for $500 million. The legalities involved TiVo’s video recording technology and the agreement was a huge win for the company. Although legal battles can be costly and will continue, the agreement only scratches one name off TiVo’s list as they go after other companies who may have infringed on their technology.
We have been watching these developments for years and you will see from our Track Records that we like to trade TiVo. Our latest TiVo recommendation was a covered call trade for our Weekly Wrap which is on pace to return 40% in less than 2 months if shares are at $10+ by mid-May.
The Biotech sector showed some decent gains yesterday and there are a few names we have been watching for possible breakouts. Seattle Genetics (SGEN, $16.84, up $0.23) has been on our Watch List for a few weeks but is a stock we have been following for quite some time while Vivus (VVUS, $7.80, up $0.03) has been an open trade of ours since January.
We have compelling reasons to believe both of these stocks are set for much bigger gains down the road but there could be pullbacks along the way. Of course, we first introduced Vivus to our subscribers in January 2009 when shares were trading at $5.37 and said to watch this entire drug obesity push. It has been a couple of years but the first company to get it right stands to make billions in sales so the rush to get a drug to market is on. Arena Pharmaceuticals (ARNA, $1.33, down $0.07) and Orexigen Therapeutics (OREX, $3.13, flat) are the other two players but we like Vivus for its pipeline.
Futures are pointing towards a slightly lower open this morning. Dow futures are down 32 points while the S&P and Nasdaq futures are off by 4 points each. Subscribers, check the Members Area for the trade updates.
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