After a decent start, the market has given back all of its gains and is slightly negative for the session. Oil, gold and silver are up; the dollar is weaker while the euro is higher. This has led to mixed emotions with the bulls trying to recover from yesterday’s losses while the bears continue to apply the pressure.
The bulls got some good news from the housing sector as New Home Sales for April increased over 7% to 323,000 units, which was better than the 300,000 units that had been penciled in. KB Home (KBH, $11.43, down $0.01) and PulteGroup (PHM, $7.60, up $0.07) got a little pop on the news but are basically flat for the session. One of these days (or years) these two stocks will be a “Buy” but not until the housing market is on its own two feet.
The Dow is down 11 points to 12,369 after trading to a high of 12,422. We are still looking for the 12,350 level to hold and if the bulls can rally into the close then we should see a continued rebound for the rest of the week.
The S&P is lower by 2 points to 1,315 but has traded to a high of 1,323. We mentioned this morning we were looking for a push back above 1,325 but the bulls will need to hold current levels or risk a test down to 1,300.
The Nasdaq is off by 10 points to 2,749 and just below our downside target of 2,750. A close below this level would not be good, mentally, for the bulls. Tech has traded to a high of 2,767 and will need a run back towards 2,800 to keep the pressure on the bears.
In IPO news, Yandex (YNDX, $35.00, up $10.00) is up 40% after making its debut this morning. The company is Russia’s most popular search engine and, coincidently, the largest U.S. initial public offering in the Internet sector since Google (GOOG, $519.61, up $1.22).
The intense demand for Yandex comes just a week after LinkedIn (LNKD, $88.80, up $0.50) went public. Yandex took in over $1.3 billion in its offering by selling a little over 50 million shares for $25 each. The deal values the overall company at about $8 billion.
Yandex’s could be a company to watch going forward, unlike some of the Chinese Internet companies, because they have a strong business model being driven by online advertising.
Of course, we will wait for the options to come out before we get serious about trading Yandex and we are hearing LinkedIn options will start to trade this week or next. Stay tuned…
Before we go, we wanted to remind everyone we are offering our option trading manual, How to Trade Options on Momentum Stocks, at no charge (a $895 value) if you order a 1-year subscription to either our Weekly Wrap or our Daily publication. The course includes ongoing training videos that covers the markets in present conditions so you will get a feel for direction.
This offer will only last for another week and we plan on doing our next video update this weekend. In it, we will talk about WEEKLY options, covered calls and LEAPs, which are longer-term options. Folks, we also ship the trading manual to your doorstep.
If you are really serious about learning how to trade and use options for your overall investing strategies then this course is for you. It will also make you a better stock trader as you will learn how to read charts to see if shares are in a downtrend or uptrend. You also get a better deal on our Daily by going with the 1-year subscription and we want you as a subscriber for the long haul while you learn. To get more information on our option trading course, please click here.
We will be back in the morning with a full update.]]>