We have been mentioning that April is the best month for the Dow since 1950 while it is the second best month for the S&P 500. Third best for the Nasdaq…
The bulls extended their win streak to 2-straight on the S&P 500 for the first time in 16 sessions while the Dow hit another all-time high on Tuesday. The rally picked up steam just before Wall Street’s lunch break and continued into the final hour of trading before the indexes backed off their highs.
The Dow gained 60 points, or 0.4%, to settle at 14,673. The blue-chips traded to an intraday all-time high of 14,716 and came within 34 points of triggering our 14,750 target. We mentioned yesterday a close above this level could get 15,000 in play.
The S&P 500 added 5+ points, or 0.4%, to finish at 1,568. The index kissed a fresh 52-week intraday peak of 1,573.89 and just missed its closing high of 1,570.25 set earlier this month. The bulls need to clear 1,575 on the close before we can say hello 1,600.
The Nasdaq advanced 16 points, or 0.5%, to end at 3,237. Tech made a run at 3,250 and traded up to 3,249.95 before pulling back. The index traded down to 3,215 shortly after the open and held 3,200 before finishing above 3,225.
The Russell 2000, however, slipped 2 points, or 0.2%, to close at 929 while the S&P 500 Volatility Index ($VIX, 12.84, down 0.35) went out under 13 after trading down to 12.75.
Shares of First Solar (FSLR, $39.35, up $12.31) zoomed more than 45% after the company raised its quarterly guidance and full-year outlooks. Their projections were significantly higher than current forecasts which sent the short sellers running for cover. We had been profiling some put options for First Solar on our Watch List and we mentioned resistance was at $28. Once shares cleared this level the shorts started to panic.
We figured the stock has a chance to run to $30 but when it blew by this level we knew something was up so we checked the news. We were flabbergasted after watching the rise from $32 to $34 but we had no idea shares would reach a high of $41!
We often don’t chase such massive moves in a stock because the options can get really juiced as implied volatility picks up but we should have swung the bat on a short-term day trade. The First Solar April 30 calls (FSLR130420C00030000, $9.20, up $8.80) went parabolic after opening at 50 cents and zooming 2,200% for the day. Wow. We started to follow them when they got over $1 but little did we know they would become a 9-bagger from there.
Futures are another higher this morning and there are a few earnings before the bell that we will discuss this afternoon. Here is how the open looks: Dow (+32); S&P 500 (+3); Nasdaq 100 (+8). Subscribers, check the Members Area for the updates.