9:00am (EST)
The bears controlled Monday’s session as the bulls struggled to rebound. The major indexes did finish well off their lows and near-term support held so not much damage was done. The bulls have survived most Monday’s over the past couple of months and the rest of the week has favored higher prices despite the headline risks.
The Dow fell 26 points, or 0.2%, to end at 13,583. The blue-chips traded down to 13,552 and closed below the 13,600 but held 13,500. The bulls are looking to push 13,800-14,000 over the near-term but a break below 13,500 and then 13,350 would confirm a trend change.
The S&P 500 slipped a 5 points, or 0.4%, to close at 1,455. The index tested a low 1,453 but stayed above 1,450 which represents short-term support. The bulls are still eyeing a run to 1,475 while the bears will look to get the action back below 1,435 by week’s end.
The Nasdaq declined 24 points, or 0.8%, to settle at 3,112. Tech kissed a low of 3,107 but once again held the 3,100 level into the close. Any dip below 3,100 this week could be sold and lead to a quick trip down to 3,050. However, the longer support holds, the better the chances are the bulls will push 3,200.
The Russell 2000 dropped 4 points, or 0.5%, to finish at 838. The small-caps fell to a low of 837 and gave back the 840 level. The S&P Volatility Index ($VIX, 15.11, up 0.78) jumped over 5% and closed above 15 after reaching a peak of 15.46.
We were able to close 2 more trades yesterday to run our current streak to 21-out-of-23 winning trades since mid-August. We still have a few open position from our “batch” of trades from August and September but we are starting to build our next batch of trades using November, December, and January (2013) options. We continue to feel the last few months of 2012 will provide us with some explosive opportunities and we are looking to capitalize on the market’s next major move.
We have added a few more trades to our Watch List this morning as we have room for 1 or 2 possible earnings trades. These trades are high risk/ high reward options but we don’t have to push anything as we wait for thie current trading range to play out.
Futures are showing a slightly higher open and look like this: Dow (+26); S&P 500 (+3); Nasdaq (+1). Subscribers, check the Members Area for the updates and stay on the lookout for possible Trade Alerts this morning.