1:45pm (EST)
The market continues to see-saw as Europe’s woes came back in focus today on the possibility of a downgrade of French debt which has rattled the major indexes. Naturally, the Banking stocks here at home and across the pond are getting pounded. Bank of America (BAC, $7.10, down $0.84) is flirting with disaster once again and is down 7% after surging 18% yesterday. Shares have hit a low of $6.78 and the 52-week low is $6.31 which was set on Monday.
Yesterday’s support levels are coming back into play and there is a chance we could see new lows this afternoon if the selling pressure continues. Once the European markets close, the U.S. market will be on its own. The focus will then turn to Tech as Cisco Systems (CSCO, $13.93, down $0.13) will announce earnings after the close. We will go over their numbers in the morning but the big catalyst for tomorrow will be the jobs number which comes out before the opening bell.
Initial Claims are expected to come in at 395,000 and a print above 400,000 will spell disaster for the bulls. If there is a better-than-expected print of say, 390,000 or less, then it could help provide stability and another rebound.
A lot of the talking heads are complaining about the “high frequency” traders but it is what it is. The problem with the market pundits is that many of them do not follow support and resistance levels for the major indexes or stocks so they don’t know the downside targets or where the rallies will fade. Of course, we spend double-digit hours looking at charts every day and we point a lot of this stuff out in our daily updates.
We’ve got much more we could Ramble On about but we have a slew of stuff we have to cover inside our Members Area. We got some great entry prices on some of the trades we profiled on our Watch List this morning and we had two openings after closing 2 put option recommendations yesterday. Rambus (RMBS, $10.08, down $0.27) made our subscribers over 1,100% when it collapsed from $14 to current prices and another trade recommendation returned 205% in less than a week!
Folks, these are the types of returns this market is providing and we have been beating the drum that volatility and chaos would be extreme in July and August and that it would be an incredible time to trade options.
As we head to press, the Dow is lower by 344 points to 10,895 while the S&P is down by 34 to 1,138. The Nasdaq is getting punished for 65 points and is at 2,417.
Levels to watch into the close – Dow 10,800; S&P 1,125; Nasdaq 2,400. Above favors the bulls, below favors the bears going into Thursday’s action. Subscribers, check the Members Area for the updates.
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