12:35pm (EST)
We talked about the two levels of resistance the bulls faced coming into the week and yesterday’s test to the first level was a given. We have said the test to upper resistance would be harder to clear due to the lack of catalysts and this morning we said the bulls needed to hold Tuesday’s gains.
Futures were weak throughout the night and were pointing towards an opening loss of 0.5% when we hit the rack but the bears have doubled that as we head into the second half of trading. The current losses have erased all of yesterday’s gains and the bulls are playing defense as they now try to hold support.
We said a few weeks ago that trading would be choppy and perhaps become more volatile until we established a new trend and that storyline is continuing to play out.
The Dow is down 161 points to 12,419 while the S&P 500 is lower by 19 to 1,313. The bulls needed to hold 12,500 and 1,325 but now face pressure down to 12,350 and 1,300. The Nasdaq is down 41 points to 2,830 and the break below 2,850 was bearish.
We have a lot to cover with our current trades as we added 2 new positions today. We also closed another winning call option trade as our Hard Stop was hit. The call options made nearly 25% in a little over a week so we can’t complain. We have also raised the Hard Stop on our call option trade for Arena Pharmaceuticals (ARNA, $6.47, up $0.27) which is now up a whopping 260%!
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