2:50pm (EST)
The market opened sharply higher this morning and remained in narrow range as the bulls tried to make up lost ground. Economic news has overshadowed some of the global events for today and it remains to be seen if we have tested the “bottom” or not. Tomorrow is March options expiration and we expect the volatility to continue as it is also “triple-witching” day.
Triple Witching is when the contracts for stock index futures, stock index options, and stock options all expire on the same date. The event happens four times a year and occurs on the third Friday of March, June, September and December.
As far as economic news, the Consumer Price Index (CPI) for February was up 0.5%, month over month. If you strip out food and energy, the CPI gained 0.2%. Jobless Claims came in at 385,000 for the week which match expectations. Industrial production for February fell 0.1% while the capacity utilization rate level was 76.3% expectations for 76.5%. And finally, the Philadelphia Fed for March was 43.4 versus calls for 32.
The Dow is higher by 110 points to 11,723 and has traded to up to 11,787. We have waited a little longer than usual to print today’s update because we wanted to see if 11,800 would trip. We are looking for a close above this level to confirm a solid rebound and a break back above resistance.
The S&P is up 13 points to 1,270 and has traded up to 1,278. We would like to see a close above 1,275 so we will have to see how the final hour of trading plays out.
The Nasdaq is showing a 24 point pop and is at 2,640. The index has touched a high of 2,660 but we would like to see a close back above 2,675, at least.
The bulls might need the luck of the Irish to get over our aforementioned resistance targets but they are giving it a go. Tomorrow should be interesting.
We did manage to release one new trade today for our Weekly Wrap but we aren’t getting great entry prices for some of the trades on our current Watch List. A lot of the names we are following “gapped” up at the open and we didn’t want to chase. No worries, we don’t have to rush these trades as we let the market come to us.
If this is a bounce off the bottom and things turn around on a dime for the bulls, then we will have plenty of time to get into call options. If not, we can wait for to see if further support is broken which is where we might look to use put options.
We should get some more clues as we head into the final hour of trading. Subscribers, check the Members Area for the updates.
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