Thursday Recap 3/12/15

You know the market is in rally mode when a washed up mining equipment, diesel and natural gas engine, industrial turbine and diesel-electric locomotives maker like $CAT finishes the day with an attractive gain.

Stocks posted a sharp rally and found it's footing after the pull back from record highs.  The US Dollar index took a break today after breaking into triple digits for the first time in 12+ years, something I thought would spark a rally in the market.

From last night's recap:

I'd prefer to remain calm and trade on.  But I do think there is a chance we could witness a December 2014 like price recovery.  I talked about this before the market opened in today's video.    Certainly something to keep in the back of your mind as the week closes tomorrow:

Here are tonight's stock and option scans:

Unusual Option Action

Bull/Bear Scan

Commentary/Charts

The VIX wasn't acting as it should this week.  While the market was pulling back, the VIX yawned.  Today as the market rallied the VIX crumbled.  In a market where the only risk is what Central Bank will spark an unexpected spike higher in stocks, investors don't seem to care much about downside protection.  Then again, an ever growing herd of investors are the companies themselves.  There is no put protection plan in their share repurchase program.

Last night I pointed out how the VIX was nearing resistance.  Today it backed off and looks headed lower.  The VIX ended the day down almost 9%.

Sit Ubu Sit..... ----->>>>>>>

(Last nights chart)

Good boy ---->>>>

Small caps were leading the way this week.  Yesterday, even with the market falling $IWM found life at $120 and never looked back heading over $123 today.

That $120 figure, like the $QQQ $100 figure, is well defended.  And if the $IWM $120 figure is anything like the $100 $QQQ figure, we have another $6+ of short term upside left for $IWM.

$QQQ tech is still red this week, continuing the trend from last week.  A strong rally tomorrow could put $QQQ back on track for the $110+ level.

Let's look at $GPRO.  The chart has been bleeding since hitting record highs.  I was long the stock into earnings and got what I deserved.  Today I made my first entry into the name since getting bitten, and while I remain shy, there is no arguing the potential squeeze we could see in the stock.  I am in the $38 weekly calls at $.55 and I am looking to move out to next week, or even next month to participate further on this price recovery.

$AAPL remains in recovery mode as well.  At the open this morning the stock moved lower and then found it's footing I was tweeting this:

I think today set a nice base for tomorrow's continuation.

Look at the moves today.  $DIS with a huge move, $HD, $GPRO.

Financials should remain well bid, with the 'stress tests' over and fresh buybacks announced.

$XLF looks ripe to break new 6+ year highs in the coming months.

 

Trades

Patience paid off from a few bullish bets from earlier in the week and today, with $GPRO leading the way.

 

This morning $GPRO was red, looked vulnerably oversold, which meant a bounce could be on the offing.  I got in some $38 calls at $.55.  They closed at $1.79 for an over 200% gain.

$HD calls were in the red after opening them earlier in the week.  Today patience paid off handsomely as the calls moved over 100% higher from entry.

$AAPL continues a move to $126/$127 buy the close tomorrow.  The calls should work as the stock moves higher from the recent sell-off.

$BXP and $SPG followed the market higher as both relieved oversold conditions.  I remain a buyer and holder of puts, as I think these both have plenty of room to fall into the Spring.

Stock futures are flat to start the overnight session.  If history is any indication, stock futures will be mostly flat tomorrow morning as well, ......corporate buybacks  occur only during market hours.

A Good Night