Wednesday Recap

It was a mixed bag today as stocks rallied at the open, with some closing the day near their lows.  Small caps hung tough, posting a nice gain after $IWM briefly broke through the key $120 level this morning.

Tech lagged with $QQQ down almost .6% , leading the way was $AAPL.  $AAPL closed the day at its lows down almost 2%.

Before I get into some charts - here are today's:

Unusual Option Action

Bull - Bear Scans

Ahhhh, the Dollar.  This morning it moved to a level that I called out before the start of 2015.

This is what I was said about it:

US Dollar Index rockets into triple digits ahead of schedule http://stks.co/g1wch$UUP $DXY http://stks.co/j1wvp

I think the move will continue and remains a theme for market pundits in 2015.

After the bell, yesterdays high flying $ACAD dumped, down to $31 from a $44.85 close:

The calls were trading hands in earnest today.  Those calls aren't going to be worth much tomorrow.

Today's put buyers will be sitting on big profits, just like the call buyers on Tuesday:

Citing mistakes, Acadia Pharmaceuticals Inc. (ACAD) on Wednesday announced a top management shakeup and said it won't seek regulatory approval for its lead drug candidate until the second half of the year.

$IWM tried to break the key $120 level, but could not.  Small caps had a nice day and look to be shaking off this short term weakness.  I like the test of former resistance.

$IBB remains vaccinated against losses.  It remains right near record highs and seemingly impervious to downside.

$QQQ and $SPY were weak into the close but remain above key levels.

All things considered it was not a terrible trading session, but tech needs turn it around tomorrow or the weakness will spread.

The VIX remains rather subdued, despite the pull back.  Is this just a result of an orderly sell-off?  Or is this more a case of a market that has no fear, and knows higher prices await it into the Spring and Summer?

Either way the VIX is nearing a long term resistance point, which is something to watch heading into the end of the week.

It was a mixed bag today.  The market seems to be finding its footing, but continued dollar strength won't help things going forward.  For stocks to resume their move higher, I am looking for the US dollar to take a rest for a few days.

How about them $DUST calls?  JB got them last week, today they hit a high of  $3.70 from $.25.

 

I entered some $AAPL calls for a bounce today near the morning lows.  $AAPL did indeed bounce and my $125 calls I bought for $.44 made a nice move higher.  But as the session came to a close, $AAPL fell right back down to the lows of the day.  I think $AAPL has a sharp recovery coming.

$MCD continues to weaken.  On Monday I bought the $97 weekly puts for $.57.   They are a few kale chips away from the promise land... whatever that is.  The options are trading north of $2.00 now.

I am looking for support at $94 area.

Conclusion:

The market remains in digestion mode.  What will a stronger US Dollar mean for the stock market?  Higher interest rates?  ECB QE?  Will Greece get its house in order?  Why isn't the VIX trading like the market is pulling back?  Is this just another great buy the dip opportunity?  My answer?  Not good, not good, good, never, exactly, and to the last question... yes.   I think this is yet another great buy the dip opportunity, but we need the market to hold key levels, just like $IWM's $120 level today, in order for this dip to reverse.

Have a great evening.

Check tomorrow mornings market video, watchlist, and private twitter for trades.