Market Summary (continued)
Futures were up pre-Jobs Friday, and when the jobs report headline numbers beat expectations the market hesitated briefly. A big top line beat, unemployment drops 2BP, wages decent at 3.2% year/year. Still, Powell's comments from Wednesday about 'transient' weak prices and no need to move either direction with rates were fresh.
With some other Fed commentary, however, commentary that walked back Powell's post-FOMC statements, stocks held the bid and indeed improved upon it. They rallied to midmorning, tested a bit, then rallied to mid-afternoon where they pretty much flat-lined to the close. Not a bad day upside after some shaky sessions, but in reality the action simply left the indices in the same old, same old -- except for RUTX.
SP500 28.12, 0.96%
NASDAQ 127.23, 1.58%
DJ30 197.16, 0.75%
NASDAQ 100 1.58%
VOLUME: NYSE -5%, NASDAQ -6%. Again below average volume on a move higher. That would not be such a downer if there was no selling on the week. There was some distribution, however, right at the prior highs as upside was turned back.
ADVANCE/DECLINE: NYSE +3.5:1, NASDAQ +3.9:1. Now THAT is impressive breadth, more of a bullish indicator.
Now I know, gains of 1% and better by the indices are not chicken feed. They just didn't change the game from where it is being played: in a range near the SP500 and NASDAQ prior highs or other key resistance for the indices.
Thus, while Friday was a solid upside session from start to finish, if it is going to show more it will have to . . . show more next week.
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CLF (Cliffs Natural Resources--$10.30; +0.44; optionable): Industrial metals and minerals
STATUS: Double bottom. CLF continues to set up a good pattern, the most recent 3 months a double bottom. This is part of a larger pattern started in September 2018, the last 3 months the handle to a cup. Good volume the past two weeks as CLF came off the second low. Friday a solid upside break with a move through the 50 day and 200 day SMA. Volume rallied to just above average. Nice setup and break higher, and as CLF continues, we want to move in for a run at the early February high. That move gains 18% on the stock and 70%ish on the options.
Volume: 11.183M Avg Volume: 10.824M
BUY POINT: $10.32 Volume=12M Target=$12.19 Stop=$9.69
POSITION: CLF JUL 19 2019 10.00C - (60 delta) &/or Stock
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STATUS: After basing from mid-August to April, CSX broke out three weeks back, gapping out of the base. Now that does not mean CSX went nowhere. Indeed, it has put in an impressive run off the December low. It was good to see, however, the gap on volume as it made the break from that long base. For over 2 weeks after that gap CSX worked laterally over the 10 day EMA. Finally the next break higher Friday, and with that kind of move we want to play CSX as it continues on the line. A rally to the initial target gains 60+%ish on the call options.
Volume: 2.446M Avg Volume: 4.168M
BUY POINT: $80.57 Volume=5.5M Target=$84.94 Stop=$79.11
POSITION: CSX AUG 16 2019 80.00C - (57 delta)
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DOCU (DocuSign--$56.46; +1.57; optionable)
STATUS: Cup w/handle. Looking at DOCU again as it has worked to form an 8 week handle to a cup with handle base that started in August 2018 with that peak. The handle is basically a triangle formed using the 50 day MA as support. Put in a higher low at the 50 day MA late week and started upside Friday on rising volume. Okay, looking for a breakout move from the handle as our entry signal. Want to see some good volume on that move to propel the stock toward that August peak as the initial target. That move gains 18%ish on the stock and over 100% on the call options.
Volume: 1.655M Avg Volume: 2.229M
BUY POINT: $57.38 Volume=2.8M Target=$67.88 Stop=$53.88
POSITION: DOCU JUN 21 2019 57.50C - (48 delta) &/or Stock
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--by the MarketFN STG Team
MS (Morgan Stanley)
Our Success Trading Group members scored another winning trade this week when we closed out a position in Morgan Stanley (Ticker: MS). We are watching several stocks and are looking forward to trading next week.
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RYAM - Rayonier Advanced Materials Inc. is currently trading at $15.23. The June $15.00 Calls (RYAM20190622C00015000) are trading at $1.05. That provides a return of about 6% if RYAM is above $15.00 on expiration Friday in June.
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| The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites.|
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