Expiration Opportunities
We were up wire-to-wire yesterday as both the S&P 500 cash and futures succeeded in closing above the trading range and making new highs. Volume was just okay, but breadth and the volume ratio were positive all day.
Bonds were up 17 ticks early and went negative about 5 ticks before finishing up 3 ticks; it looks like that group is suffering from “paralysis by analysis.†Alan Greenspa–remember him, and the four weeks of turmoil we suffered through on CNBC and the newspapers about the end of the world? It’s amazing how it’s a new day. Greed has replaced fear very quickly.
Hoope some of you caught Schwab’s breakout of its 50-55 box and seven-week base on good volume yesterday. It ran to 56 ½, pulled back to 55 and closed at 55 7/8. Participation was broader yesterday, with almost all the sectors green. The long-side SPDR strategy today should be to play a breakout in the S&P 500 above 1407 if it pulls back into the range on profit taking. The S&P closed at 1409.60 yesterday, but after a run today, it’s not unlikely that it would pull back; if it moves back up, above that 1407 level, it could be a good trade.
If they just want to make a new high on option expiration today, just get on board for a ride on some of the high flyers. You can apply the same strategy to any of the market leaders that broke out of ranges yesterday to make new highs (similar to the S&P 500).
| Program Trading Numbers | ||
| Buy | Sell | Fair Value |
| 11.95 | 8.05 | 10.00 |
Target Stocks Of The Day These are some of the stocks that are set up today: Go2Net [GNET>GNET], Pixar [PIXR>PIXR], Oracle [ORCL>ORCL], Intuit [INTU>INTU], Best Buy [BBY>BBY], Tandy [TAN>TAN], Network Appliance [NTAP>NTAP], Allied Signal [ALD>ALD], Fifth Third Bancorp [FITB>FITB], Symantec [SYMC>SYMC], Federated Dept. Stores [FD>FD] and CNET [CNET>CNET].
Remember, when you get a tape like this, Slim Jims (long, tight consolidations at day’s high or low) can be your best trades when they want to run them.
Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his new series of tutorial articles.