Market Update & Outlook
SPY had another positive week as the rally continues, but this week did bring in some volatility and two pierces of the 10 day, but this market is extremely strong and was able to close right near the highs for the week.
QQQ started moving this week with the help of AAPL catching a bid off of some possibility of returning cash to shareholders. QQQ was able to break out of its year long range and looks set to lead the market higher and test the highs around the 70 area.
Economic Data Week Ahead
- Feb 12 2:00 p.m. Treasury Budget
- Feb 13 7:00 a.m. MBA Mortgage Index
- 8:30 a.m Retail Sales, ex-auto, ex ag, Import Prices
- 10:00 a.m Business Inventories
- 10:30 Crude Inventories
- Feb 14 8:30 a.m. Initial Claims & Continuing Claims
- 10:30 a.m. Nat Gas Inventories
- Feb 15 8:30 a.m. Empire Manufacturing
- 9:00 a.m. Net Long Term TIC flows
- 9:15 Industrial Production & Capacity Utilization
- 9:55 Michigan Setiment
LUFK shares broke out last week and are now again flagging with a bullish engulfing day on friday shares look poised for a move higher early in the week. Earnings are on 2/14/13 so something to keep in mind.
SGEN shares are consolidating there recent break out well and now look poised to break out further to new 52 week highs, on watch for a break of 30.59. Earnings are 2/13/13.
Shares of STEC have been in a tight range for the entire year, but put in a strong day on Friday reclaiming many moving averages and looks set to break out of this range and finish filling the fap it is currently trading in. RSI is breaking the median line looking for a move higher A bullish MACD cross seems imminent. One to watch for a nice volume break out.
LPSN after a negative earnings reaction has been stuck in a tight range, and is currently tight in an ascending triangle and looking to break out. Shares have been under accumulation the entire year MACD is bullish and RSI is starting to move.
ACAS is flagging after its recent break out and shares have been orderly pulling back and after a strong Friday look set to break out to new 52 week highs.
Shares of FIRE are trying to stay in this descending triangle but have had a few runs out of it, in my opinion this is a good short through Fridays lows, but only for a scalp and not something I would be looking to swing as the Accum/Distribution is still at highs but currently curling downwards.
AVGO on the weekly shares have put in a series of lower highs and Friday saw 7,700 March 35 calls bought, signifigant sizing and earnings should be sometime before that expiration. Certainly a sizeable position, but the chart is not that exciting and it is not something I am interested in here.
AVT came up on a 10x normal daily call volume screener and saw 1,000 Aug 34 calls trading $2 in the money a very bullish position and on the weekly shares look poised to break out to new 52 week highs. August is longer than I want to be involved so not one I am interested in, but definitely one to watch for a break out.
KO shares broke out last week following some very bullish call buys and are set to report earnings on 2/12/13. Options are currently pricing in a 2.5% move or roughly .84 cents. KO has beat estimates each of the past 4 quarters and has an average earnings move of 1.14% with the largest move being 2.07% in the 4/12 report. So a current straddle appears expensive compared to recent moves. But there has been some large bullish trades in the name recently Resistance coming in a 39.25 and in the 40 area, while havign support at 38, 37.82, 37.54, 37.35 & 36.80 area.
With all the bullish positioning of late I like a 39.50/40 Feb/March call calendar spread for .05 net debit.
In addition to my new algorithm service opening on Monday over at daytradingalgo.com, which by now I assume most have already signed up for their free two week trial, and if not you should go do so as the tool is amazing and is launching on Monday... Spaces are running out for the first trials!
I understand many do not have time to make their own watch lists or just like other ideas they have not thought of, and I am going to begin a newsletter service where I will send out a watch list each night with at least 10 ideas for the day ahead based on technicals, options flow & overall market conditions. I will also include ideas for earnings play when there are interesting names.
So I will send out four of these letter each week on Monday, Tuesday, Wendesday & Thursaday after the close. I will post an example of what it will look like one day during this current week. In addition to all of those I will send out a weekend letter, which is going to look something like this post here. A few differences will be: the options corner will be longer and include more ideas, and I will highlight many additional earnings names, but I just wanted to give a few small examples. The letter will also go into more details on how to play multiple set ups in different ways from the 20-25 set ups I will post over the weekend letter. I will include in every letter small caps, large caps, options flow ideas & earnings plays. In addition I will highlight ecomic events for the week ahead.
There is some unorganization in this example, but the real letter will be organized by small caps, large caps etc... Also I will switch to a different backgroung on the charts and it will be easier to read.
So the 4 daily letters and the one larger weekend letter per week, meaning 5 newsletters per week with many ideas coming from a variety of sources will be included in the subscription.
The service will be $44.99 per month. I will cap the number of members at 100-150, and expect to begin March 2nd with the first weekend newsletter...
Please Email firstname.lastname@example.org if interested and want to be added to the list of subscribers or have questions about the service, it will be first come first served and like I said I will cap it in the 100-150 range.
Lastly, please use the same Email for any questions in regards to the algorithm and go sign up for the free trial and read about the algorithm at: