Good Morning Traders and Investors,
Big events are on the horizon: Thursday's weekly unemployment claims, retail sales and 1st Quarter earnings (kicked off by a miss by Alcoa yesterday).
The Dow is currently down the most in what feels like, well, 2010. Will it stay down? As you well know, the Dow has been like a beachball in water. Push it down and it pops up to intraday highs (see yesterday's close) and then eventually makes a new "recovery" high.
So mark it on your sheets, the Dow has a recent high of 10,676 and the SPX had a recent high of 1149. Another 50 points and we make it to 1200, where for some reason I am hearing would be a major sell point.
Personally, I am surprised we came back this far, but another 50 points wouldn't surprise me as there seems to be undeniable strength. (Shown by more buyers than sellers). We would have to have some really weak economic data, earnings that miss and maybe even other events that would then adversely affect the uptrend and positive vibes in the equity markets.
Even though the Dow is down, the forex markets are pretty slow. I will update a chart from yesterday's post, the iron ore miner VALE.
It has retraced over 61.8% percent of its 2007-2008 downfall. If you were lucky enough to ride the commodity wave, then you should be thinking about protecting your positions because trends don't run forever. I know, I know, the trend is our friend, but let's not get greedy. Vertical spreads such as bear calls and covered calls with TIGHT risk stops are a good play as the TIGHT stop doesn't allow for upside profit in the stock to frustrate/get away from you.
Also, don't focus on the dollar amount of the covered call, as in all trading, it is all about PERCENTAGES. It is also a risk free way to learn to enter/exit trades and create a trading plan using TECHNICAL analysis.
Talk about risk free, try being a weatherman for the Weather Channel. They go from 10 days of sun to 8 days of snow in one day. Do they not see these fronts appearing/dissappearing? Well, whatever the case, snow???? is in the forecast for the greater Park City/Wasatch mountain area.
Must be that famed Sundance effect starting to kick in. The people watching of the "all blacks" starts soon. So hop on a plain and come on out in your best black pants and black shirt as it will be a great year to participate in the fun as the economy has definitely put a damper on the amount of "industry professionals" who make the yearly trec to Mecca.
Let's talk SRI - so any of you traveling to the Park City area, you may notice the pollution in SLC. My snagit editor isn't working, but just google it. Our pollutants in parts per million over the past few days have been the worst in the nation, by far. Don't worry, more highways are being built, but not an expansion of public transportation. Sweet!
The SRI stock of the day is quite conservative - FPL, which invests heavily in alternative (wind) energy. Again, other stock to own in the portfolio and generate cash every month by selling out of the money calls (with management).
I apologize for the chart snafu, but you can check them out on your brokers site. If you are in need of a broker, please email me as I have a pretty good handle on the advantages and disadvantages of most out there.
Happy Trading and Be Environmentally Cool with Locals Have More Fun Apparel
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