• Daily Game Plan – All Is Quiet

    by  • May 6, 2013 1:47 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    After soaring to new all-time highs on Friday, markets are very quiet today, as the big move is digested.  The S&P 500 has traded in a five point intraday range, and stocks are currently at their highs of the day.  Today marks the third anniversary of the flash crash from 2010, and sentiment and markets are in much better shape than they were only a few years ago.  Amid social turmoil in Greece regarding austerity and its insolvency at the time, markets sold off in record fashion in only a few minutes’ time, before ultimately settling down significantly on the session.

    Presently, the Russell 2000 is leading markets higher, up about 0.5% on the session, while the S&P 500, Nasdaq, and Dow are each up by less than that amount.  Bonds are seeing some continuation of Friday’s big down move, off about 0.4% on the session.  Metals and miners are trading near breakeven on the day.

     

    CHART OF THE DAY

    Teck Resources (TCK) – The metals exploration company, similarly to most other materials stocks, have been bludgeoned so far this year, down over 20% since the beginning of January.  Metals and miners have been weak for some time, yet sentiment continues to hold its head above water.  TCK is no exception, as only 1 of 15 analysts covering the stock have it rated a “sell.”  Additionally, only 2% of TCK’s float is sold short, indicating further optimism toward a name that has underperformed for some time.  TCK is currently filling the gap lower from 4/15, and coincidentally site of its 50-day moving average.  This trendline supported TCK numerous times in 2012, and with the stock now rallying back into it, it could act as resistance going forward.

    I like a short entry here with a stop on a close above 28.50.  I would initially target a move back to 25, with 22 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    Assuming no major headlines surface in the near future, I’m looking for a continued grind higher.  This week is very light on the economic front, as the only significant events will be on Thursday and Friday, where there will be a Bank of England Monetary Policy decision, and Ben Bernanke speaks on Friday.  Outside of that, there are a handful of bond auctions that could move markets during the middle of the week.  Don’t fight this trend unless we get some significant developments on the price or news front.

    About

    Bryan Sapp is a Senior Trading Analyst at Schaeffer’s Investment Research, where he has specialized in volatility-based options trading since early 2010. With Bryan at the helm, Schaeffer’s Volatility Trader generated a 2012 portfolio return of 70% for subscribers. This real-time option recommendation service exclusively trades short-term straddles. Prior to joining the research team at Schaeffer’s, Bryan honed his skills as a speculator by trading his own account, and playing poker professionally to pay his way through college. Bryan attended the University of Louisville, where he received his Bachelors in Economics and an MBA with an Entrepreneurship focus.

    http://www.schaeffersresearch.com/

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