• Daily Game Plan – Bulls Hold Their Ground

    by  • June 28, 2013 2:17 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Futures dipped sharply into today’s cash open, and the selling continued until about 10 am.  From there, bulls stepped in near yesterday’s lows and aggressively bought stocks.  The S&P 500 is currently trading back near the highs of the session, as everyone is on the edge of their seats for the potential quarter-end fireworks we’ll likely see into the close.  After a period of relative weakness, the Nasdaq is actually leading markets higher today, and is up about 0.5% on the session.  The Russell 2000 trails slightly, up o.3%, while the S&P 500 is trading near breakeven and the Dow is 0.2% lower.  Bonds are catching a bid after selling off early, but still remain slightly lower as the 10-year yields have failed to give up the 2.5% level.  Metals and miners are making a huge move higher after a prolonged weak period.  Perhaps this could be attributed to quarter-end shenanigans, but the price action is very noteworthy today.  Miners are currently 8% higher on the session, while gold is up over 2% and silver is 5% higher.

    CHART OF THE DAY

    Facebook (FB) – The social media giant has been dead money since its IPO, but despite the weak price action, sentiment remains bullish toward the equity.  FB continues to see analysts supporting the name, and also a good deal of call buying in the options market.  Despite the bullish sentiment, FB is recently formed a technical “death cross” pattern, where the 50-day moving average breaks below the 200-day moving average.  These two trendlines currently offer a nice entry for  bearish play on the equity.

    I like a bearish entry here with a stop on a close above 26.  I would initially target a move down to 23, with 20 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    Given it’s quarter end today, all bets are off.  As large funds look to square their books, massive orders will likely hit the tape and spark some volatility.  I continue to respect the 1600-1620 range on the S&P 500, but there’s a decent chance that it can break this afternoon.  I wouldn’t read too much into today’s price action alone, but if we see a continuation of today’s move next week, then I’d look to ride that momentum.  Next week is shortened due to the 4th of July Holiday, so I don’t expect much in the way of volatility until the second week in July.

    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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