• Daily Game Plan – Bulls Remain in Control

    by  • May 16, 2013 2:24 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Markets were met with yet another round of worse-than-expected economic data today, but it still doesn’t seem to matter.  Before today’s open, weekly jobless claims were released and missed expectations.  As a result, markets quickly dipped, but bulls stepped in and ramped them back higher.  Also, the Philly Fed Index at 10:00 missed expectations, but weakness in stocks was likewise short lived.  At current levels, equity indices are mixed.  Today’s relative strength winner is the Nasdaq, up about 0.3% amid strength in AAPL.  All other major indexes are trading near breakeven on the session.  Metals are seeing a bounce after trading significantly lower prior to the open, as gold is off only 0.4% and silver is actually 1.1% higher.  Despite continued resilience in equities, bonds are very strong today, up 1.2%.

     

    CHART OF THE DAY

    Thompson Creek Metals Company (TC) – While most mining names have been getting bludgeoned as of late, TC has seen quite the bounce since late April, up about 40% over that time frame.  The shares recently gapped higher on better-than-expected earnings and have since filled that gap.  Today’s bounce indicates that this area could provide some support going forward.  Sentiment toward TC recently reached a bearish extreme, as short interest peaked a few months ago and has since rolled over from those levels.  Should TC continue to move higher, this creates the potential for strong short-covering rallies going forward.

    I like a long entry here with a stop on a close below 3.20.  I would initially target a move to 4, with 6 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    Given that markets couldn’t go lower on yet another day of bad economic data, fighting this trend looks to be extremely difficult.  The S&P 500 should be supported by the 1650 level going forward, so that is an area to buy on weakness going forward.

    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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