• Daily Game Plan – Good Data, Ugly Action

    by  • March 21, 2013 1:50 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Near the open this morning, jobless claims and Philly Fed data were released, and both numbers surpassed expectations.  However, the market was less-than-impressed with the economic signals, as we’ve failed to sustain any sort of bounce.  Presently, indexes are trading near their lows of day, led by technology, with the Nasdaq down nearly 1%.  The S&P 500 and Russell 2000 are each off by about 0.8%.  Metals and miners are seeing a very strong bid as news continues to surface out of Cypress.  Currently, the miners are up nearly 3%, while gold and silver are up 0.6% and 1.7%, respectively.  While markets struggle, however, the bid in volatility and bonds isn’t all that impressive.  The VIX is up a mere 8% on the day, with bonds about 0.8% higher.

     

    CHART OF THE DAY

    Intel (INTC) – The chip maker has been strong as of late, but its recent strength hasn’t done much to reverse the swoon seen in INTC since the Spring of 2012.  After filling the gap down from 1/17, INTC has dived lower, and looks to be reversing its near-term uptrend.

    Despite relative weakness versus the market for some time, analyst and option sentiment toward INTC remains bullish.  The combination of weak price action amid positive sentiment sets up for a nice bearish play here, as INTC is breaking back below its 50-day moving average.  I would look to enter a short position here, with a stop placed on a close above 21.50.  I would initially target a move to 20, with 18 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    From a broad-market perspective, I really have no read here and now.  I continue to pick stocks in a long/short fashion, but determining the next course of action seems to be guesswork at best.  Headlines will continue to dominate the tape, and fresh news could spark the next big leg in the markets.  I’ll be off tomorrow, so no Daily Game Plan.  Trade them well and be sure to mind your risk.

    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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