• Daily Game Plan – New All-Time Highs

    by  • April 10, 2013 1:59 pm • Breaking News, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    The beat goes on, as today the S&P 500 made a new all-time high.  Last Friday’s weak employment report is now a thing of the past, as seemingly every bad data point is shrugged off and buyers step in on every market dip.  At present levels, the Nasdaq is leading us higher, up about 2% on the day, while Dow Industrials are lagging, up 1.0% on the day.  Much of today’s strength can be attributed to large-cap tech names such as Apple Computer (AAPL), Microsoft (MSFT), and Intel (INTC).

    After being very strong for the past few weeks, bonds are about 1% lower on the day.  Additionally, metals and miners are very weak today after a recent short-term bounce.  Gold is off 1.5%, silver is 0.9% lower, and miners are significantly lower, down 3.4% on the day.  One surprising thing I’m seeing today is that volatility is holding its bid fairly well.  Despite markets soaring higher, the VIX is only about 2% lower for the session.

     

    CHART OF THE DAY

    BlackBerry (BBRY) – The stock formerly known as Research In Motion is setting up nicely here in a symmetrical triangle, a bullish continuation pattern that appears to be headed for higher prices.  Virtually everyone hates the stock, yet you can’t argue with its recent strong price action.  BBRY is up over 20% year-to-date and about 120% since bottoming in late September 2012.

    Despite its extreme strength, short interest on BBRY is currently at an all-time high, 32% of the equity’s float.  Should it continue to move higher, this creates the potential for a strong short-covering rally.  I like a long entry here with a stop on a close below 14.  I would initially target a move to 17, with 20 being a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    A move on the SPX to 1600.  We’re currently trading at all-time highs, and the market looks like nothing can touch it in the short term.  Once there, it is likely that technical traders will take profits at the key psychological level, and some back and filling could be in order.  There remains no reason to get overly bearish the market at this juncture, but that can change quickly.  Continue to mind your risk and ride the wave higher.

    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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