• Daily Game Plan – Quiet After Big Week

    by  • June 10, 2013 1:57 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Last week proved to be very eventful, as the selloff into Friday’s jobs report was reversed, and market indexes actually eeked out a small gain on a weekly basis.  While we saw a great deal of volatility last Thursday and Friday, today is exactly the opposite.  Markets are trading near breakeven after a fairly uneventful weekend, and are digesting much of what we saw last week.  Currently, the Russell 2000 is leading, up about 0.4% on the day, while the S&P 500, Dow Industrials, and Nasdaq are all trading near breakeven.  Bonds are getting hit today, lower by about 0.5%, and metals are seeing a slight bid after Friday’s swoon.  Gold and silver are each about 0.5% higher.

     

    CHART OF THE DAY

    Expedia, Inc. (EXPE) – The travel concern has seen some weakness as of late, after a strong four-year rally since the beginning of 2009.  In fact, EXPE is actually about 10% lower since the beginning of the year, and underperforming the S&P 500 significantly.  Despite its recent weakness, sentiment toward EXPE remains very bullish.  Short interest is currently near multi-year lows, and traders are buying calls over puts at a pace that’s near a bullish extreme.  The recent weak price action amid very bullish sentiment creates a nice contrarian bearish play here and now.

    I like a bearish entry here with a stop on a close above 58.  I would initially target a move down to 55, with 50 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    Some choppy trading early this week, before a move back near 1600 on the S&P 500.  I remain in the disbeliever camp with respect to last week’s surge into Friday, but will reverse my stance if and when the S&P can retake and hold 1650.  Until then, it’s tough for me to get extremely bullish, as we saw a 3% “technical” bounce between midday Thursday and Friday’s close.

     

     

    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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