• Daily Game Plan – The Top is in?

    by  • January 9, 2013 2:11 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    The equity cash market open this morning was met with buying, as the S&P 500 rallied about 7 points from its 9:30 start.  Since then, markets have retreated and are currently near the level where they opened.  Presently, the Russell 2000 is leading the charge, up about 0.5% on the day, while the S&P 500 lags, up only about 0.25%.  Bonds, commodities, and the VIX are all relatively flat for the day.

    Markets continue to press higher near multi-year highs.  The action since the beginning of 2013 on a chart is a bull flag, which happens when you get a strong move higher on big volume(like we did on January 2), then you get sideways price action amid waning volume over a course of a few days.  The 2012 highs of 1475 on the S&P 500 continue to be the focus of many traders, and we should get some resolution to this “bull flag” fairly soon.

     

    CHART OF THE DAY

    TiVo, Inc. (TIVO) – The video solution provider has been strong over the past 52 weeks, up about 25 percent.  In November, TIVO reported better-than-expected earnings and the stock rallied sharply.  Since then, TIVO has consolidated nicely around the 12.50 level, and looks to move higher from here.  Despite its recent strength, short interest on the equity remains at 11%.  There has been some evidence of recent short covering, which could be the start of something bigger.  Any positive news within the space could spark a strong move higher.  I’d look to buy here, using a close below 12 as a stop and a target of 16.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    Continued choppy price action with upward bias until some sort of catalyst emerges.  There is an ECB Monetary Policy decision tomorrow, so be aware of any potential surprises on that front.  This week was very light on the economic data front, but next week should be interesting.  Included in the reports for next week are retail sales, PPI, CPI, Industrial Production, Building Permits, and the Philly Fed Index.  Additionally, next week will mark the beginning of the chunk of major earnings reports, including multinational financial companies.

    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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