Major markets continue to drift lower amidst geopolitical uneasiness.  For the first time since the election, the S&P 500 and the Dow have closed below their 50-day moving averages.  The Nasdaq remains above, but has also been soft lately.  The next major support on the S&P 500 is 2316, which equates to the 20 day low point formed on March 27th.



All sectors are relatively flat.  Financials are the most bearish currently, and the “safe” sectors (Utilities and Staples) are improving the most lately.  Overall sentiment is bearish both currently, and over the next six months.  Seasonality suggests that April could still finish strong as earnings season begins to ramp up once again.  Good options traders can make money in any market, and some even retire rich.  To learn more:


OPTIONS INSIGHTS:  The possibility of a bounce yet this month notwithstanding, the focus of our intermediate term trades should be gradually shifting to a bearish bias between now and the end of May.  Horizontal PUT spreads that stretch out to October or so can be added to our portfolios to provide both cash flow and equity to take us through the summer doldrums.  That doesn’t mean we have to exit our long term bullish fundamental trades, but we might consider hedging, and also selling short calls more aggressively close to the stock price to keep the profits flowing during slower months. To learn more about how to trade options, go here:

 OVERSEAS:  European markets were broadly down in overnight action as the European Central Bank ponders possible rate increases.  Also, in France, Le Pen’s campaign headquarters was attacked by arsonists.  Asian markets were mixed, but the Nikkei, once again, is showing relative weakness.  North Korea could be conducting another nuclear test very soon.

OIL:  Crude AND gasoline inventories BOTH declined this month for a change.  Oil stockpiles have now retreated slightly from record highs, and oil prices have settled in the low 50’s in terms of price per barrel.  Summer driving season is approaching, but is not here yet.  For amazing insights on the oil market, listen to Courtney Smith, a true commodities expert.  To hear what he has to say about oil and other opportunities, click here:

JOBS:  The Jobless Claims picture continued to be improving as only 234K new claims occurred this week (versus an expectation of 243K), and well below the four week average of 247K.  Consumer sentiment also remains strong at 98 vs. an expectation of 97.

BIOTECH INSIDER:  The biggest downfall for many traders is failure to pay attention to detail.  In fact, it’s the No. 1 killer of portfolio performance.  Unfortunately, many of us won’t touch a stock that’s been in a solid downtrend, even if the underlying fundamentals are shockingly great.  We won’t look deeper into details.  Look at Rigel Pharmaceuticals (RIGL), for example.  For months it had been ignored, despite great news on drug development.  No one wanted to touch it.  And, as a result, it would sink to a low of less than $2 even as trial data grew hotter by the day.  As unfortunate as it was, traders cared more about what the chart said, more than what the details of the company’s trials were clearly saying.  Their loss, though.  The stock just ran to $3.50 after the company filed its first new drug application with the FDA, which if approved could see the stock explode.  The drug in question is fostamatinib, an oral spleen tyrosine kinase (SYK) inhibitor, which is currently in trials for immune thrombocytopenic purpura (ITP) – a condition where a patient’s immune system incorrectly sees the body’s red blood cells as foreign substances, attacking and destroying them.  That can result in lowered blood platelet counts, which can then lead to excessive bleeding, fatigue and potential bruising.  It impacts up to 125,000 people in the U.S. alone. The Street has already projected potential sales of $360 million for such treatment. Yet, all of this excitement and news was ignored for quite some time because many don’t look into details, as our resident biotech expert, Ian Cooper does every day.  For more information on similar opportunities being ignored, click here.

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