Monday: President’s Day
Tuesday: Bull Rally due to Bullish sentiments in Europe
Wednesday: Materials profit taking, Financials soar.
Thursday: Philly Index surprise, Unemployment down
Market rose. Bank Of America soar.
Friday: Market opened low, FED increased discount rate.
Option expiration day, low volatility.
Steel soared.
It was a bumpy short week, and mostly bullish week.
Option expires today, thus most stocks ended up hovering around their whole number region. JPMorgan JPM could not move beyond $40, MGM Mirage and others too…
Even the DOW closed at 10400.xx a whole number too.
Commodities are in a rallying trend.
March Copper contracts shot past 3 week high and spot price found support at $3.30.
Aluminum rose to $0.94, a breakout above $0.95 will send it to $1
Dollar index rallied when Fed announce their plans. However, it is starting to reverse its trend.
EUR/USD ran up 150pips to $1.36 from a low of $1.345.
A bullish trend is expected for EUR/USD as the dollar starts weakening again amid strength in the stock market.
Inflation fears were subsided after Core CPI showed negative for the first time in many years. CPI also increased 0.2%, less than expected.
The economy looks healthy again as the FED move can be seen as a confidence booster in the financial system. For this recovery play, invest in Financials, Materials, Industrials, Retails as these sectors tend to yield the highest returns during this period of economic recovery.
Underperforming sectors include Utilities and Telecom
If you are in to this TECH rally, consider APPLE AAPL, Intel INTC, Sandisk SNDK and AMD. These stocks are still a great buy as they are able to yield 30% returns by year end.
Speculative sectors include airlines and gaming. Watch Delta Airlines DAL, and Casino stocks as usual. WYNN Resorts, Las Vegas Sands, MGM Mirage and Melco Crown Entertainment MPEL.
Good Trades for the week.
Long Bank Of America Corp BAC: $14.8 - $16.0
Long Citigroup C: $3.20 - $3.40
Long Alcoa Inc AA: $13.5 - $13.90
Current holdings:
Long Alcoa Inc AA $13.5
Long JPMorgan $39
Long Intel $19.5
Long MGM Mirage $10.5
Long WYNN Resorts $61.5
Long Las Vegas Sands $15.5
Long Melco Crown MPEL $3.7
Long EUR/USD $1.346
Will do some technical analysis for potential breakout stocks for next week.
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