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May 11, 2012 at 00:50 AM EDT
Market Ekes Out A Win, But Still Vulnerable: SPX, Nasdaq, CSCO, CRM, FFIV, VMW, RHT, CHKP, GOOG, AAPL, AMZN
Last night, CSCO gave a guidance that disappointed the investors.  CSCO’s stock suffered a 10% drop today.  Networking and information technology stocks were all weak today, especially software.  CRM tumbled more than $13, or 9%.  Early in the morning, we were playing puts on CRM in the Trading Room: May 10, 2012 6:51 AM software [...]

Last night, CSCO gave a guidance that disappointed the investors.  CSCO’s stock suffered a 10% drop today.  Networking and information technology stocks were all weak today, especially software.  CRM tumbled more than $13, or 9%.  Early in the morning, we were playing puts on CRM in the Trading Room:

May 10, 2012 6:51 AM
software
weak… CRM coming down…

May 10, 2012 6:58 AM
CRM
weekly 145 puts doubled in 15 minutes!

May 10, 2012 7:01 AM
CRM
tripled!!

Within 15 minutes, CRM weekly 145 puts went from $1 to $3.5!  These weekly 145 puts closed at $9.83 and went above $10 intraday!  FFIV lost 4.1% and VMW was down 3.9%.  RHT slipped 3.2%.  CHKP stumbled 4.18%.  Among the techs, GOOG, AAPL, and AMZN were propping the market up.

Energy stocks bounced a big today after the recent sharp drop.  Eventually the market eked out a win, with the Dow up +19.98 points, SPX adding +3.41 points, and Nasdaq slipping just 1.07 point.

Most sectors were flat.  FDN (internet) fell 1.12%.  IGV (software) lost 2.03%. 

SPX

SPX added +3.41 points to close at 1357.99, below 1360.  Its daily MAs and MACD went down.

Nasdaq

Nasdaq slid 1.07 points to close at 2933.64.  The daily MAs and MACD went lower.

Both SPX and Nasdaq closed below their respective support levels, SPX 1360 and Nasdaq 2950.  The market tried all day to stay above SPX 1360, but, lost it in the last hour.  Financials started to slip.  After the market, JPM announced that it suffered a $2 billion trading loss in the last month.  In the after-hour trading, financials were down quite a bit.  Asian markets were mostly lower at the time of this writing. 

While the US market is still vulnerable, it is still stronger than most foreign markets.  It may still need to test SPX 1340, but, it is trying hard to draw a near-term bottom.  We’ll have to see how much JPM’s news will affect the market tomorrow.  We may see buyers on weakness again. On the downside, we’ll look for software stocks to fall further.  Financials could also see a new leg down.

Good night and HappyTrading! ™

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