An oversold market becomes slightly more so as “investors pull out” intraday and square off with key support on more of the same ol’ storyline, plus one fresh face of notice. As of 12:30 ET the SP-500 is (SPY) is flat after a bit more “sell in May” agitation leaves a few more bulls to “go away” on this third Friday of the month.
“The Facebook” (FB) IPO is trading and up about 9.50% over its $16.0B price of $38 a share. In just more than an hour’s time since the closely-watched and most expensive internet IPO began trading, roughly 70% of its float or about 270 million shares have changed hands in the most social, if not competitive of arenas in the market today. Further over-the-top coverage, insider secrets and “he said, she said” sordid analysis can be found at CNBC.com.
From across-the-pond, a potential Greek Tragedy remains on the radar, but fresh news drivers have slowed to trickle after a week of battery style testing. At the same time, fellow Debt PIIGS constituent Spain has tried to pick up the slack after Moody’s downgraded a slug of that country’s banks.
In those often intertwined markets of notice and as if to suggest bulls are growing tired and bears weary of oversold conditions, both the Global X FTSE Greece 20 ETF (GREK) and iShares MSCI Spain Index (EWP) are up about 2.50%. Similarly, a battered EUR/USD is up 0.40% after trading as low as 1.264 and afford one of those “good enough for traders” double bottom lows versus the currency pair’s January low of 1.262.
After a finish of 24.50% at session highs and the cash 16% above its 10SMA, the VIX ($VIX) is off 3.75% to 23.65%. With the fearful differential just shy of a loosely observed 25% - 30% historical fear zone and full-fledged testing of 1278 – 1300 zone support in the SP-500, the action looks to back a corrective low for the market after a drop of nearly 9% from the April highs.
And the iShares Bull ETF (AAPL) is finding bulls grazing with shares up 1.10%. A couple supports of notice, well to us at least, is AAPL having tested its 50% retracement level from its late January pre-earnings close of $420 to its April 10 highs of $644. The action has also established a “mirror move” or AB = CD pattern of 100% from those same highs set in April to this week’s lows.
On the corporate confessional side and not plastered on someone else’s page in cyberspace as far as we can tell, shares of Salesforce.com (CRM) are up 10.50% after topping profit views by $0.03 on earnings of $0.37 and stronger-than-forecast sales growth of 37.8%.
Looking forward, the cloud and customer relationship management software play bumped up both its Q2 and FY13 EPS and revenue outlook to bullish-bracketing ranges versus Street views. Technically speaking, while today’s results have been well-received, bulls look to have their work cut out for themselves based on an existing 1.5 year, five-point inverse triangle pattern with zone resistance of about 150 – 165 looking quite formidable.
Finally Comex Gold (GLD) is displaying relative technical strength for a second day after its own “good enough” test of its December lows. With gains of about 1.10%, its two day total stands at 3.35%. In those sometimes accurate heat-seeking option markets, previously discussed call buying in the July 160 call yesterday which looked to confirm the technical low is performing very nicely for those bulls so far.
Two blocks totaling nearly 38,000 contracts for about $2.30 in the GLD July 160 call on Thursday are showing paper gains of $0.70 with the call trading for $3.00…and no signs of buyer’s remorse or happier adjusting in-the-mix, just yet. Extra analysis on GLD can be found in this morning’s Trader’s Radar found on the Optionetics homepage.
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
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