Stock And Option – End Of Day Comments For Oct 01 2012

The end of day comments for today has to start with the market itself. That market started with a roar right out of the gate and it did not take long for the Dow to be up 150 points. Most everything followed and it certainly seemed like the market was going to just keep on pushing. I spent the morning doing the Trading For Pennies strategy on IWM as I am continuing to refine the strategy to determine its usefulness and where, it at all, it could fit into my overall investment style and goals.

At lunch hour I was having trouble with an IWM trade when I noted that the market seemed like it was having a bit of trouble. Minutes later as the lunch hour started to draw to a close, the market commenced selling off. many stocks that I had followed, fell rapidly and a lot were in the red. The Dow chart for today is below.

Dow Jones End of Day Chart

The Dow Jones chart for today shows the dramatic open and then the selling hit. The Dow managed to hang on and closed with a gain of 77 points. The other indices were not nearly as fortunate.

Stock and Option Dow Jones Chart

S&P 500 End of Day Chart

The broader S&P 500 had a lot more difficulty once the selling hit. I wonder if the day had been a bit longer if it may not have turned negative. As it was the S&P 500 ended up just 3.82 points or 0.27%

Stock and Option S&P 500 end of day chart for Oct 1 2012

Stock and Option - S&P 500 end of day chart for Oct 1 2012

The NASDAQ ended the day lower with a loss of -2.70. This is a troubling sign for the markets and infighting within the Federal Reserve is not helping matters any. Today former Fed Chairman Paul Volcker was speaking and commenting that the Fed’s actions of QE3 are not inflationary. How much truth there is in this I don’t know but I would think if anyone does it would be Volcker, who crushed double-digit inflation in the 1980’s when he was Federal Reserve Chairman.

Stock and Option – XOM Stock

Exxon Mobil stock has been in my portfolio for many years. The recent decline in XOM Stock stalled today as the stock closed up by .35 cents. If the stock can continue to fall and reach the $89.50 or so, I will be back Put Selling the $87.50 strike. Looking at the XOM Stock chart below you can see that once the $89 valuation area is entered by the stock, I should be able to sell puts easily at the $87.50 naked put price.

Stock and Option XOM Stock

XOM Stock chart for the past 12 months

Stock and Option End of Day Summary

That’s about it for the end of day comments for today. Keep an eye out for XOM Stock to pull back and provide a very nice Put Selling opportunity. Aside from XOM Stock the big news for the market today was the apparent weakness in the indices. I never would have though it after such a big run-up first thing in the morning.

Candlestick chart analysis for today ended with a buy confirmation  on the S&P 500. I was surprised by this since the market definitely had a tough day. I would have thought that a the candlesticks for today would have signaled a wait and see approach.