Option Investor
Market Updates

Afternoon sell-off.

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Stocks are moving sharply lower as we move into the last hour of trading. It looks like bears will remain in control for the remainder of the day. The talking heads on TV are suggesting that fear over tomorrow's job numbers and unemployment report are sparking the sell-off. Did anyone really think we were not going to get a bad jobs number tomorrow? This is just an excuse to take some money off the table after a two-day bounce.

It is interesting to note that the U.S. dollar is moving lower but gold prices are not seeing a corresponding move higher. Even crude oil is not getting any benefit from the declining dollar. The current month futures contract on crude is off more than $3.25 a barrel to $43.53. Investors have no appetite for risk as money rushes into U.S. bonds. The yield on the 10-year bond hit another new multi-decade low today at 2.57%.

Here's a quick glance at what's moving on the OptionInvestor.com play list...

Amazon.com (AMZN) - Target exceeded. This stock continues to out perform. The stock hit an intraday high of $50.49 today. Our secondary target to exit was $48.50. Shares hit our first target yesterday. If you haven't taken profits yet you'd better hurry as the rally in AMZN fades.

Costco (COST) - Is still showing relative strength. The stock broke through short-term overhead resistance near the $52.00 level and is holding on to a 1.7% gain.

Lockheed Martin (LMT) - Target achieved. LMT hit $78.87 intraday. Our first target to exit and take profits was at $78.50. Shares are paring their gains and currently at $77.40.

XTO Energy (XTO) - Stopped out! The sharp sell-off in crude oil is weighing on the energy stocks again. XTO broke down under tested support near $34.00 today and shares are now off 9% at $32.48. Our stop loss was hit at $33.49.

The sell-off is really accelerating in just the last few minutes as I type this update. The Dow Jones Industrials have fallen more than 200 points in just the last 30 minutes and is now -241 at 8351. The S&P 500 index is off 3% at 844. The NASDAQ Composite is down 3.2% at 1444. The Russell 2000 small cap index is down almost 3% at 440.

- James Brown

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