Most of Wall Street and Main Street is still on vacation or they've given up on stocks for the rest of 2008. Yet that isn't stopping the bears from taking another swipe at stocks. Today's excuse is the escalating violence in the Mid-East between Israel and the Palestinians. Geo-political tensions sent crude oil sharply higher and oil futures traded over $42.00 a barrel but the commodity has given up almost all of its $4.00 in early morning gains and trading back around $38.00.
Jim warned readers in his weekend wrap that stocks looked vulnerable. I'm starting to look at some ETFs for the major market indices as bearish candidates. The Russell 2000 small cap index, which had been the last of the major four indices to maintain its bullish trend of higher lows has finally broken its supporting trendline.
Chart of the Russell 2000 small cap index:
Trading volume is going to remain light today and probably the rest of the week. Friday does start the new year but many folks will just take an extended holiday. Look for volume to return on Monday, January 5th.
Currently the DJIA is down 114 points to 8402. The S&P 500 is down almost 12 points to 860. The NASDAQ Composite is off almost 33 points and breaking under the 1500 mark. The Russell 2000 is down about 15 points to 461.
Looking at some of our OptionInvestor candidates today I see that RIMM has broken down under the $40.00 level and hit our stop loss closing out our bullish play. AVB, a put play on OI, has surpassed our first target at $55.10 and is currently off 4.4% at $54.50. Meanwhile GOOG is down about 1.8%. GOOG is back under the $300 mark and testing last week's lows near $290.
Checking the PremierInvestor candidates we see that HAS broke short-term support at its 10-dma and hit our stop loss at 28.31, which was breakeven. Our new bullish play on HL is off to a strong start with shares up more than 9% to $2.71. Our new play on MPS has closed. Shares of MPS broke support at the $7.00 mark and hit our stop loss at $6.95 for a 30-cent loss. Our bearish play on DIS hit new relative lows today and is currently off 3.8% at $21.33. Plus, our bearish play on DWA is down another 3% and testing last week's lows.