I'm becoming more and more convinced that in order to trade this market on a day-to-day basis you have to have a rock solid idea as to which way this market is going to go, climb aboard and then hold on through the noise. This market spends most of its time on hold in tight little consolidating trading ranges. If you miss the initial move, whether it's a sell or buy program, you practically miss the only trade for the day (on the indices whereas you can still find individual stocks that have nice moves). Once the quick spurt is done the market goes back on hold.
It was expected that the market would go on hold as we exited the morning move since we have the job report tomorrow morning and the market seems to be jittery around that number lately, ever since the Fed has stated their next move will be data dependent. If the Fed sees too rapid a growth in job creation, or rapid wage increases, then they'll fret about inflationary pressures and that spooks the market into thinking the Fed will keep on raising rates. In actuality, the market should want the Fed to keep raising rates since that means they feel there's too much growth, which is good for stocks. It's when the Fed stops raising rates that the market should be concerned. In fact that is borne out in the results of the market after the Fed has stopped raising rates in the past. The market is consistently down 6 and 12 months after the Fed stops. So bulls rejoice--keep raising those rates! If the Fed even hints at a pause in raising rates again, and the market spikes up in joy, that's when I'll be backing up the truck to load up on long term short positions.
Speaking of wage increases, the other piece of data that the Fed uses with that is productivity. Bernanke has stated he looks forward to seeing wages increase (they've been declining for 8 years now) but wants to see an increase in productivity along with the wage increases. The improved productivity absorbs the higher wage cost and all is well with the Fed in that case.
Today's Productivity (preliminary) report showed a nice increase for Q1 of +3.2% which was higher than the expected +2.8% and a big improvement over the previous quarter's -0.3%. Unit labor costs were up less, +2.5%, but it too was more than the expected +1.3%. For the past year productivity is up +2.4% while unit labor costs increased +1.4%. The manufacturing sector showed an even stronger productivity improvement of +4.2% but was much stingier with their wage increases which fell -2.6%.
So let the employers out there start raising wages! Help out the poor working families struggling to make ends meet (especially after refinancing their homes with adjustable rate mortgages and their payments are beginning to balloon, but we won't go there tonight).
Unemployment numbers are on the rise--initial jobless claims were higher by 5K to 322K. This is the highest level since November. The 4-week average also rose by 5,250 to 314,250, and this too is the highest number for the year thus far. The uptick in jobless claims will actually make the Fed feel better (cold hearted people that they are) because it shows a lack of demand which keeps the inflationary pressures under control from wage demands. If people are fearful for their jobs they're less likely to ask for, or receive, wage increases.
Continuing claims rose by 21K to 2.46M, making it the highest level in 5 weeks. The 4-week average of continuing claims stands at 2.44M, up only 7,500 and just off the 5-year low of 2.43M. In the past year we've seen a drop in initial claims by about 4.4% and continuing claims have dropped about 7%. Economists claim the drop in continuing claims indicates the labor market is still strengthening. Keep in mind that the unemployment numbers reached their lowest level in 2000 just as the market was peaking and the economy was heading into a recession. Just thought I'd throw that in there. The numbers are also somewhat deceiving since the employment participation rate is stuck at 66.1% which is 1% below the pre-recession peak in 2000. Even after 4 years of an expanding economy the number of people that have remained unemployed for more than 27 weeks, and still looking for work (that's important), is 1.3M. That's a lot of pain out there.
Back to the market, it got an early pop this morning and then fizzled. Nothing like a flat Coke. So let's see what the charts are telling us.
DOW chart, Daily
Ding, ding, ding! Did you hear the bell get rung this morning? That was DOW ringing the bell at its Fib/Gann target of 11464 (missed it by a point). For those who might have missed it, the Gann level is derived from the Gann Wheel (covered in the April 3rd and 6th Market Wraps) and DOW 11464 is 360 degrees from the 10156 low back in October 2005. The Fib level is derived from a measure of the move up from the October low--it has two equal legs up at 11464 between the 1st leg up to the November high and the 2nd leg up from the January low.
So is that it? Is that THE high? Is the bull market now toast? If only it were that easy to know. I wish the SPX had also run up to ring its bell at 1324 but it's been a real laggard lately (although not as bad as NDX). The SPX has another 10 points to go to ring its bell and that would take the DOW up at least another 100 points. So I honestly don't know what the market will do here but the fact that the DOW stopped dead at this level I don't think is mere coincidence. I think we'll have our answer tomorrow--if the post jobs report results in a strong rally, keep an eye on SPX and the area around 1325. If we see a sell off that breaks below 11370, we just might have put in a very important high today.
SPX chart, Daily
Adding credence to the DOW high today at 11464 is the fact that the SPX has not been able to break much above its Gann level of 1309 which is 360 degrees from its October low of 1168. Both the DOW and SPX have now tagged their important Gann levels and I find it more than a little interesting that the SPX has in effect "waited" for almost two months at this 1309 level for the DOW to run up and ring its bell. Now that both have accomplished this, could that be it for both? It's an intriguing thought as I look the charts over tonight. It's entirely possible. No blow-off top, no fanfare, no announcement, just a petering out at the highs. Believe it or not that's often how it happens. So don't get lulled into thinking it can't be a top because we didn't have the capitulation that so many expect to see.
But again, if we get a strong rally tomorrow then it's likely we'll see the SPX head to at least the 1325 level. And if we did get something akin to a capitulation, we could easily see the DOW flare up to a new all-time high (above 11750) and SPX up to 1350-1380. That would certainly shake a few bears out of the trees. It would stop out most of the shorts and then finally set the market up for a steep fall without shorts to help lift it back up. Hopefully we'll get a few more answers tomorrow.
Nasdaq chart, Daily
Just like the DOW and SPX before it (in April), it appears the buyers have arrived just in time to save the COMP from a bearish fate. It has climbed back above its October uptrend line and 50-dma. It must now hold this otherwise a break back below this support would look very bearish. Until that happens, stay long but be holding the exit door open so you're the first one out. Personally I wouldn't buy this chart but then I'm not a fan of tech stocks at this juncture.
QQQQ chart, 240-min
If the Q's are chopping up and down in a bull flag then we'll see this break to the north out of all this. I'll believe it when I see it. This is a choppy mess and could run a full point in either direction and it wouldn't tell us anything. I view this as too difficult to trade and would find something else until this decides which way it's going.
The semiconductor equipment index (SOX 526.84 +1.3%) rallied today, with some people attributing it to reports that Applied Materials (AMAT 18.55 +0.49) has agreed to acquire Applied Films (AFCO 28.03 +5.06). This is viewed by Wall Street as positive for AMAT's existing business and many feel that it presents new growth opportunities.
SOX index, Daily chart
Same with the SOX as the Q's, and tech in general--I would not buy this chart. While the sideways coil could be considered bullish after the strong run up from the October low, internally the price pattern doesn't give the warm and fuzzies. It looks more like corrective bounces getting ready to give way at any moment. If long the semis you definitely want a foot holding open the exit door. It takes a rally above 533 to get me interested in the long side. A break below 505 could spell real trouble for the SOX.
The one thing that has me feeling short term bullish about the market is the amount of negativity creeping into the market. It seems a lot of people are anticipating a steeper correction from here. We all know what happens when too many people expect something.
Whenever I see mainstream media making market predictions I usually look to trade in the opposite direction. It's a well known fact (well, maybe not so well known since most individual investors seem to follow the mainstream media) that the market typically peaks around the time mainstream media begins reporting on how bullish the stock market is. The covers of Business Week have been used for years to show (after the fact) that their bullish or bearish magazine covers were at the turning points in the market.
The reason for this is because by the time most people recognize a long term trend, the magazine editors get on board and want to write articles of interest (meaning articles that will sell magazines). If they write an article that most people recognize and read for affirmation then more magazines will sell. (And you thought they were just doing a good public service). When most people recognize a trend we know that the trend is just about finished. The investing public is known to buy the tops and sell the bottoms. Hence these magazine articles tend to be good indicators of tops and bottoms.
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Well we now have the opposite problem in my mind. We have a mainstream publication talking about now being a good time to sell. An article titled "Headed for a Fall" by Paul J. Lim in U.S. News & World Report was essentially recommending people take refuge from the many asset bubbles we currently face. While I agree with the author I'm wondering right now if we have too many people crying out "the sky is falling!" Again, we know what happens when too many people expect something. The "sell in May and go away" crowd has been particularly loud this year as the market has struggled to hold onto the year's gains and we press up against very visible resistance.
As Lim stated in his article, Jeffrey Hirsch, editor of the Stock Trader's Almanac, thinks the Dow will peak at around 11,500 but could then plummet to around 8,500. This would represent a 26 percent plunge in equity values. "It could be a little more, depending on how ugly things get," says Hirsch. Liz Ann Sonders, chief investment strategist at Charles Schwab, says, "we may be in store for a midyear pullback that's a little more severe than we've experienced in the last several years." At the very least, says Jeffrey Kleintop, chief investment strategist for PNC Wealth Management, the market could give back the gains it has achieved so far in 2006.
Many people are assuming that the real estate market will be the first bubble to pop. We know it's vulnerable since it's overinflated at the moment and the rising interest rates will likely kick speculators out of the market (the "flippers" and landlords). Their selling could pump up the inventory of homes on the market and put pressure on selling prices. The higher interest rates could also jack up the foreclosure rate which will only increase the number of distressed sales and depress selling prices overall. If banks get hold of these properties the 2nd mortgager can kiss his money good bye since the primary lender will only be interested in selling quickly to get his money out.
Real estate has appreciated quickly and therefore a lot of people are worrying about the housing market popping first. But many investors are not aware that the stock market has outperformed real estate since the big decline in stocks ended in October 2002. Equities have advanced nearly 20 percent annually. So where's the bubble really at? If you answered both you may go to the head of the class. But we're more interested in the stock market here so that's what we're trying to focus on now. With so many people calling for a pullback, and many positioning for it, the bears could be in for another surprise.
I've mentioned the indicator I follow from Dr. Robert McHugh at technicalindicatorindex.com which he calls his PPT intervention risk indicator. Basically this measures the 10-dma as a percentage of the 30-dma of CBOE equity put options. In the past, each time this has climbed above 18% the market experienced a flare up. This was caused by the Boyz (mega-bank trading teams) and their buy programs (with the help of Fed money) which then caught the bears and their put positions by surprise and the shorts ran for cover. Here's a chart showing this indicator as of last weekend:
PPT Intervention Risk Indicator, courtesy Dr. Robert McHugh, technicalindicatorindex.com
The current reading is just shy of 22% after climbing to 24% last week. One thing to note on this chart, that's different from previous times this has sparked a rally, is that price is closer to a top than any kind of pullback low. What this does tell me though is that many people are non believers in the rally. This is the proverbial wall of worry and the reason it works in a bullish way is because those who do not believe in the rally keep trying to short it. As they cover their shorts on a new rally, it creates additional buying pressure. It's ironic that those who are the most bearish are the ones helping drive the market higher. When the buy programs start they tend to be relentless and have few and shallow pullbacks. This creates a panic buying session as soon as more buy programs are initiated.
The favorite tactic for these trading teams is to hit the market when it appears most vulnerable. It could be lots of negative divergences, a sell off on bad news, or just the mere threat of a sell off. A spike down is then followed by the start of the buy programs and off she goes. And the ticket for this ride is the relatively high number of equity put options which can create follow-through rallies since the higher number of short positions in the market takes longer to get unwound. This might be due to the high number of retail investors who own these puts and they tend to be the weaker hands. So the strong buying kicks them out quickly and the added buying volume from them kicks the rally into high gear.
I don't know if we'll see that happen in the next week or two but we're primed and ready to go. Now it's a matter of the Boyz pulling the trigger. Will they or won't they is the question. Is the Fed pouring more money into the market right now? We don't know because M-3 is no longer reported. Watch the US dollar and gold for some clues in that regard (a sinking dollar and rising gold are potential clues that the Fed is pumping in money). But if we do get another buying panic it could be the blow-off top that many times marks the end of a move. It's always risky shorting a blow-off top (or buying a market flush) but a fast move higher from here would be an excellent time to watch for initiation of some longer term short plays, such as LEAP puts and bear call spreads.
It's a dicey time in the market right now. All the chopping around and lack of direction has both sides scratching their heads wondering who's winning the tug of war. The banks and securities broker indexes are normally good indications of what the market is going to do. Many keep an eye on Merrill Lynch (MER) for this reason. They don't call it Mother Merrill for nothing. As the next two charts show, even they don't quite agree on what could be coming next.
BKX banking index, Daily chart
The banks got a real shot in the arm from last week. This looks like it's consolidating for another push higher. But it achieved a Fib projection on that thrust higher and therefore could be done (a blow-off top in the banks?). This is obviously in an uptrend and it will take a long fall before breaking that uptrend but a drop below 377 would be a heads up that the high is probably in. It feels like it's too late to chase this higher but too early to short it (which could be true for the broader market as well).
Securities Broker index, Daily chart
I'll keep showing this chart until we get confirmation from the borader market since this index is a good proxy. It has broken several layers of support but is holding onto its 50-dma as of today. It needs to hold there and climb back up otherwise it will spell trouble for the broader market. If this lets go of support I'm guessing the banks will be heading back down as well.
U.S. Home Construction Index chart, DJUSHB, Daily
The home builders have broken all kinds of support with one last one before there's lots of space below them. The April 2005 low (not shown on this chart), which is where the H&S neckline originates, is at 781 so this index is trying to find support there. This is due some consolidation of the sell off before proceeding lower and it looks like it will probably head down below 750 before it gets an appreciable bounce weeks from now.
A sharp drop in the price of oil the past two days had little impact on the market. It's probably safe to say the market has learned to ignore oil prices. Until there's evidence that high energy prices have filtered through to higher prices that affect CPI it seems the market doesn't care for now. That's not the right "attitude" since high oil prices will curtail consumer spending which will cause an economic slowdown but the market seems to be looking the other way for now. If that weren't true there would have been more relief seen in the equity market the past two days.
Gasoline futures dropped below $2, down from a high of $2.23 on April 19th. A bill was introduced in the Senate aimed at boosting U.S. energy efficiency and reducing our dependence on foreign oil. The U.S. Energy Secretary also said the Bush Administration is mulling over lifting ethanol import tariffs. These, and the fact that gasoline inventories increased at the last report, contributed to the drop in gas prices. Prudential downgraded Archer Daniels Midland (ADM 40.00 -3.32), a producer of ethanol, as people locked in profits of 69% year-to-date.
Oil chart, June contract, Daily
Oil spiked down the past 2 days and dropped briefly below $70 before closing above it today. I expect this to continue to chop its way lower as depicted on the chart. The one fly in the ointment for that expectation is the chart below on the oil stocks. They have not pulled back nearly as sharply the past 2 days and that divergence might mean oil will turn right back around and head back up. Or it could mean the stock holders think it will turn right back around and when they recognize that oil is continuing to drop, they could bail out of the stocks in a hurry.
Oil Index chart, Daily
As mentioned above, the fact that the oil stocks haven't spiked down with oil the past 2 days may be a heads up that oil is going to turn back around. But if oil continues down I expect recognition to hit the stock holders and this will sell off faster so watch the two together. If this continues to chop its way lower keep an eye on the 50-dma at 575 and then the 200-dma at 550.
The DOW Transports got a big lift today thanks to another sharp drop in oil and a 14% jump in Expeditors International (EXPD 103.80 +16.04), which posted a 70% rise in Q1 profits, raised its dividend and announced a 2-for-1 stock spilt. This index is so easily manipulated now that the NYSE made some strategic changes to it that I find it hard to trust as a reliable indicator anymore. But many traders do so here's the chart:
Transportation Index chart, Daily
Looks a little like the banks here--blow off top in the making? This is clearly showing negative divergences at each new high so it's entirely possible. This last thrust up could be completing the EW count for the 5th wave and it stopped at the top of its parallel up-channel. This is too late to chase to the upside and too early to short (maybe). A break back below 4770 (the previous double-top) would suggest a high is in.
U.S. Dollar chart, Daily
The US dollar has firmly broken support but may find support around $85.30 which are the highs of February and April 2005. It should be due a consolidation of its sell off and may now find the $86 area as resistance. This should head for the Fib projection of $83.40 before it gets a longer consolidation/bounce.
Gold chart, June contract, Daily
Another metal, another parabolic rise. This seems to be the way of the metals. And they all end the same way--badly. If you're a short term trader in gold you should be protecting profits here and perhaps thinking about shorting gold. We should be finishing up a wave count that calls for the end of this rally leg and that could mean the sharp correction is coming. Typical retracement here would be a sharp thrust back below $600. But like all parabolic rallies, it's hard to know for sure how long the irrational exuberance will continue.
Results of today's economic reports and tomorrow's reports include the following:
Tomorrow's economic report include the numbers the Fed watches carefully as part of their "data" to determine what their interest rate policy will be. The market's interpretation of this data, and its guess as to what it will mean to the Fed, is what produces the volatility around these numbers. Once the dust settles after the cash open we should know whether the market is going to rally or has topped out. It could be an important day.
Sector action was almost completely green today even though the market didn't feel particularly bullish. The only red sectors on my list were those in the energy fields, which were led to the downside by the natural gas index (XNG.X) which was only down 0.9%. The green sectors were led by the Transports, gold and silver, disk drives, airlines, SOX, biotechs and cyclicals. The only common theme in the losers and winners was the price of oil, which was down $2.30 (-3.2%) to $70.00. Certainly the airlines and transports liked the drop in oil.
April same-store sales figures from more than 60 retailers came in and were generally positive, showing the consumer to be still in a spending mood even after high gas prices and interest rates. The Easter season and warm weather are credited for the robust sales numbers--up +6.5%. Wal-Mart (WMT 46.38 -0.29) reported a 6.8% increase in comparable sales, in line with its recent pre-announcement, while Costco (COST 55.53 +1.57) beat forecasts with a 7% rise in April comps. Teen retailers American Eagle (AEOS 33.61 +1.08) and Abercrombie & Fitch (ANF 63.26 +2.92) posted gains of 19.0% and 17.0%, respectively, while specialty apparel names Talbots (TLB 25.59 +2.05) and Limited Brands (LTD 26.32 +0.82) also posted strong monthly sales. Gymboree (GYMB 32.87 +1.80) handily beat forecasts with a 19% year/year comps growth. Even Starbucks (SBUX 38.80 +1.44) did well, saying Q2 profit rose 27% on 24% revenue growth. The retail sector (RLX.X 476.43 +1.75) was only up +0.4% after diving initially this morning (sell the news?) and then recovered most of their loss before going flat with the rest of the market.
The internals of the market looked more bullish than bearish although the larger than normal number of new 52-week lows as compared to new highs (147 to 567) continues to show some churning going on in the market. This kind of action is usually found at market tops. But the advancing volume and advancing issues trounced declining volume and issues so by that measure one could assume that stocks were being accumulated today. And it's that accumulation that could lead to another rally leg tomorrow once we get past the jobs numbers. It probably won't matter what the number is, the market just wants it in the rear view mirror.
Based on the consolidation today near the highs, and even late-day highs in the more speculative tech and small cap stocks, I'd have to say I'm leaning toward seeing a rally tomorrow. I say leaning because the DOW hit what could be a significant high at 11463 (11464 is a Gann and Fib target for the end of the rally). If that level can be broken to the upside and looks to be holding, I'll be looking to buy the dips because we could be set up for a very strong run higher. It could even flare up as the Boyz hit the buy programs and get the shorts to run for cover. This could even go on into the end of the month and easily take the DOW to new all-time highs. It could be a blow-off top and you don't want to fight those.
But the market needs to get in gear tomorrow to make a run for new highs. If it can't do it tomorrow then my bear claws will grow and I'm dropping the horns. My long term bearish view will be joined by a short term bearish view and I'll be looking for opportunities to get short. The market should tip its hand tomorrow, or at least I hope it does. I hate to think the market will go on hold until FOMC next Wednesday. If that happens shoot me now to put me out of my misery.
Watch an early reaction to the job numbers tomorrow, especially right after the cash open. Many times there is a head fake move to suck in the wrong side and then pop them out with a fast reversal. It's like a sling shot technique--pull the rubber band back and then let it go and watch the wrong side scramble to cover their positions. Bulls will want to see the techs and small caps continue to lead. From a day trading perspective I'd want to see the DOW over 11470 and holding before thinking long. Bears will want to see it break below 11380 and stay there in order to get some traction to the downside. Longer term bulls don't have anything to worry about until the DOW breaks below 11190 although I'd be getting a little nervous below 11270.
Just like the upside target for the DOW at 11464, SPX has had a target on my chart at 1324 so any upside push could hit the wall there (DOW will probably be pushing towards 11550). Unless of course we'll be facing a blow-off top in which case SPX could easily achieve 1350. Any break below 1297 would have me nervous about long term longs and a break below 1285 would have me out of all my stock positions (or hedged). We're in a very noisy choppy environment here and it could be lulling both sides into even greater complacency. Tight trading ranges lead to expanded ranges and we don't really know which direction it's going to break. But don't get caught flat-footed on the wrong side because it could be a very painful move against you. Continue to trade light, be quick to get in and out if you're trading this, and continued good luck in a very difficult market. See you on the Monitor.
Autoliv - ALV - close: 57.53 change: +1.14 stop: 54.99
Why We Like It:
BUY CALL JUN 55.00 ALV-FK open interest=526 current ask $3.50
Picked on May 04 at $ 57.53
Apple Computer - AAPL - close: 71.13 chg: -0.01 stop: 68.45
Uh-oh! Reversal alert. Not only did AAPL failed to join the markets in a generally widespread rally on Thursday but the stock broke through resistance at $72.00 only to reverse course. We have been triggered at $72.25 so the play is now open but we're not suggesting new positions right here. We would either look for a bounce from the $70.00 level or it simple 10-dma or wait for a new relative high. Our target is the $77.45-80.00 range.
Picked on May 04 at $ 72.25
Progressive - PGR - close: 107.00 chg: +0.44 stop: 103.95
PGR did manage to rally with the markets today but failed to breakout over the $108 level or the 200-dma. It is our plan to exit tomorrow near the closing bell but more conservative traders may want to exit earlier, like tomorrow morning. PGR is due to announce earnings on Monday, May 8th but that date is still unconfirmed. More aggressive traders might want to think about holding their positions. The stock is due to split 4-for-1 on May 19th.
Picked on April 23 at $106.46
Red Hat - RHAT - close: 30.97 chg: +0.15 stop: 28.81
RHAT did continue higher on Thursday and hit a new five-year high over the $31.00 level today. Shares even hit our trigger to buy calls at $31.11. Unfortunately, it failed to hold most of its gains. We would not suggest new bullish positions with RHAT under $31.00. Now that the play is open our target is the $34.75-35.00 range.
Picked on May 04 at $ 31.11
Affiliated Mangers - AMG - cls: 98.01 chg: +1.12 stop: 102.55
Financial stocks tried to rally today but as a group they didn't seem to get very far. Shares of AMG rose 1.1% but volume came in below average suggesting a lack of confidence behind the move. We would watch for a failed rally near the $100 level as the next bearish entry point to buy puts. The 10-dma and 50-dma should offer additional overhead resistance. We do see two obstacles for the bears. The simple 100-dma, currently at 94.10, and the $95.00 level might offer some support. Conservative traders may want to exit near the 100-dma. We would expect a bounce near $95. Our target is the $92.00-90.00 range.
Picked on May 01 at $ 97.45
Amazon.com - AMZN - close: 34.48 chg: +0.52 stop: 36.51
AMZN was due for a bit of a bounce and an analyst upgrade to a "hold" helped the stock turned in a 1.5% gain today. Watch for resistance near $35.00 and/or its simple 10-dma. Our target is the $31.00-30.75 range.
Picked on May 01 at $ 34.85
Atheros Comm. - ATHR - close: 25.86 chg: +0.21 stop: 26.51
Semiconductor stocks continued to rally today after some positive analyst comments on semi-equipment maker Applied Materials (AMAT). The SOX index rose 1.3%. Shares of ATHR added 0.8% but failed to hold on to its breakout over short-term resistance near $26.00. We remain very cautious here. The lack of volume on the bounce is a weakness in the bull's case here but the bulls seem to be more in control than the bears. We're not suggesting new plays here.
Picked on May 01 at $ 23.77
Research In Motion - RIMM - cls: 74.81 chg: -0.12 stop: 79.01
RIMM's failure to rally higher with the tech sector today could be good news for the bears. We remain bearish but hesitate to suggest new positions right here. Our target is the $71.00-70.00 range but more aggressive traders may want to aim lower.
Picked on April 30 at $ 76.63
(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)
Fedex - FDX - close: 118.20 chg: +4.02 stop: n/a
The Dow Jones Transportation index rallied to a new all-time high today. This helped lift shares of FDX to a 3.5% gain on strong volume. It looks like the call side of our strangle may end up being the winning bet. We're not suggesting new strangle positions at this time. We were suggesting the June $120 calls and the June $110 puts. This is a bet that FDX will trade significantly north of $120 or under $110 by June option expiration. Our estimated cost is about $2.60.
Picked on April 30 at $115.13
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