A Volatile Trading Session for Option Expiration Week After Quiet Days

S&P1,460.26-0.79-0.05% Nasdaq3,175.96-6.66-0.21% Dow13,596.93+18.97+0.14%
Oil91.9499970.08+0.09%  10-Year Bond1.777-0.005-0.28% EUR/USD1.2965-0.0002-0.01%

The first two days of the week were Rosh Hashanah Holiday or Jewish New Year, we had unusual quiet and boring trading days for the option expiration week. But today we finally had a wild and volatile trading session due to weak economic news globally and earning warnings from a few retailers and transportation companies, such as BBBY, FDX, NSC, which sold off hard.

By the closing bell, all major indexes finished at the session highs from gap down during the first half hour of trading. Our darling stocks AAPL, GOOG, AMZN and LNKD all closed near day highs in similar fashion. Everything seemed fine with rally still being intact although it felt not as easy as it looked, especially someone like me who has been observing the action of  the broad market.

Among U.S. public traded stocks today, 33% were up vs. 59% down; Semi stocks IPGP, KLAC, SWKS, sold off hard; Transportation stocks NSC, UNP, FDX, CMI, all sold down big along with Transportation index which was off by 2.8% today; Some other old leaders kept falling off and are not far from their year lows, such as NUS, BIDU, DECK, CSTR, QCOR, etc. Talking about evil stocks, QCOR is the worst of all which was cut in half to its year low $22 in just one day yesterday. MA had one of the wildest sessions by HFT with crazy move today.

All the above I mentioned, I can’t blame many traders who prefer to trade only index ETFs nowadays in order to avoid sudden disastrous price action on individual names. Perhaps for now, we have to forget about Dow Theory and follow the trend of the market until it starts working.

As we can see, this market remains a stock-picking market. With earning warning season on the way, it’s important to protect the gain by being observant and raising stops; otherwise, the price action of QCOR or IHS would happen to any stocks if not paying attention.  I haven’t traded AAPL much due to its limited daily swing unlike some sessions ago. I’m watching it carefully for its further technical development. To me, GOOG has had more powerful move. These two leaders are being watched closely as the hint of market directions. As of today, the oscillator moved down to nearly zero from 55+ last Friday, so it can move up and down accordingly. Stay open-minded!

Here below is an example of a wild stock move – QCOR chart with notes:

To do well in short-term trading, it takes full-time attention and dedication. It takes considerable amount of self-control to trade well.” – Gerald Loeb

Trade safe and well! 🙂

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About Angela Zhou @z8angela on Twitter

I am a full-time swing/day trader trading stocks & options. I got into stock trading/investing since the internet bubble in 1998. I am optimistic in life and objective in trading. The purpose of this blog site is for me to share my trading experience and market view with others. I may write something about life experience and living, too. My motto is: A Great Mind Becomes a Great Fortune. I love people and life, and I appreciate beauty in everything. Thank you for viewing!
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