The markets

The Nasdaq was up 0.98% last night and was the strongest of the major indexes. The S&P 500 was slightly down, 0.6%, the Russell 2000 was down 0.25%, the industrials were down, 0.27% and the transports were down, 0.12%. So all the major indexes were down, except for the Nasdaq, which was up almost 1%.

In terms of the sectors, Biotech was the stand-out, up 4.12%, a fabulous move up. Health care was up 1.27% and technology was up , 0.56%, while financials and energy were both down – energy down, 1.61%, and financials down, 0.82%.

Biotech blooms

I have been expecting Biotech to break out for some time. You can go back and look at my blogs. I’ve been talking about Biotech since Monday and I’ve been discussing the sector in detail to my elite students. We have substantially profited from Biotech in the past days. In my blog, I again talked about the sector on Tuesday, stressing that some students were making more than US$2,000 a night. I pointed out that if IBB (Biotech) broke above that 300 resistance level then you could expect a very decent move higher from there. Biotech had a huge move up last night, 4.12%. Once it got above that 300 resistance level, which I spoke about, it exploded! It’s now worth $316.10 – an incredible move to the upside. It’s been great to be able to call that and then see it go off!

One of the biotech trades we’ve been in is XBI. We bought the 72 call option for the July contract. We bought that for $3.50 and that is now worth $7, so we have doubled our money since Monday, that’s just three days. What a beautiful trade! The other amazing trade, which I spoke about yesterday, was REGN (Regeneron pharmaceuticals). That moved up 5.39% or $26.69. I suggested to my elite students last night that we pick up the 495 call option for around $19. This contract is now worth $35. So Regeneron has had a remarkable move up in the past two days and we’ve benefited substantially.

So we have had two terrific trades in just a couple of days, one of them was a day trade and the other we put on last night. Both are winners and delivering great profits our way!

Technology also moved up last night. AMD is another of our trades. It is a technology stock and moved up 10.6% last night – again a significant profit. We got into the 13-call for 79c and it is now worth $1.51 – a magnificent trade.

Opening 30-minute highs and lows

The S&P 500 was fairly range-bound, but broke below the 30-minute low, which then became a resistance level – you could tell the S&P 500 was not going to have an up day. The same is true of the Russell 2000. It broke above the 30-minute opening range high around 10.30am and then fell below it around 11am, stayed range-bound for a while and then broke below the 30 minute opening range low at around 12.50 pm and stayed below it for the rest of the day.

The Nasdaq was range-bound for the first part of the day, broke above the 30-minute HIGH and then stayed above it for the rest of the day – bounced off it. You could tell the Nasdaq was going to be a strong index.

Going forward           

It is time to lock in profit and create riskless trades. Remember, it’s not the money you make, but the money you keep. You should be locking away profit and creating riskless trades. Yes, we’ve made great money but we don’t want to get emotional. You need to treat this like a business, play by the rules, lock in profit and reduce risk. That way we are not at the mercy of the market then we can trade methodically, without emotion and stick to our plan.

Tonight roll-up your profits on XBI and REGN. Please continue to watch the Biotech sector. It doesn’t have a lot of resistance until it gets up to around 325 on the IBB.

I will also be keeping a close watch on the Nasdaq. It has again finished above its 21-EMA and is holding that level. All the other indexes are well above their 21-EMAs, with the exception of the Russell 2000, which did break below it. This is an index to watch, it’s looking a little bearish. It closed below its 21-EMA on a daily chart. I would like to focus on that, given it’s starting to show signs of weakness. The industrials are looking very strong, even though they were down last night. They are above their 8-EMA. But transports are another one to watch. Transports came right down to the 21-EMA and is now sitting right on it. In terms of daily 21-EMAs, you should be keeping tabs on both the Russell 2000 and the transports.

It’s a ‘mixed’ market, with some indexes moving up and some showing signs of weakness. I will focus on the Russell and transports, to see if they continue to show bearish signs, and also closely watch biotech – does the sector want to keep moving up? But don’t forget to create riskless trades. That’s always the way to go!