The market was plagued by another late day selloff which erased earlier gains. When the dust settled, the DOW was up only 4 points closing at 11,812. The decline started shortly after the Fed announced no change in the Fed Funds Rate. Early in the day oil, natural gas and all the energy names sold off while the financials rallied. After the Fed announcement, everything turned around as oil, natural gas and all the energy names rallied into the close while the financials sold off. Before the bell Monsanto (MON) announced earnings that exceeded expectations, but the stock was down on the day. Apparently, the guidance going forward was not enough to spark a further rally. This stock has been on fire for the last several months and I have wanted to add the name to my portfolio for some time, but there just hasn't been enough of a pullback yet for me to get in. If the stock were to drop to $125, I would pull the trigger. After the bell, Research in Motion (RIMM) and Oracle (ORCL) both announced earnings. RIMM's results were a little short of the market expectations, and the stock sold off about 10% in after-hours trading. Oracle, on the other hand, announced very good earnings, but the stock sold off after hours as the company was cautious on their outlook for the next quarter.
News specific to my portfolio:
My portfolio was up .4% today which again outperformed the DOW. I think I'll start keeping score on a day-to-day basis. This week I'm 3-0, so that's where we'll start the record keeping. The biggest gainer in the portfolio today was Apple (AAPL) which was up more than 4%. There was no particular news on the company today. However, the stock did sell off some in after-hours trading most likely due to the RIMM news. I think you can buy this stock if it falls into the low 170's tomorrow. One other stock of note in the portfolio was US Steel (X). I have been talking a lot about the $185 level because this served as resistance for the stock for the last month or so. On Monday, the stock broke through that level and closed over $190. I think the $185 level now serves as support. Today we got good evidence of that as the stock sold off sharply early in the day, hitting an intraday low of $184.88. The stock bounced off this level hard and finished up 1.29% at $191.96. I still think this stock will see $200 by July, 4th. There was one stock in the portfolio that was a bad underperformer, The Chemical & Mining Company of Chile (SQM). I added the stock to my portfolio yesterday. In Tuesday's report, I mentioned that the stock had been on fire and I wanted to get in, even though I don't normally do that. This proved to be a bad decision and I quickly sold out of my position this morning when the stock dropped under $49. I decided there was a better way to play this than just taking the long side. After selling my shares, I bought one July 50 call and one July 45 put. Basically, I'm betting that the stock will continue to be volatile for the next few weeks. Hopefully, I will be able to sell one of these contracts for enough of a profit to cover the cost of both and still have some money left over. This is a risky strategy, but one I'm willing to try at this time given the volatility of the stock and what I perceive to be cheap premiums on the options. I made one other move today, selling some December 24 calls in Altria (MO). The stock had a nice pop at the open on an upgrade. When I sold the calls, the stock was trading around $21.75. By the end of the day, the stock had dropped closer to $21.25. It's a long time until December, but I feel like I know this stock pretty well and it usually doesn't move that quickly. In the past I have thought about selling calls when I felt the stock moved up too far too fast, but I always decided against it hoping the stock would continue upward. Today, I decided to sell the calls because I felt it would probably go back down in the near term. Only time will tell if I'm right.
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