Triple Witching Week

Well Traders, it's "Triple Witching Week" which means the markets are even more irrational than usual. Usually, I sit on the sidelines this week because being that it is Options Week, as well as the end of Q3, there is so much happening with the Mutual Funds and Hedge Funds that I let those guys battle it out.

The Dow had a big run up today, but as I looked at the MACD, the peaks have been lower with each higher peak on the daily price charts. This is a called a "divergence" and usually symbolizes a "false rally." So, being that the Dow is getting very close to the all-time high, it could be a predictor of a fall-back...time will tell.

CVS got taken out yesterday when the stock had an ealy morning fall, but I still made a 5o% return on the option after moving the stop-loss up. I'll take 50% returns ALL DAY, EVERY DAY!

JCP has finally got some steam behind it and has had three consecutive up days with decent and increasing volume, so that bodes well for my Call play on the bounce of 9/1. I was concerned when the stock fell back, but it did not break my support line so I stayed the course. Today, I was rewarded with a nice move and a close above the 30 day MA, which is nice as that can act as support now. My 1st target price for the stock is $69.50, which is the neckline for an Ascending Triangle play. Should the stock break that resistance level, I see a $7-$8 move from there. Wouldn't THAT be cool?

Finally, for consideration look at LH. The stock is bouncing off the MA, and the MACD and STO are perfectly positioned for a nice upside move. 1st target for the stock price is $69.25 with a 2nd target of $70.25. If it breaks $70.25, I seesomewhere above $73. Notice the Bollinger Bands are getting close to a nice squeeze which may indicate a substantial breakout.

Happy Trading!