The market did a total U-turn today from yesterday’s close and gain back more than it lost yesterday! This weekend, in my Market Forecast, I said,
“For the new week, the market should continue to look for confidence in the financials. We need to see the financials continue with their recovery process. Oils and the energy sector still look weak and could fall further, which would be good for the overall market. VIX closed below 23 last week. Below 22 would be very good for the market.”

I also mentioned about sharp drops such as what we saw last Thursday and on Monday being opportunities for the market to let out steam quickly and resume the recover process. After a brief lull, oil prices continued with its downward spiral, partially due to the strengthening in the dollar. The financials came back with a vengeance today and inspired the market to rally again! Among the leaders, BAC jumped +14.83% (I played those Aug 30 calls again, which more than doubled today! I think these can go higher). BAC can go back up to test $34 soon. MA and V were also strong, receiving favorable comments ahead of their earnings. MA and V were up +3.31% and +7.68%, respectively. PNC (up +7.74%; we started a new trade on this) and BLK (up +5.61%) both already reported great earnings look like they are ready to break out higher.

This morning, ALXN gapped higher on good earnings and a stock split announcement. OptionDragon was there to capture a near “bagger”:
optiondragon
Posted July 29, 2008 at 6:37 am | Permalink (Edit)
Out of some ALXN at $8.50 aug 80 calls from 4.70

X shares jumped more than +14% on record earnings. I think X should go higher from here, although it might need to trade sideways for a few days. BIDU continued were it left off yesterday and added almost $14.