chart2Wednesday looked to be a continuation of the Tuesday really, but towards the end of the day, the rally fizzled and a sell-off put the markets into the red. Part of the damper could be blamed on the pending bankruptcy of (GM) which was down 20% near the close.

Another reason for the sell off was due to the credit concerns which came back into the market. Even with an affirmation of the U.S. government’s AAA sovereign debt rating from Moody’s. The extensive debt issued by the government to pay for its stimulus and bailout packages has found support with foreign and domestic buyers, but traders are worried that the demand for Treasury bonds could fall if the economic recovery is as slow as some are expecting.

Volume was light today, financials/industrial/materials were all off. The 10yr bond yield spiked to a new 6 month high.

Wednesday I did just as I mentioned Tuesday night. I posted some news on various companies worth reading about and kept that short list as stocks that I would try to play. The one that I did get into was (MAPP). Yesterday I talked about how MAP Pharmaceuticals had a new migraine drug. Will this rally continued Wednesday and the stock was up 35% today alone. I managed to get in for 200 shares at $11/share. For a short while it seemed like the stock was going to head lower and I did have a stop loss set for $10.25 to protect from any sharp selloff. On the other end, I had a pre-set sell order for $12.90 which lucky for me, did hit later in the day. I could have set the bar higher and walked away with a larger profit, but today was still good.

Total profit on (MAPP) = $380

I was also watching (ZLC) which today took a nose-dive after missing earnings by a longshot. The stock did not show any sign of movement to the upside while I was watching it and since I have other things to do during the day, I walked away from this dead stock.

Here is the market summary video for Wednesday:

Looking at Thursday:
Economic Indicator:
8:30AM Initial Unemployment Claims
8:30AM Durable Goods Orders for April
10:00AM New Home Sales for April
10:30AM Crude Inventories

For Thursday I will be away for the majority of the day so probably not be trading. If I did have places to look for deals, I would stick with the (BAC) or (SKF) combo. (XOM) Exxon CEO did say on Wednesday that oil demand is flat at the moment and with a pending recovery slated to start in Q3/4 of 2009, this could be a good chance to get in on the next move upwards.

Also watch NRG Energy as its getting heavy bets on the options market for a pull back from its current prices. From the current price, the stock is being expected to drop to the $16-17 range. The stock has been flat at the current upper end since January and perhaps that is the best the stock can attain. If there is a pull back, wait for it to fall into the above range before considering a buy. Ofcourse the stock will not fall overnight, so keep watching it and eventually (NRG) will come down.

Happy Investing!

Aman, MBA

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