NASDAQ Chops Its Way Higher

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The NASDAQ finally broke its three-session losing streak on Wednesday as the beleaguered tech sector managed a modest reversal. The index finished higher by 0.21% to 6776.4. Unfortunately, the S&P couldn’t end its own three-day skid, though it only slipped by a meager 0.01% (or less than one point) to 2629.3. The Dow has now declined for two consecutive sessions with today’s slump of 0.16% to 24,140.9.

“There is some hesitation for both the bears and the bulls to push markets one way or another. The bears are looking to the potential of a government shutdown as a reason to sell. While the bulls will keep screaming “buy the dip” as the global growth story is still intact,” said Jeremy in Counterstrike. “I’m not sure which side is right, but I think you have to go on the side of the bulls for now.”

The market is dealing with a lot of uncertainties at the moment, especially the tax proposal that needs to be reconciled between the House and Senate versions. However, there are more immediate concerns this week, including the threat of a government shutdown and the Government Employment Situation report on Friday. The market seems to be in limbo until some of these question marks are answered.

In the portfolios on Wednesday, Options Trader cashed in a triple-digit winner and then reinvested in a different option for the same stock. Home Run Investor found a stock that seems set to move higher, while also providing the portfolio some diversification out of tech. Read more in the highlights section below:

Today's Portfolio Highlights:

Options Trader: The portfolio’s straight long call in CME Group (CME) has soared since its addition, so Kevin wants to cash in that profit and reposition into a new call with the original money invested. The editor sold to close the March 140.00 Call for an impressive return of 192%, and then bought to open a March 155.00 Call. By the way, the portfolio still has a deep in-the-money bull call spread in CME that could return 135% if it closes at or above $135 by expiration on Dec. 15. Read the complete commentary for more on today’s moves.

Home Run Investor: Brian Bolan is looking for more diversification in the portfolio, especially since technology has been getting beaten up of late. So on Wednesday, the editor sold the underperforming APPF for a 3.25% profit and replaced it with a position in Sterling Construction (STRL). The company recently posted a positive earnings surprise of 18% in its most recent report, marking its third straight beat. Revenue was also much higher than expected. Most importantly, STRL guided higher and earnings growth is now expected at more than 100% for next year. Read more about this new addition in the full write up.

Until Tomorrow,
Jim Giaquinto

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