Sterling Market Commentary for Tuesday March 27th, 2012

A Look at Monday’s Market:  The overall market moved sharply higher in a broad based move that saw every index I track move higher on the day as well.  The strongest sectors were the airlines, High Tech, Financial, Retailers, Healthcare related, Chemicals, Gold/Silver, and the Transports.  In the commodities markets, Oil was higher by $0.16 to $107.03 per barrel, and Gold was higher by $23.20 to 1,685.60 per ounce.  In the grain market,  Wheat was higher by $0.052 to $6.594 per bushel, while Corn was lower by $0.084 to $6.360 per bushel, and Soybeans were higher by $0.136 to $13.794 per bushel.

A Few Thoughts on Tuesday’s Market:  In looking at the charts from Monday’s trading I noticed that several of the various indices I track set new yearly closing highs.  Those indices include the S&P 500 ‘SPX’,  the Amex Pharmaceutical Index ‘DRG’,  S&P Chemicals Index ‘CEX’, S&P Healthchare Index ‘HCX’, the S&P Insurance Index ‘IUX’, the CBOE Technology Index ‘TXX’, MS. Consumer Index ‘CMR’, M.S. Healthcare Products Index ‘RXP’, and the S&P Retail Index ‘RLX’.  Obviously on a day with a strong move such as we saw yesterday, the vast majority of the stocks we look at are going to have moved higher.  However despite the strong performance of many of the indices I follow,  not that many of the heavy volume stocks appear to have started new upward trends.  I think this is due to the heavy weighting of several key stocks in these indices, and the inclusion of some of these companies in multiple indices.

Twitter Model Portfolio Tweet Policy:  Currently Sterling Investment Services is managing a trading strategy based upon covered puts and calls.  Sterling Investments is currently running a “Model Portfolio” that is based upon this strategy.  It should be noted, that at this point in time, Sterling Investment Services is only “paper trading” this model portfolio, and not actually executing trades and creating actual positions within this model portfolio.  Therefore, please do not look for actual volume associated with our options selections.  It is Sterling Investment Services goal to initiate trading in an actual account based upon our model portfolio in the near future.  When that change actually occurs, Sterling Investments will notify its readers via Twitter and our website.

Yesterday’s Trade Selection:  On Monday we were looking at a covered call position on Incyte Corp. ‘INCY’.  However,  there was negative time premium in the options.  So no trade.