1. Commentary 2. Dow Takes New Shape 3. TiVo Hits 52-Week High 4. Earnings 5. Current Trades 6. Closing Thoughts Visit us at Blog.OptionsMentoring.com for live daily market commentary during the week. To join our elite trading service that offers you the chance to “earn while you learn”, go to WinningWithOptions.com. ************************************************** 1. Commentary It was another week and another win for the bulls as the market continued its impressive run as we roll into June. The market went out on a high note on the Friday before which led to last Monday’s surge. The momentum lasted for much of the week although we got a little hiccup on Wednesday but that was the only day the bears had any ammo. We got bits of good news as well. The big one was the unemployment number on Friday. It was a mixed bag as unemployment rose to 9.4% but Non-farm Payrolls came in at -345,000. Wall Street was expecting 9.2% and a loss of 520,000 jobs. The housing sector also shined some sunshine the bulls’ way after it was reported Pending Home Sales rose to 6.7%. Construction Spending also picked up and Consumer Spending fell less-than-expected (-0.1%). All of this was welcomed news of course and it shows there are signs of life out there. The market still looks poised to run higher and I echoed that sentiment last week. Until something changes, which could happen in a New York minute, the trend is still higher. ************************************************** 2. Dow Takes New Shape This was from Tuesday’s blog. Quotes are from 6/2/09. As you can see, I was still calling for a higher market on Tuesday: “Out with the old, in with the new. Sorta. The Dow managed to extend its May gains with a 221 point pop on Monday. The 2.6% advance took the index to 8,721 and right up to resistance. The strong close has the Dow challenging the 9,000 level and the high for the year of 9,175. The “rebound” we have seen from the market in general has been profound. Just like the selling pressure on the way down was. A couple of stocks that could give the Dow some added momentum were the two added yesterday, Cisco Systems (CSCO, $19.50, up $1.00) and Traveler’s (TRV, $41.91, up $1.25). I’m a bigger fan of Cisco and it was a solid pick for the Dow. One of the big reasons Cisco was added is because of what is does and the role it plays in building out the Internet. The telecom equipment company has long been considered a “blue chip” and many on Wall Street were happy with this choice. When a stock is added to an index, it usually means that institutions will soon been buying the stock. Cisco has some serious resistance at $20 but if we can break that level and hold, we could see the stock at $22-$23 real soon. Investors are nervous and many on Wall Street have been saying “we are due for a pause”. Well, they have been saying that for a couple of months and many were calling for a dip in May. It didn’t happen. Most of the talking heads have been saying to “buy” a stock BUT to also buy put option protection. That is because they don’t know where the market or stock is headed. The market is always changing and that is what makes a market. Some of you have been writing me saying you are scared of a correction. Look, the market is always changing and some of our readers have never been thru a market like this. Before the Internet bubble, I remember seeing brokerage firms setting up shops in malls across America as the Nasdaq soared to 5,000. There was a young broker who was trying to sell me on the market. He was 19 years old. I’m not saying that was a bad thing but I asked him if he was ready for a “bear” market. He said we weren’t getting one but the fact is he had never been through a bear market. A lot of people were hit hard back then just like they were when the market hit its March lows this year. The point I’m trying to make is that there are always going to be bull and bear markets (and sideways markets) but the key is preparing yourself for them. That is why I am both a BULL and a BEAR. If we head lower then fine. We will start buying put options if the price is right and we see some good opportunities. However, that time is not here yet and we will see clear signs of a correction if we do get one.” – END ************************************************** 3. TiVo Hits 52-Week High From Wednesday’s Blog. Quotes are from 6/3/09. “TiVo (TIVO, $10.70, up $3.32) shares hit a 52-week high on Wednesday after a judge ruled that Dish Network (DISH, $15.56, down $1.68) and EchoStar (SATS, $16.12, down $0.25) will have to pony up nearly $200 million for “video-recorder” patent infringements. This was a windfall for TiVo as the company has lost money for two straight quarters. After reporting a loss of $4 million, $0.04 a share, versus a profit of $3.5 million a year-ago, TiVo could be on track for more royalties. There is another $100 million in the kitty that could come TiVo’s way from “accumulated interest” for judgments three years ago. Keep an eye on these developments. The June 10 calls (TUKFB, $1.20, up $1.15) were going for 5 cents yesterday and nearly 10,000 contracts traded hands today. That is a 2,800% gain for anyone who got in on Tuesday. I wouldn’t go chasing here, especially with the June calls but there may be a trade down the road”. – END Note: The June 10 calls closed at $1.00, down 30 cents, on Friday. ************************************************** 4. Earnings Monday: Blyth (BTH, $34.82, up $.022), Ferrellgas Partners (FGP, $17.00, up $0.20), FuelCell Energy (FCEL, $3.99, up $0.25), Pall (PLL, $26.60, down $0.70) and Quicksilver (ZQK, $3.49, up $0.21). Tuesday: 99 Cents Only Stores (NDN, $10.10, up $0.06), CRA International (CRAI, $28.51, down $0.12), Oxford Industries (OXM, $11.50, up $0.65), Pep Boys (PBY, $8.09, up $0.28), Shuffle Master (SHFL, $4.60, up $0.35) and Titan Machinery (TITN, $16.43, up $0.37). Wednesday: Hooker Furniture (HOFT, $11.96, down $0.06), Men’s Wearhouse (MW, $19.97, down $0.46) and Spartech (SHE, $6.37, up $1.11). Thursday: ArcSight (ARST, $18.19, up $0.44), Del Monte Foods (DLM, $8.20, down $0.20), Global Crossing (GLBC, $9.79, up $0.53) and Lululemon Athletica (LULU, $13.97, down $0.11). Friday: Duckwall-Alco Stores (DUCK, $15.12, down $0.38). ************************************************** 5. Current Trades & Closed Trades We launched our new trading service, WinningWithOptions.com on Friday and profiled a number of “Free” trades heading up to the launch. We are off to a strong start. We have already had a couple of triple-digits winners and most of the positions I profiled last week are averaging 20%-25% gains. Freeport-McMoRan (FCX, $57.16, up $0.83) was profiled in last week’s Weekly Wrap and was a monster. Subscriptions are going fast and I would really like to get you into the upcoming action. We have been “long and strong” for the past three months as the Dow pushes towards positive territory and everybody is getting scared of the rally. While others have been WAITING for a correction, we have been taking advantage of what the market has been giving us. Also, 2Q earnings season is just around the corner and it will be interesting to see what they will have to say. Remember back in October I said to wait for the banks to show a profit for TWO straight quarters before believing any financial rally. If we get another solid quarter, these stocks could take off again which means buying call options. However, if there are chinks in the armor, we may have an opportunity to start some short positions. With the pressure building up, there is no better place to be than right here to get our latest take on the market. Join WinningWithOptions.com today to stay in tune with current market events. WinningWithOptions.com We are offering special introductory rates of: 1 month – $97 3 month – $261 or $87 per month (10% off) 6 month – $462 or $77 per month (20% off) 1 year – $804 or $67 per month (30% off) ***Best Deal* To go straight to the secure order form, go here: https://www.winningwithoptions.com/secure/order_form.html For those who have signed up for our new service, expect an email Monday morning or late tonight. ************************************************** 6. Closing Thoughts There is a lot of talk calling for a correction and most analysts are cautious in their statements going forward. No one wants to call this a “bull market” but technically, we are in a bull market. Anything over or under 20% is considered bull or bear market territory. It is easy to call for a correction because the Dow has rallied 40% from its March low while the Nasdaq is up 17% YTD. The S&P 500 is the most followed out of the three and it is only up 2% for the year. This is what I’m looking at. Maybe Tech is a little ahead of itself but they have been the leaders for quite some time. Bull and bear markets don’t happen overnight. There were clear warning signs as we headed lower in September thru October. Then we got a mini Christmas rally that took us into 2009. Then we dropped again. Then rallied. The point is nobody could have called those moves although I did call for the correction in 2008 as we headed into August. I have also been the biggest cheerleader during the recent rally we have had. As you know, I’m both a bull and a bear which is why I can adapt to any market environment. I may have to switch gears but let’s wait for some signs before jumping off the bull’s wagon. Rick Rouse Rick@OptionsMentoring.com]]>