1:10pm (EST)

The Dow has come off its high of 9,288 and is currently up 83 to 9,255. After such a strong open we are seeing a slight pullback which will help us determine just how serious the bulls are this week.

The S&P 500 briefly touched 1,000 and is at 999, up 11. The Nasdaq also broke 2,000 and is up 19 to 1,997. On 7/19, here was my fearless prediction:

“With the Dow at 8,734 and the S&P 500 at 940, I’d say the bulls are going to do something special or we will fall back into a trading range once again. That wouldn’t be so bad but it would set-up a bigger stage for a more explosive move either up or down. However, given the momentum, it appears the bulls are in firm control and willing to push us to new highs. Dow 9,000? S&P 1000? Nasdaq 2,000? Those are the targets on the scope and we have enough meaningful earnings this week to make a run at those levels.” (END)

Now that we are here, this week takes on even more meaning.

We have seen great results with some of our positions this morning and I will do a complete wrap tonight. Cisco Systems (CSCO, $22.32, up $0.31), Bank of America (BAC, $15.53, up $0.74) and Ford (F, $8.49, up $0.49) are all higher and there is another trade I’d like to add to the mix. But before I do, close the BofA August 15 calls (BYOHO, $0.94, up $0.44) RIGHT NOW. There is some news leaking as I type…

The other company is Nvidia (NVDA, $13.10, up $0.17) and they manufacture graphic chips. Nvidia has long been the best of breed in this lucrative market and its stock price is nearing its 52-week high of $14.12. The one thing that I don’t like is the fact that the company will report earnings on Thursday.

The August 13 calls (UVAHM, $0.80, up $0.09) could do well if Nvidia can make it past its high but there may be an opportunity for a quick trade BEFORE earnings. I like positions at current levels and would set $1.00 as an initial exit. If you buy 10 contracts it would cost you about $800, or if you did 20 contracts, it would be around $1,600. You are only looking to day trade these options up until earnings and we are only looking to make a 20%-30% return.

These call options have already traded over 2,000 contracts so they are pretty liquid.

Rick@OptionsMentoring.com