Bears Are Growling

Bears Are Growling

1:00pm (EST) If you are a bull today you might as well head back to camp. The market is taking a beating today as the bears seem to be gaining momentum heading into Friday’s unemployment figures. The Dow is currently down 140 points to 9,570 and you can blame it on today’s ISM number (Institute for Supply Management’s index). The report showed manufacturing activity in September slipped to 52.6 from 52.9 in August, well below Wall Street’s expectations of 54. The bears loved it although the bulls will argue that it was the second month in a row the reading came in above 50. A reading above 50 indicates growth, and after contracting for 18 months, the bulls will point to the ISM number having back-to-back readings above 50. Also, adding fuel to today’s sell-off is the fact the Labor Department said new claims for jobless benefits rose more than expected to 551,000. Not good. The Street had been expecting claims to rise to 535,000. It’s been a volatile week but we have done well by playing what the market is giving us. Nike (NKE, $64.00, down $0.70) has slipped today and our $4.50 stop has been hit. For those of you just joining us, we profiled a Nike call option trade on Tuesday and closed the other half today for a sweet 173% profit. Others bought insurance and banked upwards of 75%. Not bad given the current market environment. We are also off to a good start in the Abercrombie & Fitch (ANF, $31.85, down $1.03) trade that was profiled in the Members Area this morning. At current levels, the trade has returned 20%. Friday is shaping up to be war for the bulls and bears. We should have a clear direction on the market before the opening bell rings. If we print 10%, it could get ugly and the bears could have their claws ready. If the unemployment numbers come in better-than-expected than the bulls will lead the next charge higher. I expect the last hour of trading is going to be crazy as both sides get ready for the Unemployment Report at 8:30am (EST) on Friday… Rick@MomentumOptionsTrading.com]]>

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