12:40pm (EST) Is it me or does it feel like we are watching paint dry? In what should have been an easy grand-slam today, the Dow is having trouble punching through that 10,000 point brick wall. We got a strong pop and then lost some of the fizz shortly after the market opened but the bulls seem to be gathering more strength as we head into the afternoon. Currently, the Dow is up 113 points to 9,984 and has traded as high as 9,991 but we have yet to “break on through to the other side”… One thing that worries me is that everyone expects all of this “new money” to come into the market, which it very well could, but I want to talk about the emotions of investors and the market in general. First off, where were all these people when the March lows were around and why didn’t they buy back then? When the Dow bottomed at 6,440 six months ago, I suggested buying longer-term call options to play the bounce as I knew we were in for a turnaround. Our trading rules are simple. You buy call options during bull markets and you buy put options in bear markets. There are times when we are looking for direction which can cause some losing trades but overall, you want to stay AHEAD of the trend. People were calling for a pullback in September and we said to stay focused on Dow 10,000. And we are almost there. Look, we don’t care about market direction. We want big moves. If the Dow does break 10K and we zoom higher, we will keep playing the upside with call options. If the market stalls from here and we have a sell-off, we will start buying put options. The reason I say this is because we are still in a trader’s market and the market tends to hurt the most people at the most inopportune time. I’m not saying we are setting up for a correction but the Dow needs to break 10,000 today and hold. There are a number of heavy hitters set to report earnings the rest of the week. International Business Machines (IBM, $127.21, up $0.19), Google (GOOG, $533.68, up $7.47), Goldman Sachs (GS, $193.01, up $5.78) and Bank of Amercia (BAC, $18.37, up $0.56) are on deck over the next few days. Intel (INTC, $21.05, up $0.56) has treated us well today and our current subscribers easily cashed out for triple-digit returns. We have updated the trade in the Members Area so make sure you login in get our current comments.]]>
