9:10am (EST) Finally! Dow 10,000… It took over a year and most of yesterday before the Dow finally broke through the 10,000 level. However, at 1:20pm (EST), the hats went on at the NYSE. I know I have sounded like a broken record but let’s look at where we were at the end of July: On 7/30/09, here were my thoughts: “Sometimes the writing is on the wall. Make that…sometimes the writing is on the Blog. For those of you who have signed on this week, I do a Weekly Wrap on Sunday nights and in the 7/19 issue, I had this to say: “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) On 8/23/09: “The market has had an incredible run and the key levels we are watching are as follows. For the Dow (currently 9,505), watch for 9,625 which was the November high. A run above this level clears the way for…dare I say it….Dow 10,000. There is support at 9,000 but a break below 8,900 would send up a warning signal. As for the Nasdaq (2020), it looks like 2,100 is smooth sailing as long as the bulls continue to run this week. Above that, we get choppy but we could get a run to 2,275. Support is at 1,930 and further down at 1,800 or so. A break below that could lead to 1,600. The S&P 500 (1,026) could easily make a stab at 1,100 now that it has surged past 1,000 but 979 will be key support near-term. There is really nothing stopping the index from hitting 1,150-1,175 which is where headwinds will pick up.” (END) Well folks, here we are. The Dow is at 10,015 (up 145 points yesterday), the Nasdaq is at 2,172 (+32) and the S&P 500 (+19) is at 1,092. So where do we go from here? If you will notice from my 8/23 notes, we could hit 2,275 on the Nasdaq and 1,175 for the S&P 500. For the Dow, we could see 10,300-10,400 if the rally continues. Now, we may not see these levels during earnings season but there’s a good shot we end 2009 at those aforementioned levels. One company I want to talk about this morning before we get into the trades is Blackstone Group (BX, $17.11, up $1.21). I covered this stock in my Blog back in March and here were my thoughts on 3/25/09 (you can check our archives for the entire story and quotes are from that day): “There has been a lot of chatter about the prospects of Blackstone Group (BX, $8.22, up $0.41) this week and judging by the stock’s option activity, shares could be headed above $10 quickly. The company is a private equity firm that that could be a key player on how well the selling of the toxic mortgages off bank balance sheets evolves. Left for dead since September, this stock closed at $6.30 on Friday and had fallen from a high of $20. The stock added $1.50 on Monday and traded as high as $9.19 on Tuesday. I took a look at the option activity from Tuesday and there was a slew of buying all the way out until January 2010. Take a look: April 7.50 calls (BXDU, $1.29, up $0.09), High: $2.05, volume: 3,500 contracts. April 10 calls (BXDB, $0.30, unchanged), High: 70 cents, volume: 2,900 contracts. May 10 calls (BXEB, $0.65, up $0.25), High: $1.10, volume 1,275 contracts. January 2010 10 calls (KJLAB, $1.75, down $0.10), High: $2.45, volume 5,900 contracts. Notice the action in the January 2010 call options? These call options are 9 months away and for pigs and giggles, let’s say the stock is at $20 by then. If so, these calls will be worth $10 apiece or 5x their current value.” (END) The only call options that haven’t expired yet are the January 2010 10 calls (BXAB, $7.10, up $1.10). If you will notice, these call options now have a different symbol because in March they were LEAP options. The bigger picture is that these call options are now up 300% from an entry price of $1.75. Of course, I’m not recommending THESE call options to current subscribers but I wanted to update the trade because it was the only trade left “half open” from March. Many of you who have been with me before the launch of MomentumOptionsTrading.com have been asking and writing me about them. Close the position TODAY and roll them into the…Subscribers, check the Members Area for the latest trade updates. We have a new trade plus the rollout trade on Blackstone. Dow futures are down 33 as we head towards the opening bell…]]>
