11:30pm (EST)

The bulls battled back last week and let it be known they are not about to give up the gains from March without a fight.  This is normally a “bullish” time of the year with elections and the “Santa Claus” rally on the horizon but the bears have made it known they are going to hang around. 

We have mentioned that Dow 10,000 will be a battle ground and the index held up well on Friday despite a 10.2% unemployment number.  The Dow finished with a 17 point gain and closed at 10,023.  For the week the blue-chip index added 310 points, or 3.2%.

The Nasdaq added 7 points on Friday and 67 for the week to finish at 2,112 while the S&P 500 added 3 and 33 points and ended at 1,069.  The current momentum points to the rally continuing but it doesn’t mean you have to turn a blind eye to finding some short positions. 

We thought the market would have done more than it did Friday but it confirms our belief that we could be stuck in a near-term trading range.  If so, we will have to continue to be nimble and look for trades outside-of-the-box.

We have profiled quite a few winners over the last three weeks and we have played both offense and defense.  Our current subscribers recently locked up a 31% gain in Imax (IMAX, $10.82, up $0.26) call options, a 38% return in a bullish Barrick Gold (ABX, $40.20, down $0.08) play, and a 50% return on an Apollo Group (APOL, $56.57, down $0.22) put option play.

Our near-term targets for the Dow remain 10,300-10,400 to the upside and 9,650 is short-term support. 

For the S&P 500…it has been struggling with 1,100 but a break above that level could lead to a run to 1,200.  Support is strong at 1,000 and even down to 970 but a break below these levels will spell trouble.  

If the Nasdaq were to breakout, a run to 2,275 could be in the cards.  Support is at 2,000-2,025 and a break below that could mean a trip to 1,800 quickly. 

There are still numerous hurdles the bulls face; rising unemployment, the uncertainty of healthcare, and possible inflation the way the Fed is printing money but they seem determined to run.  As long as unemployment is in the double-digits, the Fed won’t raise interest rates and the bulls are expecting the liquidity to continue.  

Of course, the bears are banking on the exact opposite and seem poised to wait for the right moment to strike.  We continue to hear how high the market has advanced in such a short period of time but remember this.  If a stock drops 50% from $10 to $5, it will need to make a 100% return to get back to even.

If we look at the Nasdaq (because we think Tech is still the key) we have to remember we were at 2,500 in June of 2008 and hit a low of 1,300 by November.  The Nasdaq rallied from that low into 2009 only to be tested again in March.  Since then, the bulls have been on a runaway freight train and it only seems natural that it will eventually run out of gas.  However, even if the bulls have run out of gas, it seems they are still gliding on momentum.  Something to think about as the market tries to get back to “even”.

Third-quarter earnings are winding down as the heavy-hitters have already announced but there are still a number of companies that will confess to Wall Street.  Here are a few reporting on Monday:

Capitol Federal Financial (CFFN, $29.67, down $0.04), Carrizo Oil & Gas (CRZO, $24.62), Electronic Arts (ERTS, $19.00, up $0.84), Fluor (FLR, $45.40, up $0.15), Healthcare Realty Trust (HR, $19.98, down $0.19), Priceline.com (PCLN, $172.00, up $3.99) and Ticketmaster Entertainment (TKTM, $10.07, down $0.12).

We will be back in the morning with news on one of the aforementioned companies.  But before we close we would like to give a special thanks to many of you who have been following the Blog for 18 months.  All of you have followed us to our new home and we can’t thank you enough for your support. 

We also feel like we have the perfect name as momentum will continue to play a big part in the market’s moves.  And it doesn’t matter if it’s up or down.  We have shown that we can trade the tough markets, the easy markets and ones that appear to be stuck in a trading range.  

We hope many of you will extend your memberships and we look forward to bringing you even more profitable trades in the future.  As we head to press, Dow futures are up 32 points…