The futures are pointing towards another strong open this morning as the market looks to add-on to its fresh highs for the year. Dow futures are up 56 to 10,273, S&P 500 futures are up 7 to 1,099 while the Nasdaq 100 futures are up 15 to 1,788.
On Tuesday, the Dow closed at 10,246 and in Sunday’s Weekly Wrap we said the Dow could run up to 10,300-10,400 and that could easily be taken out this week if not today. We still think we are in a “trading range” but it will really get interesting for the bulls if they are able to break through the resistance levels we talked about.
Gold continues to surge to new record highs…$1117/ ounce. We caught a little of that action with our Barrick Gold (ABX, $43.13, up $0.13) trade and the move in gold over the last few weeks has been astounding. It seems like yesterday we were under a $1,000/ an ounce…
Before we go this morning, we wanted to profile the Priceline.com (PCLN, $204.22, up $30.49) trade we posted in the Members Area last Friday. It has been a monster of a trade so far and it’s why we burn the midnight oil. Here is exactly how the trade appeared in the update (quotes are from LAST FRIDAY):
Priceline.com (PCLN, $170.98, up $2.97)
Buy to OPEN PCLN November 200 calls (PNEKA, $1.10, up $0.05)
Set limit prices at $1.10-$1.15 to get in the trade but do not pay more than $1.25 for the calls.
The last time the company reported earnings the stock jumped from $130 to $150. We think Priceline.com is going to report strong Q3 results and a number of brokerage firms have recently raised their estimates and target prices.
This is an all-or-nothing trade as these calls will take a beating if the company misses earnings or the stock drops or even stays flat. We are going to need a HUGE move for the calls to make us a double but there is the chance we could get a 50% pop if the stock runs higher…” (END)
Folks, those same call options, the November 200 calls (PNEKA, $9.00, up $7.50) reached a high of $12 yesterday! That is nearly a 1,000% return if you were in at the bottom and out at the top.
Many of you wrote to us with great, funny and amazing results and we suggested leaving half positions open. The trade is pretty much over now as all we have to do now is manage the stop. Since we have already profiled the trade we thought we would share the update as well to give you a view on how we roll. This is exactly how the trade appears in our Members Area this morning:
Priceline.com (PCLN, $204.22, up $30.49)
November 200 calls (PNEKA, $9.00, up $7.50)
Entry Price: $1.10 (11/6/09)
Exit Target: $10.00 (closed half at $5.00 on 11/10/09)
Stop Limit: $4, raise to $7.50
Action: Wow. Our jaws are still dropped…
We can’t tell you how excited we have been over the last 24 hours as many of you started writing to us at the start of yesterday’s opening bell. The huge returns some of you have banked on this trade have been fun to read. This was our biggest trade to date since we started MomentumOptionsTrading.com and it was our pleasure to bring it to you.
I wanted to take some time to explain how the return is set up. If you had bought 10 contracts it would have cost you $1,100. When our update went out yesterday the calls were at $5 when we said to close half. That gives you $2,500. The other 5 are worth $4,500 based on yesterday’s closing price. That gives you $7,000 off a $1,000 trade.
Now, as far as the stop limit. Wait to see where these calls open because we can possibly ride this one for further gains. The $7.50 stop limit can be put in place if the calls OPEN over that. If they open lower than $7.50 then you sell them at the open OR watch how they trade for a few minutes. Either way, don’t give back your gains if the call options continue to fall. The stock was up in after-hours last night but is currently down a buck in pre-market trading.
If you are a current subscriber, please check the Members Area for the rest of the trades. We will be back at 1:00pm with another market update…