Man, we love that song made popular by Europe back in the day…
It’s the last trading day of 2009 and we are going to give you some meat and potatoes this morning for breakfast. Meaning…we are going to cover a lot of things as we are looking forward to 2010…big time. Either the bulls or bears will be bringing out the heavy artillery when 4Q earnings roll in next month and we could be setting up for a classic battle.
The bulls are doing all they can do blow the roof off of this market and as we head into January it will be interesting to see how things play out. The Dow managed a small gain yesterday of 3 points to finish at 10,548 while the S&P 500 added less than a point to close at 1,126. The Nasdaq settled at 2,291, also up 3 points on Wednesday.
Since this is the last day of the trading year we wanted to take a look at our targets that we set for the market back in August. Of course, no one knows what the market will do from day-to-day, let alone 4 months from now but we were seeing things in August that lead us to believe this current bull market rally had legs back then.
Our targets were 10,800 for the Dow; 1,175 for the S&P 500 and 2,275 for the Nasdaq. As you can see, we came up a little short on the Dow and S&P 500 targets but we were right on with the Nasdaq.
This leads us to believe the market still has room to run but January will be a pivotal month as earnings pour in. We also have quite a few geopolitical events we need to monitor and pay attention to but overall the economy seems to be improving.
One stock that has been on fire this week…OSI Systems (OSIS, $27.46, up $2.40) as investors rushed into the stock starting on Monday. The company makes these “body scanners” that could be used in airports that would allow tighter, faster security and the machines are selling for $150,000 a pop. Needless to say, the market is enormous and some people think they should be in every airport in every city RIGHT NOW.
The shares have rallied following last weekend’s failed terrorism attack and last Thursday they closed at $22. On Monday morning they opened at $23.04 and hit a high of $24.97. Usually these types of trades fade but we under estimated this story and it cost us a sweet call option trade.
Yesterday, the OSIS January 25 calls (UOJAE, $2.95) easily doubled and were under $1 on Monday. OSIS and others have been put on our short-term Watch List.
Of course, we have our own triple-digit winners in our current portfolio that have eased the pain of missing a monster trade. We currently have 6 active trades showing in the Members Area and the returns are: 90%, +29%, -45%, +81%, +172 while one is even. The 29% trade that we profiled two weeks ago was down 45% a week later and is now. The point is, new subscribers who joined us last week are showing a 100% return as we updated our comments daily and reiterated our price target.
Now, for things happening with us:
There are also big changes coming to the options market and the way they will look as far as symbols. This has been the MAIN reason for the delay of our trading manual that was going to be released earlier this month. We decided that it made no sense to print copies with the radical changes we are facing and we are reworking the material.
The change could come as early February and will affect all options across the board. The event is called the Options Symbology Initiative and it really isn’t a big deal. We explain this in the manual but all option tickers will become 21 characters long.
The Options Clearing Corporation is trying to make things simpler and the symbols will look more complex, but they’re really easy once you get the hang of reading them.
The reason we are bringing this all up is because we don’t want to lose anyone of you as a subscriber. We have told you that we will limit or subscription base to 1,000 memberships and we are halfway there in only four months, folks. Once we are full…we are full.
We know we will have cancellations from time-to-time and that is when new subscribers will join us but please remember this. If someone joined us in November and only had a one month membership then obviously they may have cancelled as we hit a mini losing streak. This would be natural but we want all of you to see the big picture as we head into 2010.
We profiled 244 trades this year and we had 63 losers. In November, we had 6 losing trades but 4 of them were stopped out on Black Friday when the Dubai news broke. Folks, these events happen which is why we closed a half position on a trade that is up 172% YESTERDAY. We did this because of the current geopolitical events and to lock in profits and make it a risk-free trade.
The key to option trading is to keep your trades around the same number of contracts and monitory sizes so that you don’t get too high or too low when trading. You also have to realize that you will have winning and losing streaks and you will have to control your emotions. Yeah its tough taking losses but remember what we have been telling you.
If you have 1 trade that returns you 300%, you can have 6 losing trades that average a 50% loss and still be even. We don’t fault people who leave us but again, we want you to see the big picture as we head into 2010.
Also remember, a subscription to our Members Area is a tax write-off. We would love to have everyone sign up for a year of course (hint, hint) and we aren’t saying this to up sell our services.
We have done little advertising folks and word is spreading about our success. We believe in customer loyalty and we want everyone who signed up in 2009 to have the first opportunity to get the trading manual and to stay on our list. The best way is to lock in longer memberships.
Hopefully we have covered everything this morning and we know we threw the kitchen sink at you. However, we enjoy what we do and we look forward to providing you even more excellent opportunities as we more forward.
Also, we may or may not do a 1pm update today as the market is closing early. We are working on a big article for the weekend Weekly Wrap and we want to enjoy New Year’s Day as we will be working all weekend to find some good trades.
We will be updating the 2009 track record to show our final results this weekend so be sure to check back with us for this and the Weekly Wrap.
As we head to press, Dow futures are higher by 10 while the S&P 500 and Nasdaq futures are up 2.
Current subscribers, check the Members Area for the trade updates.]]>