1:05pm (EST)

The market is testing the lows we got this morning after trying to battle back from a nasty open.  The Dow started with a 72 point loss and fell to a low of 10,591, then recovered most of the losses but is currently down 65 to 11,598.

The S&P 500 is off by 12 points to 1,134 while the Nasdaq is taking one for the team.  The index is down 33, or -1.4%, and is trading at 2,279 as we head to press.

There are pockets of strength and one sector that continues higher is the Casino stocks.  MGM Mirage (MGM, $11.76, up $0.86) is up 8% after getting an upgrade this morning.  Goldman Sachs (GS, $167.43, down $4.13) came out and upped the shares to “Buy” from “Neutral” and slapped a $16 price target on the stock.  Sorry, Goldman, you are a little late to the party.

Our Atlantic City trip was a win-win as we went behind the scenes to see what was up during the holidays.  We didn’t come away with the feeling that the industry has turned around overnight but we took notice in the action the casinos were getting.

It was good to get away and when we got back, we profiled a trade in Las Vegas Sands (LVS, $18.50, up $0.13) that has paid off in spades.  Last Tuesday, our subscribers placed their bets on some call options and they have nearly doubled their money a week later.  

Las Vegas Sands was under $17 when we told our subscribers “LVS has been a solid past performer in our portfolio and has a shot at $20 if the casino stocks can rally over the next month or so.”

Folks, here is the power of options if you pick the right ones.  As you can see, the stock has made a $2 move in a week which is 12% from $17 to $19.  If you would have bought 100 shares of the stock it would have cost you $1,700.  Today you would have a $200 profit.  Not bad.

Now, take a look at what options can do for you.  That $1,700 would have bought you 17 call option contracts that were trading for around a $1 last Tuesday.  Today, those same call options are standing at $1.85.

If you do the math, 17 x 1.85 gets us 31.45 which means your $1,700 is now worth $3,145 or 95%.  Hmmm.  An 8% return with the stock or a 95% return by playing options.

We have updated this position in the Members Area…

Another stock we had recent success with is Amazon.com (AMZN, $128.03, down $2.28).  We recently profiled a trade that returned our subscribers over 50% but shares are getting hit again today after touching a high of $142 before the end of 2009.  We caught some of that action on the way up and recommending closing the trade after looking at the charts.  Since then the stock has been torched but has come back down to serious support levels.  We are doing the legwork now to see if there is another trade in Amazon…

Also getting our attention is A123 Systems (AONE, $20.75, up $0.05) which has made a huge bounce of its support areas.  The stock recently made a run from $14 to $23 in a little over a month and we got some of that action as well.  Our subscribers made nearly a 120% return as we had a target of $23-$24 and got out at the top.

See, it does pay to do your homework folks but that is why you have us.  We are still on the fence with A123 but we wouldn’t be surprised to see a quick run back to $23.

That is all we got for today and for those of you who care…Kid Rock at the Borgata in Atlantic City on Valentine’s Day and Jay-Z in March.  Be there or be square!  The Members Area is updated…