1:25pm (EST)

The market is moving higher today and is being led by the Financial sector which is showing a 1.1% gain.  The “Four Horseman” of Wall Street’s most powerful financial executives are currently testifying on Capitol Hill about the financial shenanigans over the past few years.

LLoyd Blankfein of Goldman Sachs (GS, $168.96, up $1.14), Jamie Dimon of JPMorgan Chase (JPM, $44.14, up $0.65), Brian Moynihan of Bank of America (BAC, $16.69, up $0.33) and John Mack of Morgan Stanley (MS, $31.91, up $0.78) are all getting the fifth degree but it’s unlikely that anything new or substantive will come from the hearing.

The big story we are following today is Google (GOOG, $581.28, down $9.20) which has broke serious support after announcing plans to withdraw from China over censorship and cyber attacks.

The big fear is that Google’s strategic plans could be compromised as the company makes $500-$600 million in revenue from China.  Although the revenue accounts for less than 5% of its sales consider this.  China has more Internet users than America has people.  Ah, yeah. 

Given the size of China’s market and the potential for advertising sales this could be a big loss for Google.  The market potential is enormous which means more pie for Baidu (BIDU, $439.21, up $51.21).

The company controls more than 60% of China’s search engine market and that number will increase significantly if Google pulls out of the country.

We mentioned the Baidu January 400 calls (BPJAT, $37.40, up $35.80) would have a huge percentage gain after closing at $1.60 yesterday.  The return for turning $1,600 into $37,400?  2,238%.

Of course, if Google doesn’t make this announcement then the call options probably expire worthless but this is the danger and rewards of trading cheap “out-of-the-money” options.

The heart of earnings season will be upon us next week and although we can’t promise you a 2,200% return, we can tell you we are working hard to find a double or a triple over the next few weeks.  We normally target 100% return for our trades but we think the current volatility could bring even bigger gains then what we normally target. 

As we head to press, the Dow is enjoying a 58 point gain and is trading at 10,685.  We have updated the Members Area and we have an important note for our new subscribers and a reminder for those of you who have been with us awhile. 

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