Intel (INTC, $21.48, up $0.52) blew past Wall Street’s forecast after the bell yesterday and reported some impressive numbers.
The company said it earned a profit of $2.3 billion, or $0.40/ share versus $234 million, or $0.04, in the year earlier period. Revenue climbed nearly 30% to $10.6 billion as Intel posted its highest gross profit margins ever, at 65%. Amazing.
The market finished higher on Thursday as the Dow closed with a 30 point gain at 10,710. The S&P 500 added 3 points and settled at 1,148 while the Nasdaq edged up 9 to 2,310.
For those of you who have been following us since the summer, we set targets for the market back in August that are about to be hit. Last Sunday we had this to say:
“The Dow added 11 points on Friday and 190 for the week to close at 10,618. Our near-term target remains 10,800 and this could be the week we take it down.
The S&P 500 gained 3 points to close at 1,145 and for the week the index added 30. In August, we set our target at 1,175 so we are within spitting distance…
As far as the Nasdaq, we clearly saw the strength in Tech back in the summer and set a year-end 2009 target of 2,275 for the index. That level was taken out before Christmas. On Friday, the Nasdaq displayed its muscle once again and had the biggest percentage gain as it added 17 points to close at 2,317.
We remain bullish and our portfolio has consisted of mainly call options since March 2009. We have added put options as “insurance” along the way but we still feel like the market moves higher from here. Of course, once our targets are hit that could all change but the beauty of getting a pulse on the market is that it allows you to change accordingly.
If and when we reach those aforementioned targets, we either, continue higher, stay flat, or retreat to lower levels. The cards to figuring out the next six months on where the market could be headed are being dealt right now. A lot of investors and traders will be ready to pay the ”big blind” this week as 4Q corporate earnings start to come in. We will go over this more on Monday morning.” (END)
Folks, it is important to know where the market is headed because once it gets in a groove, trading becomes easier. If and when we reach Dow 10,800 and 1,175 for the S&P we honestly don’t know what happens next. However, our gut is telling us the market continues higher but we have to wait for the clues to confirm our thesis.
Nobody knows what the market will do from day-to-day but overall the information is out there. There are times when trading options can get choppy but they key is not to “over trade” your accounts.
We talk about this in our Welcome Guide which is at the top of the Members Area page. Obviously, everyone wants to score the big trade but this gig is like all others…you have to grind it out. And you can’t blow up a $2,000 account by buying 10 or 20 contracts with your first trade. Try limiting your portfolio to 3%-5% per trade. In other words, if you buy 10 contracts for each of our trades then you should have a $20,000 account. If you have $10,000 then trade 5 contracts.
Our trades target $500-$2,000 if you are doing 10 contracts as we profile options anywhere from 50 cents to $2.00. Obviously, if you are new to trading or you are starting small then go slow and paper trade with us for a while. And remember, any money you trade options with should be considered “aggressive” and this type of trading is not for everyone.
Options are the most lucrative way to grow a trading account and remember everyone’s results will be different based on your own expectations and risk levels. Also, you will have winning and losing streaks but the goal is to make a 100% return on each trade. This allows you the luxury of having 2 losing trades at 50% if all things are equal. They key is to hit the 400%, 800% and 2,000% trades which we have.
Our documented track records show we have over a 70% winning percentage for the past couple of years so keep this in mind if you join us for a month and start off with a negative trade. For 2010 our track record shows we have closed trades for gains of 13%, 90%, 119%, and 150%. We still have open trades and once we get a few more closed we will start posting the 2010 track record at the end of the month.
This week has been pretty volatile due to options expiration and today is not historically a good one for the Dow. The index has traded lower on 9 of the last 11 January option cycles with some major hits of 1%-2% lower.
As we head to press, Dow futures are down 25; S&P 500 futures are lower by 4; Nasdaq futures down 4.5.]]>