Market Pushes Higher

1:00pm (EST)

The bulls are back in the driver’s seat despite any real catalysts to carry them forward. There are still some notable earnings releases due out this week and the economic news will pick up on Thursday and Friday but momentum can’t be denied.

As of now, the Dow is currently enjoying a 45 point gain and is at 10,597. The S&P is up 5 points to 1,143 but the Nasdaq keeps pushing the envelope. The index is showing an 18 point pop and is 2,350.

Our little quote this morning on bull markets was meant as a reminder that we haven’t seen the euphoria yet. There is still plenty of pessimism on Wall Street but we have been in the bulls camp over the past few weeks and have made some nice trades. We still have some headwinds the market is facing but the trend is still up.

With so much going on, we wanted to give a quick update on the CBOE Volatility Index (VIX, 17.76, down 0.03). For our new subscribers, if the VIX is at 30 or more then it means the market is nervous. If the VIX is under 20, the market is confident.

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Back in mid-January when the market was at its highs the VIX was at 17. A month later, the index was back near 30 as the market traded back down to the lower end of this current trading range we have been in. The 52-week low is 16.86 and the VIX will drop if the market continues to rally.

It doesn’t mean any rally will stop if the VIX hits these levels, and in fact, we are looking for the VIX to trade below 15 if we can get a market breakout.

And finally, many of you know our thirst for the BioTech and the Drug sector as these can be some of the most explosive option trades on the planet.

This Friday, there is a big FDA announcement that is expected concerning the first ever “once-a-week” diabetes drug Byetta. There will be several stocks that could move on the news but the one we are watching is Alkermes (ALKS, $13.15, up $0.70).

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We aren’t sure if there is an option trade here, either a call or a put, but we are watching the developments. Our portfolio is already at its limit but we always keep trades on our Watch Lists. Current subscribers, check for the Members Area for the updates.

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