1:00pm (EST)

The bulls are taking the bears best blows but they ain’t backing down.  We have so much to talk about and there are so many moving parts right now that we don’t know where to begin.

First, the market.

The Dow is down 7 points to 10,560 while the S&P 500 is off by 2 and is trading at 1,143.  The Nasdaq, which continues to be our hero, is slightly lower by 3 points at 2,355.

Our short-term hurdles are Dow 10,800 and the S&P 500 needs to bust through 1,150.  Next week is option expiration and if we stay below these levels the action will be intense as both sides battle over strike prices.

We are still in the bulls camp and anything can happen which is what makes option trading so great.  We have been aggressive this week and our trading instincts tell us we are going higher.  We also realize that we are facing serious headwinds but nervous money doesn’t make money.

 We are seeing the IPO market show signs of life again.

Sensata Technologies (ST, $18.85, flat), a leading global supplier of sensors and controls went public today.  The market capitalization for the company is a little over $3 billion, which makes it the largest U.S. company to go public in 2010 to date.  There are no listed options on the stock, yet, but we will do some more research to see if there is a trade here when the options do list.

Another story we want to talk about is Imax (IMAX, $16.65, up $0.63) which reported earnings this morning.  All we can say is the company is in a groove.


Shares have hit another 52-week high of $17.60 after reporting a profit of $4 million, or $0.06 a share versus a year-earlier net loss of $9 million, or $0.21 a share.  Revenue rose nearly 100% to a record $54 million.

The boys on the Street were looking for earnings of $0.07 a share on revenue of $45 million.  We had a few emails trickle in today as some of our subscribers choose to keep their March call options open. 

We profiled a trade on Imax at the beginning of February that we felt really good about but the market was still finding its way and we were a little early.

If you look at our current 2010 portfolio, you will see we were stopped out for a 50% loss which is one of our trading rules for higher priced options, but man, have they rebounded.

The March 12.50 calls (IMQ100320C00012500, $4.00, up $0.50) were profiled at $1.05 and are showing a 220% return from those levels.

Our target for Imax has been $20 since early October and we told you the momentum was there.  Unfortunately, we were just a little early in our portfolio but we are glad it worked out for some of you. 

Of course, we have a few trades in our Members Area that we think can replicate those returns.  One of our trades that we released Monday just hit a triple-digit return yesterday and we think there may be a little more left in the tank.  We also entered two more trades today and we are looking at another as “protection” as we head into Friday and next week.

The action could get intense as the March options expire.  Current subscribers, check for the updates.