12:40pm (EST)

It been a busy week and a lot of interesting developments are happening in the market right now.  The bulls came into the week looking to extend September and October’s gains but got a wakeup call on Tuesday when the Dow fell below 11,000.  However, the bounce from Tuesday has been impressive and the bulls are on track for another weekly gain.

The bears may be out of ammo and could have used their last bullets on Tuesday as the bulls appear poised to break through the April highs.  We have been all over the current market’s move like grass on dirt and we mentioned this morning if we get a break above resistance the bulls could blow the roof off the house.

So, what catalysts are the bulls banking on to help them break on through to the other side?

Besides earnings, two important dates to circle on your calendar will be November 2 and 3.  This is when we get the mid-term U.S. elections and the Fed will meet to talk about QE2 or when or how much they will actually start to flood the world with dollars. 

The Republicans will be looking to take control of the house while Wall Street wants a another massive quantitative easing program that will continue to weaken the dollar and drive the market up; anything less than $100 billion from the Fed will be a disappointment and could be the one thing that derails the current rally.

We are also expecting a HUGE announcement concerning one Biotech stock whose fate lies in the hands of the FDA.  It is a $4 stock and we see shares going past $10 if its diabetes drug is approved or, if not, a 50% haircut and a drop below $2.  This news is due out by next Friday and it still not too late to get into this trade.  We urge you to take a look at it.  

As you can see, the next few weeks will likely shape the trading landscape for the rest of 2010 and we should have an even clearer trend.  Of course, the current trend has been up but if we get a blow-off rally after breaking resistance then there will be plenty of opportunities for triple-digits returns.

We have used the “trend is your friend” thesis this month to book some solid gains this week after a rocky September.  We were betting for one last test of the lows but the market surged after its August swoon which is also when we started to deploy our option straddle and strangle trades.


We talked about Amylin Pharmaceuticals (AMLN, $11.33, down $0.15) fall from $20 to $10 earlier this week and we did a video on how you could have used the information from our Watch List AND our option trading manual, How to Trade Option on Momentum Stocks, to make gains of 400%-700% if you would have deployed a strangle option trade on Amylin.  The course also contains another book, Momentum Stocks Watch List, which covers dozens of sectors and over 600 stocks. 


The video will be released this weekend and will be the third video that will be covering the manual.  Folks, we are giving you the blueprint to find some spectacular trades over the next few weeks and we will be doing another video on how to play the indexes for option trades.

If we get into November with the market breaking out to new highs, or a correction is about to take place, then you will know exactly how to play the volatility.  Remember, we are also offering a free 1-month subscription to our exclusive Members Area with any course purchase by the end of October which means you only have 8 more days to hit us up on this offer (a $129 value).  

We wanted to go over all of this because we truly believe we are going to see some incredible opportunities to make more triple-digit returns over the next month or two.

As we head to press, the Dow is down 31 points to 11,115 while the S&P is flat at 1,180.  The Nasdaq is up by 11 points to 2,471.

We have a couple of trade updates to talk about before we head out to enjoy the weekend but we will be here Monday morning with a full update and a possible NEW TRADE.  We have closed one trade this week for a 135% return and we are putting in a stop to protect another one after closing half of it for a 100% return. 

This means we have some room to add one or two new ideas which is perfect for the action that will be going down over the next few weeks.  Subscribers, check for the updates and enjoy your weekend.