Although it was a brief holiday, we managed to take a day or two off to check in on the Casino industry over the weekend. The playgrounds in AC were slow until New Year’s because of the snow but the craps tables were full over the weekend and let’s just say we heard our fair share of “7 come 11”.
In craps, there is a “come” line and a “pass” line. To make a long story short, you make a “come” bet after the point has been established on the “pass” line. The first roll on the “come” bet is “come point” and this is where the dice thrower wants to roll a 7 or 11 as it is an automatic winner. (At least this was how it was explained to us.) Of course, we didn’t gamble (sly grin) but that is exactly what we were wishing for come Monday morning.
It must have been an omen because wouldn’t you know it? The Dow traded to a high of 11,711 on Monday.
The bulls got a nice jump on 2011 after getting more good news about the economy. The Institute of Supply Management’s (ISM) index of manufacturing activity came in higher for the 17th straight month in December while Construction Spending also came in better-than-expected.
Earnings were light, and will be all week, but volume was strong. Speaking of earnings, Alcoa (AA, $15.80, $0.41) and JPMorgan Chase (JPM, $43.58, $1.16), both members of the Dow, jumped over 2% ahead of their earnings reports next week. Alcoa reports next Monday and will be the “pace car” while JP will announce the following Friday as earnings season gets underway.
Against this backdrop, it was easy to see why the bulls had a banner day.
The Dow gained 93 points, or 0.8%, to settle at 11,670. Our “zone” has been 11,600-11,700 and the index blew past both before settling between the two. The Dow closed above 11,600 for the first time since September 2008 as Bank of America (BAC, $14.19, up $0.85) led the blue-chip charge. Shares soared over 6% and past strong resistance which was at $14. Next stop: Dow 12,000.
The S&P 500 surged 14 points, or 1.1%, and closed at 1,271. The index traded to a high of 1,276, which was a point above our 1,275 target, and closed at its highest levels since September 2008. The bulls will now target 1,300 over the next few weeks.
The Nasdaq was the best-performer as it rallied 39 points, or 1.5%, to close at 2,691. The index traded to a high of 2,704 and cleared our target of 2,700 which means Tech could make a push towards 3,000. Monday’s close is the highest level for the index since December 2007.
Although the major indexes closed slightly below our targets, it was nice to see that those levels were broken on the first day of the year. We would love to see a close above them today, or this week, and futures are pointing towards a higher open so we shall see.
Here are the numbers: Dow futures (+32); S&P 500 futures (+3); Nasdaq 100 futures (+6).
Despite the fact that we didn’t step up to the craps table to enjoy some glorified air, Dow “Seven come Eleven” was good news for our current portfolio and our subscribers continue to enjoy our hot roll on options. Yesterday was an incredible day as many of our trades made strong gains. Check for the updates…]]>