12:10pm (EST)

The market has traded in a tight range today as we close the week and the bulls are on track to get the first victory of the year if we hold at current levels.  There was a lot of nervousness ahead of this morning’s jobs data but both the bulls and bears got a piece of the action so we aren’t too surprised to see a flat day.

We thought Bernanke would be more “upbeat” but he is a boring dude to watch, let’s admit it.  He has been known to drop the ball at times, especially when the bulls are on a roll, but he appeared calm today, not nervous, and said the economic recovery is moving forward, although, at a pace that is insufficient to reduce the rate of unemployment significantly.  He went on to say that he thought the economic recovery seems likely to be stronger in 2011 than it was in 2010.  

The Dow started the week at 11,577 and is currently down 44 points to 11,652.  We would love to see a close above our 11,700 target but it will be tight. 

The S&P was at 1,257 on Monday morning and is lower by 5 points to 1,268.  The index broke out of the 1,250-1,260 range from last week and we are looking for a close above 1,275.

The Nasdaq stood at 2,652 at the beginning of the week and is off by 11 points to 2,698.  We would like to see a close over 2,700.

As we head into next week, these levels will be key to watch for the market as the bulls plan their next leg up.  They managed to close above these levels on Wednesday so that was good sign but the bears might look to get back into the game.  We can’t see them doing much damage, yet, but we are going to use this opportunity to close half positions on some of our current trades.

The BEST part of closing a trade that is up 100% or more is that by closing half you make it a risk-free trade.  Sure, it sucks if you see the options continue to go higher but what if they don’t?  It is also possible to close out a trade that is up 100% and have it go on to make 200%.  And, sometimes they go on to only make 50% or the position might be closed for a loss.  We like being safe and some of the trades we got into over “Christmas Break” are up triple-digits.  While other “gurus” were taking a breather, we knew Santa still had a few presents left unclaimed.

Earnings season is upon us and as you all know by now, Alcoa (AA, $16.37, up $0.01) will be reporting on Monday and will “officially” get the party started.  The stock has already made a nice run heading into earnings as shares are up about 7% this week.  We won’t be playing options on Alcoa this time around but we are targeting one or two trades for next week.  In fact, we are releasing a new trade RIGHT NOW!

Our 2011 portfolio is off to an incredible start but we want to protect our profits and open some new positions.  We will be back Sunday night with the Weekly Wrap, which has been just as hot, and a look at next week’s earnings picture. 

Subscribers, check for the new trade and updates in the Members Area.  Have a great weekend everyone!