9:05am (EST)
Good stuff to talk about this morning…
Ben Bernanke had one of his better outings on Thursday as he encouraged the bulls to push higher which helped the market bounce off its lows. We had an iffy open as the bears tried to capture the hill and take back the Dow 12,000 and S&P 1,300 flags they recently gave up. They had a grip on both, but after a bloody battle, the bulls were still king of the mountain.
The Dow added 20 points, or 0.2%, and closed at 12,062 to extend its winning streak to four straight sessions. The index traded to a low of 11,981 shortly after the opening bell but managed to hit a high of 12,080 intraday. Although the index dipped below 12,000, the final hour recovery was impressive and showed strength. The Dow started the week at 11,823 and is up 2% going into today. Our short-term target for the blue-chips is 12,300-12,350.
The S&P 500 gained 3 points, or 0.2%, and settled at 1,307. The index fell to a low of 1,294 but managed a close above 1,300 which was what we were looking to see. The S&P was at 1,276 before Monday’s open and is also up 2%. We are still expecting a run up to 1,325, possibly 1,350.
The Nasdaq chipped in with a 4 point pop and finished at 2,753 on Thursday. The index reached a low of 2,725 and we said to look for 2,700 to hold. Tech traded to a high of 2,757 and we are expecting 2,825 over the near-term.
If we had a crystal ball, the market would look something like this for February…
The only thing that worries us about the current rally is February options expiration week which is week after next. So, our best guess is we reach our short-term targets for the indexes and then we have another “shakeout” week. From there, if support levels hold, then the bulls will resume their rally into March and possibly April. We said yesterday that the bulls are still giving clues we push higher so let’s keep on rolling with it. However, we are still checking our blind spots because sometimes things can sneak up on you. (END)
One stock we want to talk about this morning is JDS Uniphase (JDSU, $17.93, up $0.01) which was up 18% in after-hours last night after smashing Wall Street’s estimates. The gains have held as shares are at $22 this morning. We fell in LOVE with this stock before Thanksgiving when shares were at $12. If you look on our 2010 track record, you will notice we entered the March 12 calls (JDSU110319C00012000, $6.00, flat) at $1.25 but we were out by Christmas as our subscribers banked 112%.
We closed half of the trade in mid-December when shares popped over $14 and from there they languished for 2 weeks and were flat. The stock tested the $14.65 level several times afterwards and was having trouble breaking this key resistance level which is when we closed the other half.
We should have gone back in January and added the calls again because there was a breakout and they are probably going to be at $9-$10 this morning. Wow.
This is why option trading can be so lucrative folks. So when you here 700% returns are possible when trading options, it’s the truth. Of course, you can request our 3-year track record to see for yourself some of the monster gains we have had over the years. The key is stocking with us for the long-haul which is why we have our slogan, “What are you doing TODAY to become a millionaire TOMORROW?
The unemployment rate for January came in at 9% and the market loves it. However, futures are only slightly higher as the report said only 36,000 new jobs were created. The report is still being digested but the fact that futures are positive was what we were looking for.
Hopefully, the bulls can end with a bang this week. Subscribers, check the Members Area for the latest trade updates.
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