1:50pm (EST)

The market is reacting to this morning’s massive 8.9 earthquake in Japan and tsunami warnings with choppy action as we head into the weekend.  There are a lot of moving parts to the current market, more so than normal, which is why we said in our 9am update the next 30 days are going to explosive.

Futures were down 0.5% when we started our research this morning and the overseas markets opened lower.  It was a dramatic scene as we watched the tsunami hit the shores of Japan and we hope people manage to escape harm’s way.  Here at home, same deal as Hawaii and parts of the West Coast have been issued warnings.

Oil is lower by $2 to $100 and has helped stabilize the market which is in positive territory as we write this up.  Economic news was mixed as Retail Sales for February rose 1% which matched expectations.  The Consumer Sentiment Survey for March came in at 68.2 versus expectations for 76.5 while Business inventories for January increased 0.9% versus a forecast for 0.8%.

The Dow is back over 12,000 and is higher by 15 points to 12,001.  The index fell about 60 points at the open and yesterday’s close below 12K was the first since the end of January.  We are at the bottom of the trading range again but a close above 12,000 would be a positive for the bulls.

The S&P 500 traded down to 1,289 but is up 5 points to 1,300.  The Nasdaq is up 4 points to 2,705 after trading to a low of 2,689. 

We noted this morning how the bears cracked the 50-day moving averages (MA) for the Dow, S&P 500 and Nasdaq following Thursday’s sell-off and we have often said sometimes these MA’s can get stretched.  All signs are pointing towards further downside but trading ranges are tricky and can fool a lot of people, even us.

We’ve gone on record since October and predicted a bull run until April and we don’t know of many newsletters who stuck their neck out that far.  Since that time period, we have recommended 44-outta-51 winning trades, including 17-out-of-19 for 2011.  Although some of current trades are down, we have played longer-term options because we have expected a down to flat market, before another uptrend.

If you would like to learn how to find trades and read charts then we really encourage you to pick up a copy of our trading manual, How to Trade Options on Momentum Stocks.  Here is an email we got from one of our subscribers yesterday who did well on a Green Mountain Coffee Roasters (GMCR, $59.24, down $2.47) trade by using our research and reading the manual: 

“I want to share my great results on GMCR.   Based on your comments on February 15th, I bought 20 options at $0.28.   They closed today at $7.00, which is a 2,300% gain.  My $560 dollars turned into $14,000 in less than a month.   In decades of trading, this is my single best trade ever.  Thank you!  By the way, the Dow was down 228 points today and I could care less.  What a great trade.  It proves the amazing power of options.

I am so grateful for your service, which calls it straight all the time, your trading manual, and most of all, your amazing skill at finding winning trades.

I have attached a copy of the trade from my brokerage screen.  – Paul (END)”

Folks, we love these types of emails because it lets us know that our subscribers are learning options and spotting potential trades.

We have been running a deal where you get the options trading manual at no charge if you sign up for a 1-year membership to our Weekly Wrap or Daily publication.  We think March and April are going to be loaded with opportunities to trade this market and we want you on board.  We will be releasing new trades as early as next week and we have many more on our Watch List that should do well on a market breakout or breakdown.  We don’t advertise this deal so take advantage of it before the price goes up and there are no more special offers.  Shipping is also included.

We will be back Sunday night with the Weekly Wrap.  Until then, have a great weekend.