The market has traded lower for much of today’s session with the bears picking up where they left off from last week. The bulls have tried to take the major averages higher and have had some success but the momentum is still in the bears favor.
We don’t have to tell you who (Greece) is weighing on Wall Street which has offset good news here at home. In economic news, the ISM manufacturing report had a reading of 51.6 versus expectations for a print of 50.5. The ISM prices paid reading was 56.0 versus a forecast for 54.8. We said this morning the ISM number needed to be over 50 which has kept the market from falling apart.
Elsewhere, Construction Spending rose 1.4% in August versus expectations for a decrease of 0.2%.
When we were doing our weekend homework, all of our research showed continued weakness in the market but the answer we were looking for is when is a bottom going to be put in for the major indexes? Of course, we have been playing the downside of the current market trend since early last week so we want to see a continued slide. However, at some point, some of the stocks we follow are going to be a screaming buy which will help us down the road. Right now, we are using put options to bank winning trades.
Often times when the market is tanking, individual investors get out of the market because they don’t know how to short stocks or use put options to make money. Don’t be one of them. We have been telling you this is the perfect time to be trading and we have been hot lately. Even better, stocks are getting cheap enough to where we can start using longer-term call options.
We have given a date on when we should bottom by, and if we do, then there will be an incredible amount of money to be made over the next 3 months. If you have been on the sidelines because you are afraid or don’t know what to do, then get back on the bus and start playing this market.
As far as the indexes, the Dow is down 79 points to 10,834 and has come close to hitting our first downside target of 10,800. The S&P is lower by 10 points to 1,121 and is right at our 1,120 target. The Nasdaq is off by 25 points and is at 2,389. We said to look for a drop below 2,400 so this level will be important for the bulls to hold. If not, it’s going to get ugly.
We have another NEW TRADE today and we have raised the stops on some of our current trades which are showing nice pops today. We are close to bagging triple-digit gains on a few trades so let’s go see where we are at. Subscribers, check the Members Area for the updates.