1:05pm (EST) 

Moody’s and Fitch just can’t get enough of the downgrades.

Futures were up throughout the night before the European markets opened but turned lower after Moody’s (MCO, $30.97, down $0.57) downgraded the debt and deposit ratings of 12 U.K. financial institutions.  It didn’t take Fitch too long to follow suit as they downgraded the debt of both Italy and Spain just before lunch.

The bulls have taken it in stride as the market has held up well.  We expected a little weakness ahead of the weekend but if we don’t get a selloff and support holds, then the trend would be higher going into next week.

The Dow is down 26 points to 11,096 while the S&P is off by 9 points to 1,155.  The Nasdaq is lower by 32 points to 2,475.

Next week is the start of 3Q earnings season for Wall Street which officially kicks-off with Alcoa (AA, $9.75, down $0.13).  We don’t get too excited with this name and we wish there were a more marquee player that held the title that marked the start of the fireworks but there always seems to be a good option trade on Alcoa BEFORE they report.  This week was another classis example. 

Shares are in the single-digits, yes they are under $10, and started the week at $9.57 after falling below double-digits by the end of September.  On Tuesday, shares touched a low of $8.45 which was a great entry price, but we just don’t like trading Alcoa.  The 52-week high is $18-and change but a disappointing quarter could push the stock below the price of a good 6-pack. 

Instead, we will be focusing our efforts on the earnings due out later in the week.  Pepsico (PEP, $60.77, up $0.20) will report on Wednesday while Fastenal (FAST, $33.67, down $0.44), Google (GOOG, $514.16, down $0.55), and JPMorgan Chase (JPM, $31.05, down $0.33) headline next Thursday’s rodeo.

We will be covering a few trades and the upcoming earnings season with a video for Sunday night.  For those of you who have ordered our option trading course, How to Trade Options on Momentum Stocks, we will also go over where the market could be headed over the next month or two. 

We wanted to wait an extra week to do the video just before the start of earnings season because we wanted to show you how we find our trades.  The videos have been a big hit with our subscribers which have helped them to become students of the market.

You will NOT want to miss this video.  For more information on what our trading course has to offer, please click here.

Some of the options trades we will look at and talk about are Google, which could make a huge move.  Last time the company reported their numbers the stock surged $70 from $529 to nearly $600.  Will history repeat itself or will shares plummet $50 on an earnings miss or lowered guidance? Oh yeah, Google also trades WEEKLY options so there could be the potential for some explosive profits with the right call – or put option.

And what about JPMorgan?  Shares have fallen from a 52-week high of $48 to a recent 52-week low of $27.85.  It’s hard to trust the Financial stocks but shares look like a deal down here at $30.  There could be a LEAP trade here worth looking at.

If you want to learn how option trading works and how to calculate where a stock needs to be for you to make money, breakeven, or where you could start losing money then look no further.  We take you step-by-step on possible trade setups and show you how to find possible triple-digit trades.

It’s been a great week for our subscribers as we were able to close out 7 winning trades this week for some fat profits.  Our subscribers booked +164% on FDX put options, +184% on GS put options, +74% on OXY put options and 50% and 38% on 2 BRCM call option trades.     

If you want to learn our strategies and setups, remember, our trading course is available at no charge (an $895 value including all videos!) if you order a 1-year subscription to our Daily newsletter.  If you are serious about learning how to trade options and want a mentor for a year then here is your calling.

Before we roll, we have updated our current trades one last time and we will have a new Watch List to start with on Monday.  We will also show you some of these trade setups in the video.

We will be back Sunday night with the Weekly Wrap (and video) so until then, have a great weekend!