12:45pm (EST)
We have been super busy today but the last 48 hours are what makes option trading so lucrative.
As option traders, profits can come in a hurry and after putting our name on the line and calling for another leg higher in the market BEFORE the start of trading Monday, well, let’s just say it feels good to prove those Wall Street pros wrong, again.
We said over the weekend that last Tuesday’s 1% pullback flushed out the weak hands and the 5-week trading range we had been in was about to make a big move. The “selloff” merely stretched support and we have clearly shown all of this in our chart work over the past few weeks. The break above resistance this past Tuesday has been a goldmine for us although gold itself continues to take a pounding.
Speaking of which, we have never been big buyers of gold but it looks like investors would be safe with buying quarter positions at current levels. Gold is currently up $4 to $1,647 an ounce but could dip to $1,400-$1,450 if it gets ugly. This would be an overshoot of support but we are using the weakness to start quarter positions in silver. Silver is down to $32.33 an ounce but is up 15 cents today. In 2 years, silver will easily be above $40, possibly $50. If it silver goes lower from here, we will buy another quarter position so start small just in case.
As far the market, trading has been choppy but as we head into the second half session the bulls are adding to this week’s gains.
The Dow is up 41 points to 13,235 while the S&P is higher by 8 points to 1,402. The Nasdaq is showing a 17 point pop and is at 3,057.
Our subscribers have more profits to take as our Hard Stop for Pepsico (PEP, $64.08, up $0.02) has been triggered today. This call option trade has made us 50% in just over a week but today’s slight pullback in the morning knocked us out of the trade. We also now have a 400% winner on our hands with American Express (AXP, $56.64, up $0.49) so we are locking up another quarter position of profits.
We have so much more to cover inside our Members Area with our current trades so let’s go see where we things are at.
The profits this week have been enormous and we are giddy as we see a great opportunity over the next 3 months to make even juicier profits. We have been saying since last October that this would be one of the BEST times ever to trade the market and we continue to feel that way. In fact, 2012 could be one of our biggest year ever for profits!
Subscribers, check the Members Area for the latest updates and we will be back in the morning with a full report.
