1:10pm (EST)
Before we talk about the market we wanted to remind everyone to go out today or tomorrow and spend five bucks on lottery tickets. Get 5 buddies and spend $25 together and get 25 tickets. The Mega Millions has an estimated jackpot of $540 million and is available to play in 42 states. The cash option, minus Obama’s payout, is around $390 million. If you trade options then you can risk a buck for $540 million. The drawing is at 11pm (EST) Friday night and could hit $600+ million. For those of you who have $176 million, you could buy all of the winning combinations but it would be hard to get all of them processed.
As far as jackpots, we feel pretty good as we collected a nice pot of money after cashing out our American Express (AXP) call option trade. It was a beast of a trade, returning 475%…
We have warned that this week could turn bearish for the market and today’s dip now has the bears in the driver’s seat. The last day of March, which is tomorrow, is normally mixed, according to our history books and today’s action could be a warning sign. The bulls will be trying to hold support into the close so let’s see where we are at.
The Dow is down 53 points to 13,072 while the S&P 500 is off by 11 points to 1,394. The Nasdaq is showing a decline of 25 points to 3,079. We have covered major support and resistance levels for weeks so we will have to see how things shake out. We still wouldn’t count the bulls out but the air is chilly and a trend change could be coming.
April is normally one of the best months, historically, for the bulls who are hoping to make it out of March holding support.
Oh, before we go, we wanted to mention Best Buy (BBY, $24.30, down $2.32) which is tanking 10%. We profiled the April 24 puts (BBY120421P00024000, $0.65, up $0.25) yesterday which were at 45 cents in our afternoon update but we sat on the sidelines.
We wanted to profile a negative trade or put option because a lot of traders or new investors do not understand how to short the market or a stock. People pull money out of the market when they see stocks going down but like we always say – you can make just as money in a down market as you can in an up market.
If you got into the Best Buy put trade, lock-in half profits for a 50% gain and set a stop at 40 cents on the other half. If shares continue to sink you will still enjoy further gains but if they rebound you will have protected profits.
We have a ton more to talk about including our thoughts for our 2 new trades today so we have to cut it short. Subscribers, check the Members Area for the updates as we also have another winner to close out. It’s not a triple-digit winner but it’s a double-digit winner.
We will be back Friday morning with our next update but get the popcorn ready at 8:30am (EST) which is when very important economic news will hit the street.
