12:25pm (EST)

The bulls are looking for redemption following last week’s drubbing and are on track to recover nearly all of the losses if the current action holds up.  Futures were pointing towards an opening loss of up to 0.5% but after a test lower the market has powered higher as we enter the second half of trading.

The bears tried to extend the momentum from yesterday’s late session comeback on more pain in Spain as their banks try to get a rescue plan which might or might not be reached over the weekend.  

Economic news didn’t have much impact on the market as the Trade Balance matched expectations while Wholesale Inventories increased 0.6%, versus expectations for a pop of 0.4%.  

Today’s action is a little choppy as traders decide on what positions they are taking over the weekend but we have already made up our mind.  We are staying short.

Despite the pullback, rally, choppy action this week, we were able to close 2 more winning trades (+29% and +14%) and we took partial profits in another option trade that is currently up 255%.  We have now closed 20-straight winning trades since late April and 36-out-of-37 since late March.

June options expire next Friday and we mentioned in our Weekly Wrap that the next few weeks would likely result in a major breakout or breakdown for the market.  The first 6 trading days of the month have seen the bears push support and the bulls test resistance.  The volatility has produced a mini volatile trading range but it is only the beginning of possible larger move into the summer that could go either way.

We have a lot to talk about this weekend and we are still holding back on the playbook a little until we get a clear trend.  We normally like to trade up to 15-20 positions at once but we are currently at half that which means we have plenty of room to play the next major move. 

Our Track record for 2012 is now at 98-20 which means we are at a 83% win rate for all of our trades.  We refuse to rest on our success though as we continue to see the current environment as a great opportunity to trade options. 

When the market is giving us gifts like this, it is important to squeeze as many trades for profits as you can because you never know when the market will throw you a curveball.

The bulls have been impressive after going down on Monday’s open with 3 fingers up.  The major indexes were thisclose to drowning and breaking support before they were tossed a possible QE3 lifejacket.   

We still have the second half of trading to go and unless the bulls break down like a rented mule, they should get the weekly win.

The Dow is currently up 20 points to 12,482 while the S&P 500 is higher by a point to 1,316.  The Nasdaq is showing a gain of 8 points to 2,839.

We have a few updates to cover on our current trades before we roll and we will be back Sunday night with the Weekly Wrap.  Until then, have a great weekend everyone!