The bulls were anticipating some good news today ahead of Ben Bernanke’s big speech this morning as futures were showing a strong open. The market opened with a nice pop but the immediate reaction was disappointment as Bernanke started off by saying the Fed was ready to provide additional measures to stimulate the economy but not yet.
The indexes began to pull back and had lost all of their gains before the talking heads and Wall Street started to spin his comments after going through his remarks. Despite offering no clues and no action, the thinking is that Big Ben tipped his hand and that the Fed could still act sooner rather than later. The next FOMC meeting is on September 12 which is when the “real” announcement could come.
We have been mentioning that Bernanke wants to wait to see what Europe does and by kicking the can down the road, he now has that. With the ECB meeting next week, he believes Europe will announce its money-printing program and then we can announce ours the following week.
This may or may not be the way things will unfold but the theory is good enough for the bulls as they have resumed their rally.
The Dow is up 50 points to 13,050 while the S&P is higher by 3 points to 1,402. The Nasdaq is showing an 8 point pop and is at 3,056.
We have put together another sweet week as we were able to close three more winning trades for our 2012 Portfolio and half of another. Our subscribers made a monster 193% return on WellPoint (WLP, $59.55, down $0.55) using call options and 35% on Amgen (AMGN, $83.65, up $0.50) call options. We are also closing one more trade ahead of the weekend that is up 60%.
This gets our overall 2012 Track Record (Closed Trades) to 121-36 which equates to nearly an 80% win rate for all of our trades. Despite a rocky June, we have been able to put together a nice string a trades as we closed out 11 winners in August and are 13 for our last 14. We expect to stay hot and with our portfolio light, next week could be the start for our next batch of possible triple-digit winners.
The action from today appears to be bullish heading into next week which gets underway on Tuesday. The market will be closed for Labor Day on Monday. We have been looking for possible new trades all morning but we have decided to wait until next week before taking any action. The 3-day weekend will zap some of the time premium built into the September options and they will expire in less than 3 weeks when we get back.
We will rework our Watch List over the weekend to reflect some October options as we prepare to play the market’s next major move. With our portfolio light, we are perfectly positioned to play the next trend.
We have some last minute updates before we roll out, including a Profit Alert, so let’s go check on our trades inside the Members Area
We will be back Monday night with the Weekly Wrap and Tuesday morning with the Daily. Until then, have a great weekend everyone.