9:00am (EST)

“The market has moved 4% for the month of September and we will need another 2%-3% over the next 2 weeks to reach our fluff targets of Dow 14,000; S&P 1,500; Nasdaq 3,250; and 900 for Russell 2000.

Monday’s have been dominated by the bears over the past 3 months and a win by the bulls would be a good sign to start the week.  The Dow will get a new component on Monday as Kraft Foods (KFT, $39.93, down $0.20) is out and Unitedhealth Group (UNH, $54.25, up $0.36) is in.  This could help the index as traders prop up the stock.

Kraft will be splitting into two companies.  Kraft Foods which will focus growing the grocery business and will trade on the Nasdaq under the ticker symbol “KFRT” starting next Monday.  The parent company will be called Mondelez International and will also trade on the Nasdaq under the ticker symbol “MDLZ”. 

FedEx (FDX, $90.15, down $0.21) will report earnings on Tuesday and they warned Wall Street a few weeks ago they were going to miss estimates.  This could be bullish for the stock as they have lowered expectations already.  The Dow Transports have been in rally mode and we told you this was a key index to watch coming into September to confirm the Dow and blue-chips had legs. 

 

Here is how the Transports look after Friday’s close:

 The rest of the week is filled with a few high-profile earnings from companies with different fiscal year endings, but official 3Q earnings season won’t start until the second week of October. 

Between now and the beginning of October, companies usually warn and with FedEx and Intel (INTC, $23.37, up $0.02) giving Wall Street a heads-up, others will follow.  AK Steel Holding (AKS, $5.87, down $0.57) tried to sneak theirs in on Friday after saying they expect higher losses for the quarter.  That didn’t work as shares tanked 9%.    

Economic news will be dominated by Housing numbers and they should come in better-than-expected although it’s not a given.  The big report should be the Philly Fed on Thursday.

This week is option expiration week for the September chains and it can be bullish, especially on Fridays.  The Dow has been up on the past seven September Triple Witching Friday’s and 8-out-of-9.  Triple Witching (TW) is when all option and index futures expire and it happens 4 times a year – March, June, September and December.  The talking heads will throw caution at the event but again, it is usually a bullish day for September TW. 

Apple (AAPL, $691.28, up $8.30) certainly helped the bulls by surging to new all-time highs.  Shares reached a peak of $696.98 on Friday and here were our thoughts midweek on the stock and before the official launch of the iPhone5.

“Apple (AAPL, $660.39, down $0.20) is expected to announce the iPhone5 today and there are a ton of analysts saying shares have a history of selling off after a product announcement.  While this is true, this time could be different as Apple will sell a ton of these phones.  There are also rumors of an iPad mini which would also be big news.” (END)

Shares of Apple were up $30 afterwards and $10 for the week.  If shares do selloff from here or pullback, you can bet there will be a knucklehead that says, we told you so.  Well, if they do, we will have to remind of them of the $40 point pop AFTER the announcement. 

Apple won another key legal verdict last week that will allow them to file for an injunction against Google’s Motorola devices.  This follows a huge legal victory against Samsung and gives Apple leverage going forward.  As far as the iPad mini, we think it could now come in October which could get shares to $750-$800 on continued momentum.    

With Europe and the Fed yesterday’s news, the market should continue higher this week and into month end as some mutual and hedge fund managers will surely be chasing.  Many of them have sat out the rally following their August vacations and we told you they could be forced to buy as they also discounted The Bernanke whom they thought would disappoint the market.  It’s a good thing poker is our second favorite profession besides trading options.” (from 9/16/2012 Weekly Wrap/ Monday Morning Outlook)…

The bulls got off to a slow start for the week as the market struggled to retain its momentum following the QE3 here at home and around the globe quantitative easing efforts.  A slight pause was expected following the strong September gains but the bears didn’t have much luck with trying to crack support and their lack of energy showed. 

The pace picked-up by Wednesday as the Dow challenged new highs but a slowdown in China and uninspiring unemployment numbers weighed on Thursday’s action.  Our prediction of a bullish option expiration Friday based on history looked good for much of the session but the bears played just enough defense in the final hour of trading to pull even and win the week.

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