1:15pm (EST)
The chatter of a bubble, a top, frothy, overextended and the market has peaked reached new heights yesterday as the talking heads interviewed a lot of bears. Major financial publications have warned of a market correction in recent weeks saying THE top is in but all of them have been wrong all year long.
The gains in January needed to be sold. Sell in May and go away, the summer doldrums, a shaky September, a scary October. Sound familiar?
Much of the market noise is created by people who don’t do homework and we try our best to ignore the music. The talking heads simply react to the market instead of planning on where the market will be.
In early February, our yearend Price Targets for the indexes were Dow 16,000; S&P 1,700; Nasdaq 3,800; Russell (2000) 1,025. We always wait until January finishes to predict our yearend targets and most of our subscribers thought our PT’s were frothy.
We are still waiting on the Dow to play catch up and although the other 3 indexes have triggered our targets, we won’t mind under guessing if the major averages end higher or at current levels.
Of course, there are still 7 weeks of trading left and the market will continue to face headwinds and tailwinds we always keep our Price Targets as is. Some of the knuckleheads that come on the tube have been raising theirs all year and some are now lowering them.
We like to keep it simple by playing the trend and while the market is still in an uptrend, we did warn 2 weeks ago a trading range could develop with the Dow showing some strength. We have been covering the Dow Theory in recent weeks and we will wind up the overview this weekend as it has proved to be a helpful tool.
Today’s action has been bullish as a surprising Nonfarm Payroll report that weighed on futures is now being taken bullishly. Another encouraging sign is the Financial stocks are showing some strength and they will be needed if the bulls are going to continue to push new highs.
We said Friday’s have been bullish and the volatile week has shaken out the weaker hands. There could be another week of a trading range but with November options expiring next week, there will be a battle at key strike prices so anything can happen.
We are still trading somewhat light as we have 3 November trades in play that we are riding out. We have started a few December and January trades but we don’t want to have too many bullish positions open until we get confirmation the next leg up is underway. We could be getting close.
We have a ton of good news we will be bringing you next week, including our annual promotion we only run once a year. We are excited as we are closing out our sixth-straight year of profitability.
We have returned some incredible gains over the past 2 months and continue to provide the BEST options trades in the business. Take a look at these gains in September and October:
+213% OPK (LEAP) call options
+103% NPSP call options
+319% JCP put options
+182% NPSP (LEAP) call options
+67% KOG (LEAP) call options
+172% NPSP call options
+201% CRM call options
As far as the market, today’s rebound is what we were looking for. The Dow is up 87 points to 15,681 while the S&P 500 is higher by 15 points to 1,762. The Nasdaq is advancing 54 points and is back above 3,900 to 3,911. The Russell 2000 is jumping 19 points to 1,098.
We have some last minute updates for our current trades and there is an earnings play we are still on the fence with that we could make an official recommendation before the close. If we take a position we will send out a Trade Alert but if you don’t hear from us we will be back Sunday night with the Weekly Wrap and Monday morning with the Daily. Until then have a great weekend everyone!
