9:00am (EST)
Although we do a lot of homework, it’s amazing how easy it has been to bet against the Wall Street pros and Debbie Downers this year and since last August. We reminded you yesterday in early November when the Dow was at 11,800 and on the verge of breaking down like a rented mule the blue-chips would still rally 1,000 points.
We have also been saying a close above 1,300 on the S&P 500 would get the index to 1,325-1,350 on fluff. We reminded readers Sunday night in our Weekly Wrap it was only a 2% move from Friday’s closing price to our top-end short-term target.
We also said yesterday, it would be interesting if Tech could muster a close above 2,800. We have been telling you to circle 2,887 which is the 52-week high for the Nasdaq and to pencil-in a possible trip to 3K for the index.
We said in October when the VIX was above 30 it was headed to 22.50. From there we said a run to 15 could come.
The market is making us look like geniuses right now (although it can humble us in a New York minute) and as an option trader, it’s important to strike the iron while it is hot. No one knows where the market is headed today, tomorrow, or next week but chart work does help. Following the VIX does help. Listening to the talking heads get it all wrong does help.
We are saying this because we have the best job in the world and more and more of you are learning our trading style through our option trading manual and videos which is awesome to see. Like we say, what else are you going to do when you retire? If you learn to trade with us now, the education we will give you will last a lifetime. Our special offer will expire at the end of the month and we give you the details below…
The market surged higher on Wednesday but not the way Wall Street expected. Instead of Apple (AAPL, $446.66, up $26.25) leading the way, it was Big Ben who said the Fed was ready to turn on the money presses if needed. In fact, here was his money quote that put the bulls in a frizzy:
“I don’t think we’re ready to declare that we’ve entered a new, stronger phase at this point. If the situation continues with inflation below target and unemployment declining at a rate which is very, very slow, then the logic of our framework says we should be looking for ways to do more”.
Bingo. The rest of the trading session was bear history.
The Dow jumped 81 points, or 0.6%, to settle at 12,757. The blue-chips traded down to 12,580 which stretched short-term support at 12,600. The high for the day was 12,778, or a double-deuce (22 points) from our 12,800 target. There is room for a run to 13,000 but we are getting nervous.
The S&P gained 11 points, or 0.9%, to finish at 1,326. The low for the session was 1,307 which was slightly above support at 1,300. The high was 1,328 and the index closed within our 1,325-1,350 zone. There is a chance 1,375 comes into play put the market genie may not grant us that wish before a pullback comes.
The Nasdaq added 32 points, or 1.1%, to end at 2,818. Tech traded up to 2,822 and is 70 points away from making new 52-week highs. The bulls will need to add another 2% without Apple’s help which could be asking for a lot unless shares are headed to $500 by month’s end.
Special Note: Our one-year deal will expire in 6 days and here are the details. If you sign-up for a 1-year membership to our Daily newsletter, we will include a 1-year subscription to the Weekly Wrap which is priced the same as our Daily. We will also include our option trading manual “How to Trade Options on Momentum Stocks” at no charge (an $899 value!) and shipping is on the house. The course also includes our “Momentum Stocks Watch List” which details over 1,000 stocks and dozens of sectors. Your subscription will also include our monthly/ bi-monthly videos which cover chart work, current trades, and possible new ones we don’t mention in the newsletter or Watch List.
We have set up a special tab on our subscription page where you will see both the Daily and the Weekly in a package deal that reads Annual Subscription to Daily and Weekly Wrap.
https://secure.momentumoptionstrading.com/amember/signup.php
Do the paperwork and we will send out our option trading courses to you within 24 hours and provide you access to our videos right away.
The Weekly Wrap went 16-0 in 2011 and is 7-0 to start 2012. The winning trades for January were: SGMS +6%, VVUS +17%, F +8%, AA +7%, CLNE +27%, DNDN +18%, MGM +19%.
In 2011, we traded Vivus 3 times for the Weekly Wrap for gains of 18%, 14%, and 17% as the stock stated the year at $9.73 and ended at $9.75. Now it’s at $12 and we are still riding the wave. By writing call options on 4 different options trades ( 1 for 2012), we were able to book profits of $122, $130, $125 and $161. Folks, that is $538 in profits on a stock that stayed flat or a return of 55% using call options.
The savings on this package is 67% and we will not offer this deal again in 2012. For those of you on monthly memberships, time to super-size. Tell your friends.
We have 2 NEW TRADES we are releasing this morning and we are going to try to get them at the open using limit prices. Subscribers, check the Members Area for details and keep your boots to the ground. We have 10 other current trades we are trying to lock down profits in.