1:15pm (EST)

We said no Greece deal would weigh on the market this week and perhaps keep the reins on the bulls.  If the closing bell sounded right now, the week would end mixed with Tech showing the only positive finish.  

The Dow came into the week at 12,720 and is at 12,646, down 88 points.

The S&P 500 started Monday at 1,315 and is currently down  5 points to 1,313.

The Nasdaq began the week at 2,786 and is at 2,808, up 3 points. 

Over a quarter of the S&P 500 companies have announced earnings this week and next week  marks the height of the season before we start tapering off.  Some of the companies we will be watching like a hawk next week include Aflac (AFL, $48.70, down $0.08), Amazon.Com (AMZN, $195.20, up $1.88), Broadcom (BRCM, $35.20, down $0.09) and United Parcel Service (UPS, $75.98, up $0.14) on Tuesday.

Wednesday, Chipotle Mexican Grill (CMG, $364.80, down $1.01), Electronic Arts (EA, $17.91, up $0.25), Green Mountain Coffee Roasters (GMCR, $52.61, up $3.27), Hershey (HSY, $61.37, down $0.16), Las Vegas Sands (LVS, $49.22, up $0.25) and Qualcomm (QCOM, $57.62, down $0.20) will announce their quarterly results.

Thursday and Friday will also feature some companies of interest and these are some of the main stocks we actively follow just to name a dozen or so.

We continue to chuckle when we hear that stock picking is a lost art, which we have heard for the last 3 months.  We must be doing something good to hit 17-out-of-18 wininng trades to start the year for our Daily and to go 23-0 over the last 13 months for our Weekly Wrap covered call trade Portfilios.

We have some last minute updates to the 2 new trades we added this morning as we have added our exit targets.  Let’s go see where we are at inside the Members Area. 

January has been incredibly good to us and we will cover the charts for the indexes and our current trades on Sunday night in our Weekly Wrap and Monday morning for the Daily.  We have a busy weekend of homework but it isn’t “work” because we have been banking profits all month long.  Until then, have a great weekend everyone!

11:35am (EST)

We are adding 2 NEW TRADES to our DAILY portfolio this morning and another Microsoft (MSFT, $29.28, down $0.22) call option trade of ours has been closed this morning after our Hard Stop was hit.  The trade returned 70% in 3 weeks.  We have gotten off to a sweet start for 2012 as we have now closed 17-out-of-18 winning trades.  Subscribers, check your email inbox or the Members Area to get the new trades.  As usual, use limit prices to get the best fills. 

*****************************

If you are not a subscriber but would like to be, please click here.  We are one of the fastest growing stock options trading advisors on the internet.  We offer powerful call and put option trades aimed at triple-digit returns for our Daily newsletter.  Our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and ended 2011 with a 16-0 record.  Last week, the 2012 Portfolio closed out 7 winners to run our record to 23-0.  Sign-up now and receive access instantly!

9:00am (EST)

The bulls made a run at the April/ May 2011 highs on Thursday and now the Wall Street pros and talking heads are calling for a pullback.  Funny thing is, they have been calling for a correction all month.  Economic news was decent and earnings once again came in above expectations but Wall Street was right, the market “pulled back” yesterday.

A bigger-than-expected jump in durable-goods orders, which came in at 3% versus expectations for a rise to 2%, was the good news.  The semi-bad, unemployment edged-up as Initial Claims jumped 21,000 to 377,000.  This is still below 400K and we said to watch this rise in January.  If claims can stay below 400,000 in February, and maybe improve, then the bulls might still have some gas in the tank. 

After 4 steps forward, housing took one step back as sales of new single-family homes fell for the first time in four months in December.   This was expected in our books as homebuyers usually focus on the holidays in December if they didn’t rush to get into the new house by Christmas or knew the paperwork wouldn’t be finished in time.

If we can get some rebound numbers in February, which starts next Wednesday, then the rally might have further to run.  It’s been a warm winter here on the Left Coast this year.

As far as the official numbers -

The Dow dropped a double-deuce (22 points), or 0.2%, to close at 12,734.  The blue-chips reached a peak of 12,842, which triggered our 12,800 target we gave back in November, while the low was 12,695.

The S&P 500 slipped 8 points, or 0.6%, to settle at 1,318.  The index kissed 1,333 but traded outside our 1,325-1,350 zone after touching a low of 1,313 with an hour to go in yesterday’s session.

The Nasdaq fell 13 points, or 0.5%, to finish at 2,805.  Tech traded up to 2,834 and held our 2,800 target after kissing 2,794.  We have said to watch 2,887 which is the 52-week high for the index and have mentioned a run to 3,000 could come on fluff.

The S&P Volatility Index (VIX, 18.57, up 0.26) traded down to 16.80 at the open and we have been saying for months the VIX was would move from the mid-30’s, down to 22.50, and then down to 15 on a continued run by the bulls.  The “fluff’ should get the VIX down to 15 but we also realize the VIX could trade down to 12.  For news subscribers, a declining VIX is bullish.

A few weeks ago we said to be prepared for a pullback in February which doesn’t start until next Wednesday and the first full week of February isn’t until next Monday.  With ALL of the suit-and-ties, talking heads, and everyone else going on record this week and saying this week is the top, maybe the market ignores them until February officially starts.   

This leaves a lot of room for a run past resistance and the “fluff” could give Wall Street fund managers fits because they are already underperforming the market.  This could also get some money off the sidelines from individual investors.  The market could also get some positive Greece news today or next week which could also extend a possible 4-week rally into next but the bulls have to hold their lead today which we will cover in the afternoon update.

Then again, the market could pull back but it will take a lot to change the TREND and we have support pegged. 

We have closed 3 more winning call option trades this week for profits of 114%, 58% and 107%.  We may close one or two more trades today and our 2012 CLOSED Track Record is now 16-1 for the Daily and 7-0 for the Weekly Wrap.  Let’s keep the momentum going.

Futures are lower as we head to press and look like this:  Dow (-55), S&P 500 (-6), Nasdaq (-7).  Subscribers, check the Members Area for the updates.   

12:45pm (EST)

Netflix (NFLX, $116.04, up $21) surprised Wall Street and the talking heads after the bell last night when they reported a better-than-expected quarter.  The bar was already lowered so let’s get that out of the way but the results were impressive.

The company posted a profit of $40.7 million, or $0.73 a share, versus $47.1 million, or $0.87 a share, in the year-ago quarter.  Total revenue checked in at $875.6 million, up 47% from the quarter last year.  

Here was our chart work on Netflix at the beginning of the year when shares cleared the 50-day moving average (MA) and our thoughts:

“We aren’t sure if a bottom is in but shares could be on the verge of breaking out of a trading range (blue box) in the chart below.  Yesterday’s close above $80 was bullish for a run into the $90’s (black line) which is where the next patch of resistance lies.  If shares can clear this level there is a chance for a run back to triple-digits ($100-$120) believe it or not.” (END)

Here is what the chart now looks like with the $90 and $120 drawn out:

We mentioned the great chart work we have been doing lately but we failed to capitalize on this move as our portfolio has been pretty full and the options were expensive.  We normally like to play options that cost $2 or less and we peaked at the Netflix February 115 calls (NFLX120218C00115000, $7.40, up $4.50) before yesterday’s close and they were at $2.80-$2.90. At the beginning of the month they were under 50 cents.

Netflix was at $95 before Wednesday’s closing bell and when we factored in a 10% price move it put shares at $104-$105 which was below the strike price.  We were also nervous that customers wouldn’t be back so soon and their content costs so we sat on the sidelines.  It would have been a big risk but the February 115 calls are up 150% today alone.  

Netflix also trades WEEKLY options and the January 110 calls (NFLX120127C00110000, $6.30, up $4.15) were at $2.15-$2.25 before the close but these options expire tomorrow.  Although the options are up 200%, we didn’t feel the risk/reward was favorable enough for us to pull the trigger.  The option premiums were juiced and if Netflix would have missed estimates, these trades would have been all-or-nothings.

We’ve been doing fine without Netflix but we should’ve trusted our chart work.

As far as the market, following a gap higher at the open, the index are struggling to hold their gains.  The Dow is up 10 points to 12,767 while the S&P is lower by a 4 points to 1,322.  The Nasdaq is off by 9 points to 2,809.

We have a lot to cover in our Members Area today as we are taking action on another current call option trade that is up nearly 60%.  We also want to cover the 2 new trades we released this morning so let’s get on it.

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.