9:10am (EST) 

The market ended mixed on Thursday despite a number of fantastic earnings reports and an upbeat round of economic data.  The bulls took 2-out-of-3 from the bears after the latest jobless report revealed that initial claims for unemployment benefits fell by 5,000 last week.  It was the third consecutive decline in jobless filings and sets the stage for an improving jobs report in April. 

The Labor Department also said its Consumer Price Index (CPI) was unchanged in February, suggesting that inflation remains relatively tame. In other economic news, the Conference Board’s index of leading economic indicators rose 0.1% and the Philadelphia Fed Index for March came in at 18.9, which was slightly above the reading of 18 that Wall Street had been expected.

As a result, the Dow rallied 46 points, or 0.4%, and settled at 10,779.  The index traded as high as 10,784 and went out near its high which was a good sign as we zone in on our target of 10,800.  We know we are within spitting distance, and if we were playing horseshoes this would work but we really would like to see a close above this level today.  That would pave the way for Dow 11,000 depending on what happens with healthcare this weekend.

The Nasdaq added a deuce and closed at 2,391 but traded in a tight range as we try to close above the 2,400 level we have mentioned.  We touched this level on Wednesday but missed the mark yesterday as the index only made it to a high of 2,394.

The lonesome loser was the S&P 500 which slipped a half-point to finish at 1,165.  Our target is 1,175 then a possible run to 1,200.

Folks, we have been flagging these targets since August and we nailed it when the indexes traded near these levels in January.  The market then faded but we knew these targets would come into play once the bulls got back on track.  However, now that we are here again, you can see where we are running into resistance and it will be important for the bulls to make a statement to get us through this level.

Today is “Triple Witching” so we could see some added volatility with the March options expiring.  There will be battles fought at all levels and a lot of key strike prices will come into play as both the bulls and bears try to get the prices they want.

We can give you a great example this morning and all you have to do is watch the action in Palm (PALM, $5.65, up $0.28) today and into the closing bell.  The company reported earnings last night and in after-hours trading shares were below $5.  Palm issued a revenue forecast for the current quarter that was far below analysts’ expectations.

The company said it lost $18.5 million, or $0.13 a share versus a loss of $95 million, or $0.89 a share, in the year-earlier period.  Revenue more than tripled to $350 million compared to $90 million but Palm is a mess.  

Wall Street was expecting the company to report a loss of $0.42 a share on revenue of $316 million.

The problem with Palm is that their inventory is built up at wireless carriers and sales aren’t as brisk as they once were.  Even their CEO admitted to “execution missteps” in a conference call and said they are working “aggressively” to boost sales.

Yeah, good luck buddy catching Apple (AAPL, $224.65, up $0.53)

Palm is facing a rapidly closing window to carve out a space in the competitive smartphone market and this report shows how they have dropped the ball.

As far as action, watch the March 5 puts (UPY100320P00005000, $0.17, down $0.03) and the April 5 puts (UPY100417P00005000, $0.44, down $0.05) today.  We had the March puts on our Watch list Monday and Tuesday and they were at 10 cents.  We should have backed the truck up because we had a feeling this dog was going below $5.

Shares of Palm are at $4.62, down $1.01 in pre-market trading.

As we head to press, Dow futures are up 11 to 10,728; S&P 500 futures are up 3 to  1,163; Nasdaq 100 futures are higher by 2 to 1,945.  Subscribers, check the Members Area for the updates.

12:30pm (EST)

Folks, we hit one out of the park today and we are smiling (no pun intended as you will see).  We have been busy all morning updating the action in our Members Area and we have another trade on the tip of our tongue as we speak.

We have been talking about Nike (NKE, $75.10, up $4.22) in our Members Area all week and we thought we would give those of you who haven’t joined us a sneak peak.  Here were our thoughts when we recommended a Nike call option trade in our 9am update yesterday morning:

“Action:  Tiger is back and the company reports earnings after the bell today.  It’s almost too good to be true and it just feels funny how all of this is coming together.  In fact, it almost feels like the perfect “buy the rumor, sell the news” event.

We are going to be honest with you.  This feels like a setup and we could get a baseball bat to the face on this trade if we are wrong.  But we like it and the options are only 50 cents.  A 10 contract trade is $500.

We recommended a Nike call option the last time out the company reported earnings which was back in November.  That trade returned 173% for our subscribers and we are hoping this one doubles. 

We doubt the stock moves 10%, or $7, on Thursday’s open but we do think a 5% move is a given.  That should be plenty to make the April 75’s double.

If Nike misses, we still have 5 weeks before the options expire.  Roll the dice.  Use limit orders of up to 65-75 cents but try to get them cheaper at the open.  If the calls open HIGHER than 75 cents, VOID the trade.” (END)

The calls we mention opened at 50 cents yesterday so we got even better prices than we anticipated.  They closed for a 50% paper profit by Wednesday’s close but have exploded today and are currently trading at $1.85.  We alerted our subscribers to close half of their position into strength but we can still ride the wave if Nike runs to $80.

We also have another trade we are profiling that we think has the chance to at least double so we released today’s update a little early.  We are also close to shutting down another trade for a 50% profit so timing is crucial for current subscribers.

As we head to press, the Dow is up 7 points to 10,740 and is going for 8-in-a-row.  The Nasdaq is down 2 to 2,386 while the S&P 500 is off 3 points to 1,162.

9:05am (EST) 

The market continued its winning ways on Wednesday as the bulls celebrated St. Patrick’s Day with a bang.  We mentioned yesterday the Dow was poised to test our near-term target of 10,800 and we almost hit it. 

We got some good economic news that helped fuel yesterday’s rally.  The Labor Department said the Producer Price Index (PPI) fell by a steeper-than-anticipated 0.6% in February as declining energy prices sparked the index’s sharpest drop-off in seven months. 

As a result Dow finished higher for the seventh straight session with all three major indexes settling at new highs. 

The Dow finished with a 48 point gain, or 0.5%, and closed at 10,733 after touching an 18-month high of 10,767.  If we can break 10-8 then we could easily see 11,000 come into play, quickly. 

Not to be outdone, the S&P 500 added 7 points, or 0.6%, to finish at 1,166.  Our target of 1,175 will now come into play and then possibly a push to 1,200.

The Nasdaq also notched another 52-week high and actually kissed our 2,400 target.  The index settled at 2,389, up 11 points (0.5%) after touching the 2,400 level for the first time since September 2008. 

In earnings news, Nike (NKE, $70.88, up $0.50) is getting a lift this morning after the company reporting earnings of $1.01 a share for the quarter, versus $0.99 a share in the same period last year.  Wall Street was expecting the company to report a profit of $0.89 a share.

Sales came in at $4.7 billion versus $4.4 billion last year.  Analysts were looking for sales of $4.6 billion.  Gross margins increased to 46% from 43% in the same period. 

There were a lot of nervous traders on Wall Street who were worried about the quarter and future orders.  Those fears were put to bed after Nike said worldwide future orders for Nike brand athletic footwear and apparel, scheduled for delivery from March through July, was $7 billion, or 9% higher than orders in the year-earlier period. 

Wall Street considers the futures an indicator of future sales and this is why we are seeing the continued strength in the stock ahead of the bell.

Shares of Nike jumped in after-hours trading last night to over $73 and the gains have held as the stock is showing a pre-market bid of $74+.  We were all over this trade like moths on a campfire and our subscribers are easily looking at triple-digit profits on a call option trade we profiled yesterday.  In fact, it could turn out to be our biggest trade of the year so far once we close it.

As we head to press, the Dow futures are up 16 point to 10,679 while the S&P 500 futures are showing a 1 point gain and are at 1,162.  The Nasdaq 100 futures are showing a 3 point pop to 1,937.  Current subscribers, check the Members Area for the hot details.

1:10pm (EST) 

The Dow is rolling today and has hit a 17-month intraday high as a drop in U.S. wholesale prices reduced inflation worries and have the bulls seeing green again.

The Labor Department reported a 0.6% drop in the producer-price index for finished goods in February, following an unrevised 1.4% increase in January.  The news helped reduce Wall Street’s worry on inflation and the risk of higher interest rates.  Yesterday, the FOMC said it will keep interest rates near zero for a little while longer.

The Dow is currently up 46 points, or 0.4%, to 10,732.  The index reached an intraday peak of 10741 and is looking to close above its January high close of 10,725.

The S&P 500 is higher by 7 points and is at 1,166 while the Nasdaq is up 15 to 2,392.

Well, it looks like our prediction of Blockbuster (BBI, $0.26, down $0.13) came true sooner than we thought.  The company declared in a SEC filing that it might be forced to file Chapter 11 bankruptcy if video rentals sales don’t pick up.  Blockbuster is unable to restructure its debt and has about $1 billion in debt. 

The market is following our road map but the fork in the road could be the vote on healthcare this weekend.  We still think the market can climb the wall of worry and if the Dow can close ABOVE its January highs then we could see our second set of targets come into play for the indexes.

We have a lot to cover in our Members Area so let’s get to it.

10:08am (EST) 

We have just added another new trade.  Subscribers, check the Members Area for the update!