7:00pm (EST)
“Baby, we were born to run…”
The bulls had a theme song last week and were singing all day long Friday as the market surged following the unemployment report. The Labor Department said employers cut 36,000 jobs last month, better than the 50,000 cuts and 9.8% forecast by Wall Street’s wizards.
The unemployment rate held steady at 9.7% and is seen as the most important measure of the economy’s health. The U.S. unemployment hit 10.1% in October but is slowly recovering as employers gain confidence in the economic recovery.
Another good tidbit of news…the Federal Reserve reported Friday that consumer borrowing rose by nearly $5 billion in January, surprising the pencil pushers who were looking for borrowing to decline by $4.5 billion. The helps lift the market to new highs in the final hour of trading as it was the first gain after a record 11 straight declines. It was also the largest increase since July 2008.
As a result, the market climbed more than 1% as all three indexes continue to push towards their January highs. It was also the bulls’ best week since early October 2009.
The Dow rose 122 points, or 1.2%, to finish the week at 10,566. The index toppled the 10,500 level for the first time since mid-January and showed a weekly gain of 2.3%, or 241 points. The Dow’s high for 2010 is 10,767.
The S&P 500 jumped 16 points, or 1.4%, to close at 1,138. For the week, the index advanced 3.1%, or 34 points, and is within shouting distance of the January 1,050 high.
Finally, the Nasdaq surged 35 points, or 1.5%, to settle at 2,326. Tech added an impressive 3.9% for the week, or 88 points, which is the EXACT high that was set in January.
We kind of expected the “Christmas rally” to stall in January as the targets we had set back in August were nearly hit. In last Sunday’s Weekly Wrap we mentioned the targets of 1,175 for the S&P 500; 2,275 for the Nasdaq; and 10,800 for the Dow. We said there was a good chance for a rally and a “retest of the January highs over the next few weeks could come into play.
Well, here we are. Given the current sentiment, there could be a “rush” by some investors to get back into the market and this is what we have been planning for. We said on Friday in our Members Area that we think Monday will be a HUGE day for the market. A tide to lift all boats so to speak…
The weekend futures were showing strength on Saturday but are pretty much flat as we go to press. The Dow futures were showing a 114 point pop but have slipped and are currently unchanged; S&P 500 futures are showing a half point gain after being up 14; the Nasdaq futures are up 2 points.
If we do get another week-long rally, then our NEW short-term targets would be Dow 11,000; S&P 500 1,200; Nasdaq 2,400.
This week, several retailers will post earnings as the sector appears to be recovering from a year-long slump. We have one trade we are eyeballing and will probably be recommending put or call options on a few more.
As far as economic news, there will be plenty to digest. The monthly trade deficit will come out Thursday but little change is expected for January from the month before. On Friday, we get February retail sales and January business inventories, while the Reuters/University of Michigan issues its preliminary reading for the March consumer sentiment index.
We would love to see the market continue its winning ways and maybe Saturday’s futures were giving us clues on where we could be headed. We still believe we can at least test the 2010 highs this week and possibly higher but nothing is a given in the stock market. We could test and fall right back into the trading range. We mentioned earlier that the Dow hit a high of 10,767 which we reached in mid-January. Two weeks later, the index was struggling to hold 10,000.
There are still plenty of headwinds the market faces and any hint of an economic recovery could lead to higher interest rates. We don’t think this is necessarily bad news but small businesses and start-ups are still getting shunned for loans so the the Fed will be walking a tight rope. This is where the jobs are created and we are still seeing many big firms cut back.
We will be back Monday morning with the earnings preview and we will have a complete update for all of our open trades as well as several new trades in the offering or waiting in the wings. See you at 9am, folks!
Tags: option picks, option signals, options alerts, Stock Market Weekly Wrap, stock options trading
This entry was posted
on Sunday, March 7th, 2010 at 7:08 PM and is filed under Market Analysis, Market Commentary, Weekly Wrap.
You can follow any responses to this entry through the RSS 2.0 feed.
Both comments and pings are currently closed.
Get RSS Feed
MomentumOptionsTrading.com Weekly Wrap for 3/7/10
7:00pm (EST)
“Baby, we were born to run…”
The bulls had a theme song last week and were singing all day long Friday as the market surged following the unemployment report. The Labor Department said employers cut 36,000 jobs last month, better than the 50,000 cuts and 9.8% forecast by Wall Street’s wizards.
The unemployment rate held steady at 9.7% and is seen as the most important measure of the economy’s health. The U.S. unemployment hit 10.1% in October but is slowly recovering as employers gain confidence in the economic recovery.
Another good tidbit of news…the Federal Reserve reported Friday that consumer borrowing rose by nearly $5 billion in January, surprising the pencil pushers who were looking for borrowing to decline by $4.5 billion. The helps lift the market to new highs in the final hour of trading as it was the first gain after a record 11 straight declines. It was also the largest increase since July 2008.
As a result, the market climbed more than 1% as all three indexes continue to push towards their January highs. It was also the bulls’ best week since early October 2009.
The Dow rose 122 points, or 1.2%, to finish the week at 10,566. The index toppled the 10,500 level for the first time since mid-January and showed a weekly gain of 2.3%, or 241 points. The Dow’s high for 2010 is 10,767.
The S&P 500 jumped 16 points, or 1.4%, to close at 1,138. For the week, the index advanced 3.1%, or 34 points, and is within shouting distance of the January 1,050 high.
Finally, the Nasdaq surged 35 points, or 1.5%, to settle at 2,326. Tech added an impressive 3.9% for the week, or 88 points, which is the EXACT high that was set in January.
We kind of expected the “Christmas rally” to stall in January as the targets we had set back in August were nearly hit. In last Sunday’s Weekly Wrap we mentioned the targets of 1,175 for the S&P 500; 2,275 for the Nasdaq; and 10,800 for the Dow. We said there was a good chance for a rally and a “retest of the January highs over the next few weeks could come into play.
Well, here we are. Given the current sentiment, there could be a “rush” by some investors to get back into the market and this is what we have been planning for. We said on Friday in our Members Area that we think Monday will be a HUGE day for the market. A tide to lift all boats so to speak…
The weekend futures were showing strength on Saturday but are pretty much flat as we go to press. The Dow futures were showing a 114 point pop but have slipped and are currently unchanged; S&P 500 futures are showing a half point gain after being up 14; the Nasdaq futures are up 2 points.
If we do get another week-long rally, then our NEW short-term targets would be Dow 11,000; S&P 500 1,200; Nasdaq 2,400.
This week, several retailers will post earnings as the sector appears to be recovering from a year-long slump. We have one trade we are eyeballing and will probably be recommending put or call options on a few more.
As far as economic news, there will be plenty to digest. The monthly trade deficit will come out Thursday but little change is expected for January from the month before. On Friday, we get February retail sales and January business inventories, while the Reuters/University of Michigan issues its preliminary reading for the March consumer sentiment index.
We would love to see the market continue its winning ways and maybe Saturday’s futures were giving us clues on where we could be headed. We still believe we can at least test the 2010 highs this week and possibly higher but nothing is a given in the stock market. We could test and fall right back into the trading range. We mentioned earlier that the Dow hit a high of 10,767 which we reached in mid-January. Two weeks later, the index was struggling to hold 10,000.
There are still plenty of headwinds the market faces and any hint of an economic recovery could lead to higher interest rates. We don’t think this is necessarily bad news but small businesses and start-ups are still getting shunned for loans so the the Fed will be walking a tight rope. This is where the jobs are created and we are still seeing many big firms cut back.
We will be back Monday morning with the earnings preview and we will have a complete update for all of our open trades as well as several new trades in the offering or waiting in the wings. See you at 9am, folks!
Tags: option picks, option signals, options alerts, Stock Market Weekly Wrap, stock options trading
This entry was posted on Sunday, March 7th, 2010 at 7:08 PM and is filed under Market Analysis, Market Commentary, Weekly Wrap. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.