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Bulls Resting, Will Bears Show Up Next Week?

1:00pm (EST)

The market has traded in a tight range although the bulls are still the fat kid on the see-saw.  The major indexes are showing slight gains as traders seem tentative to build positions ahead of 2Q earnings.

The Dow is up 5 points to 10,144 while the S&P 500 is higher by 2 points and is at 1,071.  The Nasdaq is showing a 5 point pop and is at 2,180.

The talking heads like to say Alcoa (AA, $10.80, up $0.08) kicks-off earnings season and on Monday they will, but, we are here to say Intel (INTC, $20.03, down $0.07) will officially handle those duties on Tuesday.

intc070910

Shares of Intel are down 18% from its 52-week high of $24.37 and the low is $15.86 so shares are pretty much in the middle.  Intel has a nice history of beating earnings, but a few analysts have been downgrading the stock ahead of earnings.  The options market is pricing a 5% move in the stock when the company announces so we can expect a slight move up or down.  However, if Intel happens to miss earnings then it could get nasty for shareholders.

This week was light on news and the rally has come on light volume.  That worries us.  It’s okay to say maybe we didn’t call an “exact” bottom, but we did call for the pullback that started in May.

Just like any battle, we like to wait for our next move which is why we are letting our current trades play out.  We have been building a nice Watch List, and we will be back in action next week with some high reward/ medium risk trades.  We are going to cover quite a few trades that have homerun potential including another look at two Biotech companies, Dendreon (DNDN, $31.86, up $1.56) and Vivus (VVUS, $11.90, up $0.21) which we are close to adding.   

We have followed these stocks and alerted our subscribers when shares were under $5 for both of these companies.  In fact, there is a major news announcement coming for Vivus, and Dendreon is making the rounds as a takeover candidate again.  We are looking for huge price swings in both of these companies, but we want to do some more research over the weekend before pulling the trigger on a trade.

We are excited as we look forward to the next few weeks and months, and we think there will be a ton of great opportunities to go both long and short this market.  It will just take more homework with the volatility being taken up a notch.

We will be back on Sunday night with the Weekly Wrap, but subscribers can check the Members Area for one last update before we go.

See you Sunday night, and have a great weekend everyone!

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    REGINA L.
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    Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace!

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    Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You.

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    Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks.

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    I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade.

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    Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today.

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    “I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

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    “Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

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    GREG
    “Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

    KEN
    “Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

    GARETT
    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

    TERENCE
    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”

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