Although it is not our typical Friday to play some office tunes, we thought today’s title would say it all.
The market will finish 2013 with its best year since the mid-1990’s as the bulls put the finishing touches on an incredible rally. The Dow is on track for its 52nd record close and best year since 1996 while the S&P 500 will end the year with its best gain since 1997.
Of course, there is still a second half of trading to go but we are going into the New Year with some very profitable positions and other trades that are showing strong gains. We have already starting doing homework for January and 4Q earnings season that gets underway in a few weeks and we are super excited.
We are seeing signs of a extreme volatility ahead and we aren’t sure if and when a massive correction could be coming but odds are one will. With the Dow up over 3,000 points for the year, the Fibonacci Retracement levels are scary as they could mean a correction of 1,500 points – or more for the index. Yikes!
We don’t predict our yearend targets for the indexes until after January wraps up but this is something we have to consider in forecasting where 2014 will end. The important thing we want to remind you of is that there will be a wheelbarrow full of profits to made when there is a correction and fear is in the air. For those of you just joining us, please look at 2008 and some of our put option trades. When the Dow was dropping 777 points in a day, profits of up to 800% can be made in days.
Remember, most investors (and Wall Street) only know how to profit when the market goes up and not down. We do. The slick talking pros that told you to stay out of this year’s market after 5% gains every other month missed the rally as they waited for a pullback that never came. Each new high was met with “I’d take some money off the table at these levels”.
We will be closing our sixth-straight year of profitable trades and we doubt very few option newsletters can say the same. We were the only options publication that we know of that called for Dow 16,000 this year and here were our thoughts the first week of February:
“We expect maybe another 2% rise over the next few weeks, followed by a 5%-10% dip by April. By then, we should know if the economy is “growing” or “stimulating” the way the zombies expect.
The one aforementioned sentence we want to remind you of this:
“The gains can be even staggering during post-election years as some periods have seen the market move 20% higher.”
A less than bullish, but still double-digit gains from here would be Dow 15,400; S&P (500) 1,650; Nasdaq 3,500; Russell (2000) 1,000 for 2013. These targets are roughly 10% from current levels with some adjustments.
To get to our 2013 yearend targets, we took all of the bullish (and bearish) factors and split the difference of an advance of 10%-20% higher along with the price channels we have drawn for you.
Now for the drumroll…
Dow 16,000; S&P (500) 1,700; Nasdaq 3,800; Russell (2000) 1,025. (END)
We also posted “fluff targets” and had this to say in our November 17 Weekly Wrap:
“We have no plans to change our February yearend targets of Dow 16,000; S&P 1,700; Nasdaq 3,800; and Russell 1,025 – the charts are telling us there is fluff up to Dow 16,250-16,300; S&P 1,825-1,850; Nasdaq 4,000-4,200; and Russell 1,175-1,200.
We have mental notes on all the warning signs we need to watch for on a trend change or pullback but we don’t believe the bulls have come this far without ringing Dow 16,000 with an overshoot to higher highs.” (END)
We aren’t trying to toot our own horn about our incredible market calls because we don’t roll that way but our point is we do an incredible amount of homework and chart work every day and every week and why we have success. We also know the market can be humbling.
We have been long-winded today but we felt it was important to talk about what has happened so far in the market and what could happen in 2014.
We have some last minute updates on our current trades and with a light portfolio entering January, we will have plenty of room to add new option trades in the coming weeks.
The Dow is currently up 46 points to 16,550 while the S&P 500 is gaining 6 points to 1,847. The Nasdaq is advancing 18 points to 4,172 and the Russell 2000 is higher by a deuce to 1,163.
Subscribers, check the Members Area for the last-minute updates (although there could be another before the close, if we see any opportunities) for our current trades. We have a Profit Alert for CLF.
We will be sending out the final 2013 results for both our Weekly Wrap and Daily portfolios over the weekend. Also, ALL of our prior years are posted on the website with all trades dated and time-stamped with our daily and weekly updates inside our Members Area.
We will be back Thursday morning at 9am (EST) sharp! Have a great New Year’s Eve everyone and be safe.
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