MomentumOptionsTrading.com Midday Update for 4/11/2014
Bulls on the Brink/ New Trade (RMBS)!!!
Given the severity of Thursday’s pullback and the way futures were shaping up, it was only natural there would be a continuation of selling pressure coming into the open. The bulls are bending but the bears are having a hard time breaking the next layers of support.
The wiggle room the bulls had left has also evaporated and we said today’s close will be super important in determining where the action could be headed next week. We are still bullish as we make the turn and believe the bulls will bounce back next week, if not today, but we have no problem riding lower lows if a new trend is developing.
We will also be in great shape to play a pending “correction” if one is coming, or a strong rebound to fresh highs, as our portfolio is light. It doesn’t mean we haven’t been trading, as we closed out another winner yesterday, but we have been preparing for this divergence for 3 weeks.
Our portfolios are showing incredible gains as we have more than doubled our Daily portfolio (currently up 131%) and our Weekly Wrap portfolio is up double-digits (16%). We have nearly a 70% win rate for all of our trades and we doubt any other option newsletter is having the year we are.
We have managed to be successful because we don’t follow the crowd and we do our homework. While it is tempting to go short, we have said if and when a nasty correction comes there will be plenty of time to start new put positions or to short stocks but we just don’t think now is the time.
Next week could be the week but most of the technical indicators we use are showing the bulls might fight next week. However, if lower levels come into play, today could be confirmation day that a new sheriff is in town.
As we make the turn, the Dow is down 68 points to 16,101 and the S&P 500 is declining 5 points to 1,827. The Nasdaq is lower by 11 points to 4,042 while the Russell 2000 is falling 7 points to 1,120. It is no coincident this is where the indexes are at because these are the downside targets we said the bulls needed to hold today.
We will be watching the market into the close and we have a New Trade we are getting into as we head to press. We also have a current option trade that is up nearly 200% so we may close half ahead of the weekend or we may let it ride as the chart is showing continued weakness. For now, we are letting the gains ride but we could have a Profit Alert or additional Trade Alerts into the close.
If you don’t hear from us, we will be back Sunday night with the Weekly Wrap and Monday morning with the Daily. Until then, have a great weekend everyone and enjoy the weather!