The bulls finally caught a break and had some momentum before the bell on Wednesday but struggled to hold their gains as a Greece deadline looms. We held off a day talking about the cash-strapped country because much of the rhetoric is the same and because Greece is still talking to the troika on austerity measures.
The troika is the 3-headed monster made up by the International Monetary Fund (IMF), European Union (EU), and European Central Bank (ECB) and we have mentioned how all three are trying to help Greece pay the mortgage.
We won’t go over all of the proposed details but we can imagine the sheets hitting the fan when the Greek government workers, who are promised jobs for life, get a pink slip. The general public probably won’t be too happy with a 20% cut in minimum wage.
Despite the nervousness, the bulls won their second-straight session and now hold a slim lead for the week.
The Dow added 6 points to end at 12,883. The blue-chips traded within a tight 76 point range with the high at 12,893 while the low was 12,817. The 12,800 support level has held up well this week but it feels like we are skating on ice.
The S&P 500 gained 3 points and settled just under our 1,350 target at 1,349.95996 to be exact. The index did trade to a high of 1,351 on the dot and these funny numbers might be giving us a bulls or bear clue. Remember, we want to see a close above 1,350 this week or our February pullback (which we predicted in early January but told you to stay long) could be on the horizon.
The Nasdaq added a dozen points and finished at 2,915. We mentioned Tech was at a decade high, and the index reached a peak of 2,918 yesterday, but we still need another 3% move before our 3,000 near term-target is hit.
Although the bulls have the lead for the week, they have been unable to close above our near-term targets. This is making us a little nervous but we have been closing our bullish call positions and banking as much cash as we can before there is a pullback.
We do have some open March, April and June call options that are open but we have locked in half profits on some of them and have stop targets in place to protect profits. We only have two open February positions which expire next week so we are in beautiful shape.
We have turned a $10,000 portfolio into nearly $30,000 in just 6 weeks as we have hit 22-out-of-23 winning trades to start 2012. You can request our track record if you are not a subscriber to see the detailed trade-by-trade performance.
Breaking News – a statement on a Greek debt deal is imminent.
As we head to press, futures look like this: Dow (+12), S&P (+1), Nasdaq (+1). Subscribers, check the Members Area for the updates.