We were hoping for a better outcome for the bulls but the way futures were acting, we had a feeling today could be flat or down. We said yesterday we would be happy if the market held at current levels following this morning’s unemployment report but it looks like we are headed for support again.
The one thing we keep mentioning is the current “trading range” and we were hoping for a breakout today. This didn’t happen but we are pleased to see support holding to a degree.
The Dow is down by 164 points to 12,092. We were looking for 12,200 to hold but we also realize 12,000 could come into play again. We would do back flips over the weekend if the index can close over 12,100.
The S&P 500 is lower by 17 points to 1,314 and we were looking for 1,325 to hold. There is additional support at 1,300 but it would be nice to see 1,310 hold.
The Nasdaq is off by 28 points to 2,770. We are watching the 2,750 level as key support but 2,700 could come into play if the down drift gets worse into the closing bell. The index has traded to a low of 2,768.
The good news is that the uptrend is still intact but the market will especially react to oil next week as economic news will be light. The talking heads and pros are telling you to take your chips off the table but they have been wrong all year. But there is risk, weekends are always a risk.
Earnings are still winding down from 4Q and year-end results so oil takes center stage once again. Today, black gold is up another $2 to $104 and appears it is going to push $105. If $110 comes into play next week, things could get shaky.
We are living in a fast-paced world so things could get ugly this weekend or the sun will shine early and peace will prevail in Libya. If that were to happen, oil would fall back to $90 and the market will zoom. If we stay in a trading range for another week that would be okay because we are expecting a huge breakout once the tensions ease in the Middle East.
Before we go we want to take a moment to talk about the Weekly Wrap publication which is gaining momentum and getting a lot of attention and coverage. We have hired a couple of powerful writers and they have nailed a number of great stocks since August. Our Covered Call portfolio for the Weekly Wrap is off to a sweet start. One stock we talk about is Spreadtrum Communications (SPRD, $22.89, up $1.27) which we profiled on February 6. Shares are currently up 6% but have traded to a high of $24.20 today.
Here were some of our thoughts a month ago:
“The company, based in Shanghai, China, is one of the leading designer and provider of baseband semiconductors and RF processor solutions for the wireless communications market. With wireless communications surging in China, the company is expected to do well. Sales predictions for smartphones and tables in 2011 are expected to increase by 22% and 262%, respectively, according to one study. Basebands allow cell phones to send massive amounts of data at high speeds from the phone to the cell tower.” (END)
We included some charts and graphs and had this to say about the stock:
“The graphs and the year-over-year chart seem to predict that they will even meet or beat analysts’ inflated earnings expectations. The quarter-over-quarter chart draws a little concern.
With earnings 25 days away, using their slope and expected earnings meet, we would say shares still have more room to run and could hit $30 over the next six months.” (END)
The company reported earnings today which beat expectations.
We are on track to make 7% in a month if this stock is “called away” from us but we hope we can continue to write calls on it. Our Weekly Wrap finds stocks that are undervalued, or “cheap”, or ones that have momentum and is designed for investors who like a little safety when playing options. Folks, 7% might not sound like much in a month but if you earn 7%-8% a month for a year, you will do extremely well.
We also want to point out this would have been a GREAT earnings trade for those of you who have purchased our option trading course, How to Trade Options on Momentum Stocks. We have done numerous videos on how to do an “earnings option trade” and these types of plays can make you 100% or more in a day…if you a right.
In our trading manual and videos, we show you how to research these types of trades and how to find them. We also show you how to do the math and figure out how much you can make or lose on a trade.
Based on our Weekly Wrap information, you could have bought the Spreadtrum Communications March 24 calls (SPRD110319C00024000, $0.60, flat) yesterday for 60 cents and sold them at the open this morning for $1.20. These are risky strategies of course because you really have to be quick with your trading but you also could have gone out to the April options. There may still be a trade there and it is one we will examine over the weekend for our current subscribers.
We bring this all up because we have a lot of new subscribers and we really want you to have a copy of our option trading manual and access to our ongoing, monthly videos. The option course is priced at $599 but will be included with any 1-year subscription you purchase and is shipped at no charge directly to your doorstep.
We have the cheapest and easiest to understand option trading course on the internet and it is getting rave reviews. It is helping people find their own triple-digit trades and the proof is in the pudding (and our Track Records).
We do not advertize this deal but we continue to get requests for it. We have just printed a fresh batch of copies for the course which includes our Momentum Stocks Watch List. This manual covers dozens of sectors and profiles over 600 companies and what moves these stocks.
Both are great values and we hope you take us up on our offer.
We will be back Sunday night but we still feel we are going to get one more big push to the upside as long as support holds. The final hour of trading should be exciting!