Futures were flat as a pancake when we were doing our late night homework while watching the overseas markets open for trading. Of course, we tossed and turned and caught a quick nap as we prepared for this morning’s Nonfarm Payrolls report. With so much talk of Fed tapering over the past few weeks, today’s report was viewed as a major catalyst in developing the next trend.
We have talked about how Fed tapering would actually be a good thing because it would allow the market to trade on its own. While the cliché may be “don’t fight the Fed” on Wall Street, it is important to remember no government has ever printed its was out a recession and it remains to be seen if Bernanke knows what he is doing. Time always tells.
The Nonfarm Payrolls came in at 175,000 while the Unemployment Rate moved up a tick to 7.6%. It was the perfect number for the bulls to rebound but we have been mentioning the current trading range and if current levels hold the bulls will win the week.
We were given great clues from the S&P Volatility Index ($VIX, 1, down x) and the 50-day Moving Averages this week and we talked about how the bulls have held these levels two other times this year. We have been able to navigate the volatility with great success since late April as we are now 19-3 with our option recommendations. We have closed 8 triple-digit winners with gains of up to 300% and we have a few open positions that are also approaching triple-digit returns. Here is a snapshot of the closed trades we have recommended:
It will be important to respect the current trading range and any new trades should be short in nature until we get the next breakout or breakdown. This will also help keep your emotions in check and patience will be key. We are wrapping up the few remaining trades we have and we will be in a GREAT position to deploy new capital once we get the signals.
We will be back Sunday night with the charts and please make sure you study them. We will also try to do a video to help show you the different ways you can play index options to take advantage of the market’s moves.
The Dow is up 167 points to 15,211 while the S&P 500 is higher by 16 points to 1,638. The Nasdaq is advancing 33 points to 3,457. If the bulls can clear Dow 15,300; S&P 1,650; and Nasdaq 3,575, they could test the all-time highs again. However, if there is a slow fade into the close it could spell trouble ahead.
As we head to press, the head zombie is on the tube talking about the Affordable Care Act. The costs right now to insure a family of 4 is pushing over $1,500 if you have to get healthcare for you family and you have a small business. It’s insane. We won’t get on our soapbox today on this subject but it will be interesting to see how the market reacts.
We have some last minute updates for our current trades and we will be watching them into the close. If we take action, we will send out a Trade Alert. Otherwise, we will be back Sunday night with the Weekly Wrap (now 22-1 for the year for winning trades!) and the Daily on Monday morning. Until then, have great weekend everyone!