We finally got the selling we wanted on Thursday, helping us to fill the rest of our spreads. It has been a truly challenging two weeks for our new trade alerts. The Market has refused to fall, making it impossible for us to get filled in our new put spreads. However, that turned around on Thursday as the Market fell hard on the final trading day of 2009. This helped us get filled in all of our new trade alerts heading into the New Year.

The initial claims number released before Thursday's opening bell was very optimistic news for the Market. The actual number came in much better than the Street was expecting when the government said that new jobless claims fell by 22,000 last week. This brought the seasonally adjusted number down to 432,000 for the week ending December 26. Ahead of the report, consensus was calling for 460,000 new claims. The chart below shows how drastic the decline has been since topping out nine months ago at 674,000.

Graphic from Briefing.com

It was a fairly flat session for crude on Thursday as it settled up $0.05 at $79.36 a barrel on the New York Mercantile Exchange. However, it did lock in its largest percentage gain since 1999 with its 77.94% move last year. Gold also moved up on the session when it rose $3.70 an ounce to settle at $1,095.20. This pushed the shiny metal to its largest yearly gain since 2007 with its advance of 23.95% for 2009.

Thursday's Economic Reports

It was sort of an ugly finish to the bullish year on Friday when the Dow Jones Industrial Average lost 120 points to finish the year at 10,428 points. While it was red on Friday, it was definitely all green for 2009 with the large-cap index climbing 18.82% on the year. This was its largest percentage gain since 2003. On the daily chart, the Dow pulled back to its 20-day moving average (light blue line) on the chart.

The S&P 500 also struggled on the final trading session of the year. It fell 11.32 points on Thursday to finish the year at 1,115. Despite its ugly finish, the index still locked in a 23.45% gain for 2009 and its best yearly performance in over six years. On the daily chart, the S&P 500 is sitting a little higher than the Dow, above its 20-day moving average (light blue line), but certainly did turn over on Thursday. Let's see if it's able to hold above this moving average on Monday and Tuesday.

The Nasdaq Composite slid 22 points on Thursday, but still had an outstanding year. It was definitely the year to be in tech stocks with the Nasdaq climbing over 43% in 2009. Its closing price of 2,269 on Thursday meant that last year was the Nasdaq's best one year performance since the same index gained 50% in 2003.

The selling on the final trading day of the year was good news for the VIX (CBOE VOLATILITY INDEX). The "fear index" rose 1.72 points to finish the year at 21.68. This was the most significant move we've seen out of the index in the past two weeks. It also took the VIX back above its 20-day moving average (light blue line) on the chart. The big test for the index will be if it's able to make it up to its 50-day moving average (red line).

It took a full week, but we finally got filled in all of our new trades. We've been looking for a round of selling this large for the past two weeks but had to wait until the final session before the New Year before we actually saw it show up. Traditionally, we see some selling towards the end of the year as investors dump underperforming stocks for tax reasons. Perhaps it's because of the strong gains during the past year that we didn't see this really play out this time around. In the past, we also usually get a nice bump during the first couple of trading days in the New Year as investors then put that money back to work by purchasing securities. We'll have to see if this plays out on Monday or Tuesday.

If this does happen, this should be perfect for our new put spreads. Now that we're filled, we would love nothing more than to see a nice move to the upside, extending our cushions. But even if we don't get this, we still like how we're sitting in all of our spreads heading into this week. Let's take a closer look at all of the positions.

PCLN 200-190 BULL PUT SPREAD (15 Contracts entered on 12/29/09)

PCLN CLOSED AT $218.41 Today (18.41 points away from our put spread)

Profit potential of $35.00 per contract

Contingent Stop Order set at $202.50

Priceline had a tough trading day on Thursday when it fell below its 20-day moving average (light blue line). The stock appeared to find some nice support from this line on Wednesday, but the selling on Thursday proved too much of a problem for PCLN. The stock finished the session near its low with a $5.20 loss. This took it down to $218.41 and ate into our huge cushion in this position. However, we're still sitting in very good shape heading into this week. Let's see if the stock is able to find some support and reverse last week's negative trend in the next few sessions.  

RUT 580-570 BULL PUT SPREAD (15 Contracts entered on 12/31/09)

RUT CLOSED AT $625.39 Today (45.39 points away from our put spread)

Profit potential of $40.00 per contract

Contingent Stop Order set at $585.00

The small-cap index finally ran out of steam on Thursday. After bumping up against resistance at its high for the year, the RUT rolled over. It finished the session down $8.02 at $625.39. This loss put the small-cap index into negative territory for the week at a minus 1.4% for the four sessions. But even with this loss, we like how we're sitting in our put spread. It might have been difficult getting into the spread, but we're sitting in really good shape heading into this week with our 45 points of breathing room in this one.

OEX 490-480 BULL PUT SPREAD (15 Contracts entered on 12/31/09)

OEX CLOSED AT $514.09 Today (24.09 points away from our put spread)

Profit potential of $35.00 per contract

Contingent Stop Order set at $492.50

The $520 mark was just too difficult for the OEX last week. After failing to break through this resistance barrier, the index turned south. After Thursday's loss of $4.82, the index settled at 514.09 points. The OEX finished the week just above its 20-day moving average (light blue line) at Thursday's close. This week, we'll be watching to see if it's able to stay above this mark. After this line, the next stop is probably its rising 50-day moving average (red line).

GOOG 580-570 BULL PUT SPREAD (15 Contracts entered on 12/31/09)

GOOG CLOSED AT $619.98 Today (39.98 points away from our put spread)

Profit potential of $35.00 per contract

Contingent Stop Order set at $582.50

Google certainly ran into some selling on Thursday, but was still able to hold up fairly well considering how the rest of the Market fared. The stock shed only $2.75 on Thursday to finish the week at $619.98. On the chart, it appears to be running into some resistance in the area of $625. Regardless, we appear to be sitting just fine in our put spread with the stock nearly 40 points above our "short" strike price. We should be able to just sit back and relax in this one for the time being.

As always, Trade Happy and Trade Smart