The Market takes flight with improving economy. The unemployment rate held steady while the number of jobs lost last month was much fewer than the Street was expecting. This followed the trend last week of better-than-expected economic data, which helped stocks push higher over the five trading sessions.

After the strong ADP report earlier in the week, we were looking for a fairly decent non-farm payrolls number on Friday and that's exactly what we got. The Labor Department announced that only 36,000 jobs were cut in the month of January. This was down from the 68,000 number that the Street was expecting. The strong report filled Friday morning with optimism.

Graphic from Briefing.com

Adding to the bullish sentiment Friday morning, the latest unemployment rate also surprised traders in its pre-Market release. The Labor Department announced that the rate held steady at 9.7% in February. This was better-than the 9.8% that analysts had predicted and the Street was expecting. With the job cuts declining and the unemployment rate holding steady, there were plenty of reasons to be bullish on an economic recovery in Friday's session. Of course, this means we definitely want to be on the "long" side of the Market.

Graphic from Briefing.com

The uplifting data on Friday helped oil move higher on the session. It rose another $1.44 on the day to finish the week at $81.65 a barrel on the New York Mercantile Exchange. Gold also climbed $2.10 on the day, closing at $1,135.20 a troy ounce.

Friday's Economic Reports

The Dow Jones Industrial Average surged on the session and the week. It jumped 122.06 points on Friday while locking in a 240.94 point gain for the week. This pushed the large-cap index right through a resistance level on the chart and has it headed towards the next one near its high for the year. We find it hard to believe that the Dow won't test this area in the upcoming week. Of course, there's always the unexpected that could throw a wrench in this plan, but for now it appears the bulls are in firm control.    

The S&P 500 also jumped right over the resistance level on the chart during Friday's 15 point advance. The index also managed to rise 34 points over the last five trading sessions and is poised to test its high for the year in the area of 1,150 points on the chart. Friday's closing price of 1,138 points put the index up 3.10% for the week and gave the S&P 500 its best weekly performance since last October. Let's see if it can continue surging into the new week.  

While the other two indices are still sitting well below their highs for the year, the Nasdaq Composite made it right up to this region on the chart during Friday's massive rally. The tech-laden index surged 34 points on Friday, taking the Nasdaq up to 2,326.35 points. This capped off an 88 point gain for the week and has the index sitting at its most significant resistance level in quite some time. If it can keep climbing this week, it should take the rest of the Market with it.    

The bottom continues to fall out of the VIX (CBOE VOLATILITY INDEX). It fell another 1.30 points on Friday, taking the index down to 17.42 points. If the Market continues to climb, we should see the VIX keep moving lower. Let's keep a close eye on the 17 point level because a drop through this level should mean another free-fall for the VIX.

What a week for the Market and what a week for our put spreads! We finally got the big move higher across the board along with the retracement in Google that we had been waiting for. With the Market firing on all pistons and the VIX dropping like a lead balloon, the premiums in our options should start to dissipate at a rapid pace.

We wanted to come back with another spread or two for Monday, but Friday's huge rally made us think twice about this plan. With the indices racing towards their highs for the year, we're afraid that we might get a little profit-taking at these levels. Due to this, we are apprehensive about coming in with some new put spreads at these levels. At the same time, we definitely don't want to be on the call side in case we're wrong and the indices break right through these resistance levels on the chart because then we're looking at some huge moves higher once again. This leaves us with quite a dilemma.

For now, we think the best action is to sit tight and see what unfolds at the beginning of the week. There still could be enough time left on Tuesday or Wednesday to bring in some decent credits, but after this, it's just not worth it. With this in mind, let's see what unfolds and if the opportunity is there we'll send out an alert. If not, let's protect our nice credit and coast to an easy profit for March.

RUT 560-550 BULL PUT SPREAD (15 contracts entered on 02/23)

RUT CLOSED AT $666.02 Today (106.02 points away from our put spread)

Profit potential of $50.00 per contract

Contingent Stop Order set at $565.00

Whenever the economy looks to be turning around, the small-caps are usually the first ones to react to the news. This was the case last week with the RUT surging 13.55 points on Friday, taking the index up to 666.02 points at the close. This gives us a massive cushion in our put spread heading into the final two weeks of the March cycle. We should be able to put this one on ice over the next two weeks.

PCLN 200-190 BULL PUT SPREAD (15 contracts entered on 02/22)

PCLN CLOSED AT $235.34 Today (35.34 points away from our put spread)

Profit potential of $50.00 per contract

Contingent Stop Order set at $202.50

Priceline wasn't able to enjoy the huge gains that we saw everywhere else on Friday, but the stock is coming off a huge rally from Monday that was more than enough for us. Regardless of its lackluster performance on Friday, the stock still gained 2.22 points on the day. This left the stock 35 points above our "short" strike price at $235.34. The stock had been hurt late in the week by its announcement of new convertible debt, but this shouldn't weigh down the company too much. For now, we should be able to sit back and relax in this one as well.  

GOOG 490-480 BULL PUT SPREAD (15 contracts entered on 02/23)

GOOG CLOSED AT $564.21 Today (74.21 points away from our put spread)

Profit potential of $45.00 per contract

Contingent Stop Order set at $492.50

Google finally awoke last week, which was excellent news for our put spread. The stock posted huge gains on the week, climbing 9.62 points on Friday alone. This left the stock at $564.21 at the close and gave us nearly a 75 points cushion in our put spread. What a week it was in this position. Let's watch to see if the stock is able to break above its 50-day moving average (green line) on the chart this week. If so, it could be another big move higher for GOOG.

As always, Trade Happy and Trade Smart