Spread Update Stocks rose in a late rally on Friday as a strong forecast from a chip maker lifted tech shares and helped alleviate concerns about the economy's health after an unexpected drop in retail sales.

  Small caps, considered riskier because of their higher volatility and lower cash reserves, climbed higher than their larger counterparts on hopes that chip demand will spur technology gains propelled the smaller stocks.

The Russell 2000 index of small-capitalization stocks gained 9.21 points, or 1.44%, to 649.00. After ceding its year-to-date gains on Monday for the first time since Feb. 23, the index regained its yearly gain midweek. By the close of trading Friday on Friday, the measure was up 2.37% for the week .

National Semiconductor Corp rose 5 percent to $14.21 a day after it forecast margins and revenues above estimates after a horrible 2009. The Philadelphia Semiconductor index rose 1.4 percent.

  "The macro news has been increasingly negative, but you still have some companies reporting good forecasts, and people start to think (selling) got a bit overdone," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com in Shrewsbury, New Jersey.

  "National Semiconductor made a positive announcement. That's why you're seeing the strength primarily in tech," he said.

  Even so, the volume was lackluster, indicating little conviction that the advance will continue next week.

  The Dow Jones industrial average gained 38.54 points, or 0.38 percent, to 10,211.07. The Standard & Poor's 500 Index rose 4.76 points, or 0.44 percent, to 1,091.60. The Nasdaq Composite Index  climbed 24.89 points, or 1.12 percent, to 2,243.60.

  For the week, the Dow rose 2.8 percent, the S&P gained 2.5 percent and the Nasdaq advanced 1.1 percent.

  COLD DAY FOR RETAILERS

  U.S. retailers' sales unexpectedly fell in May for the first time in eight months, the U.S. Commerce Department reported.

  But a jump in a consumer sentiment index to a near 2-1/2-year high in a preliminary reading for June tempered fears of a slowing economic recovery. The consumer sentiment reading came from the Thomson Reuters/University of Michigan Surveys of Consumers.

  Consumer-related shares were the hardest hit, with Home Depot down 1.5 percent at $32.22, and Procter & Gamble, down 1.5 percent at $61.01, weighing down the Dow industrials. The S&P retail index slid 0.2 percent.

  But commodity-related companies also gave support to stocks, with the S&P materials sector up 1.2 percent.

  U.S. Steel Corp jumped 3.8 percent to $44.82.

  VIX FALLS

  In another bullish sign, the S&P 500 found technical support around the 1,077 level that marks its 14-day simple moving average. The benchmark posted its first back-to-back close above its 14-day SMA since late April.

  The CBOE Volatility Index, a gauge of investor anxiety, fell 5.8 percent to settle at 28.79, its lowest level since May 13.

  Big-cap pharmaceutical companies' shares also advanced after Barclays Capital upgraded the sector to "positive" from "neutral," citing the revenue potential of new products. Pfizer Inc was the Dow's top percentage gainer, up 3.7 percent at $15.46.

  U.S.-listed shares of BP Plc  climbed 3.6 percent to $33.97 as UK officials made supportive comments about the company, even as scientists doubled estimates of the Gulf of Mexico's oil spill. About 7.31 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, the lowest in more than two months and sharply below last year's estimated daily average of 9.65 billion.

  Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 11 to 4, while on the Nasdaq, about five stocks rose for every two that fell.

  That’s the news rap for this weekend: The market gave us what we’ve been looking for with these two up days we’ve seen. Has anything changed to cause this up turn? Europe doesn’t seem to have improved their situation, and over the weekend, Japan has been added to the debt mess too, with the speech that their Prime Minister gave.   BP with their gulf mess is still making headlines with talk of this lasting 2 to 3 more weeks. There have been words spoken from the British government that they will back BP through this mess, though Britain is also on the list of European governments having problems with their debt load. So what are we looking at? We think we’re looking at a relief rally and some bottom fishing. Whatever we want to call it, it couldn’t have come at a better time for our spreads. Well, we may have found a bottom here, but as with all things to do with the market, it could change in a heartbeat. Our spreads have now added to their cushions, and it looks like we can just sit back and relax to the finish line this cycle. We will be looking for July spreads next week, so keep your eyes open for when they come. So let’s take a look at our spreads. JUNE POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS		CREDIT		CLOSE
RUT	Bull Put	500 - 510		15		.60
CME	Bull Put	240 - 250		15		.50
RUT	Bull Put	520 - 530		15		.40
MNX	Bull Put	150 - 160		15		.35
OEX	Bull Put	410 - 420		15		.35
CME	Bull Put	250 – 260		15		.35

PROFIT OF

$ 2175.00

1. RUT 500 – 510 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $649.00 Today ( 139.00  points away from our put spread) Profit potential of $60.00 per contract Contingent Stop Order set at $515.00 2. RUT 530 – 520   BULL PUT SPREAD (15 contracts) RUT CLOSED AT $649.00 Today ( 119.00 points away from our put spread) Profit potential of $40.00 per contract Contingent Stop Order set at $535.00 The RUT broke through 640 going the other way over the last two trading days, which his put us in a great spot to just sit back and relax on this one with only 4 trading days left. With the big drop in May, the RUT is setting up to make us some money over the summer months. 1. CME 240 – 250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $302.45 Today ( 52.45  points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $255.00 2. CME 260-250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $302.45 Today ( 42.45  points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $265.00 CME had a big move on Thursday so the small loss on Friday doesn’t amount to much. With 5 days left we think we can coast out on this one also. MNX 160 – 150  BULL PUT SPREAD (15 contracts)  MNX CLOSED AT $184.72 Today ( 24.72 points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $162.50 The MNX has traded much like the RUT and has left us with another money maker going forward. So we can relax with this one also going into the last 4 days of this cycle. OEX 420 – 410  BULL PUT SPREAD (15 contracts) OEX CLOSED AT $493.02 Today (73.02 points away from our put spread) Profit potential of $.35.00 per contract Contingent Stop Order set at $415.00 The OEX also looks to be letting us breathe this cycle. We can see it easily move into the 510 range from here. Again, we only have 4 days left here also.  We have started looking into July for prices to setup our spreads, so keep your eyes open for them coming. NDX 1300 – 1325  BULL PUT SPREAD (10 contracts) NDX CLOSED AT $1847.15 Today ( 522.15 points away from our put spread) Profit potential of $80.00 per contract Contingent Stop Order set at $1335.00 The NDX  spread can coast out the rest of this cycle also with only 4 days left as it moves back over 1800 and strong support. As Always – Trade Happy, Trade Smart.

  Spread Update

Investors sent stocks up Monday after getting a boost of confidence from the latest economic reports and Warren Buffett's defense of Goldman Sachs. Giving Goldman a much needed break, from the government beating its been taking.

The Dow Jones industrial average rose 143 points for its biggest gain in two and a half months. The Dow and broader indexes all climbed more than 1 percent. The market rebounded from a drop Friday after a string of welcome news eased some of the concerns that have been dogging investors. Economic reports signaled that consumer spending and manufacturing are strengthening.

An agreement by United Airlines to acquire Continental Airlines Inc. in a stock deal worth about $3 billion also lifted stock prices. Investors see corporate deal making as a positive sign for the economy.

"The merger in the airlines is great. As you begin to see mergers that means there is value out there," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group.

Traders funneled money to retail and restaurant stocks after the Commerce Department said that personal spending rose 0.6 percent in March, the biggest increase in five months. However, personal income rose just 0.3 percent. The reports were in line with analysts' expectations but showed that consumers were pulling money from savings to make purchases.

Manufacturing continued to show broad improvement. Orders have been flowing to factories for months while companies rebuild depleted inventories. The Institute for Supply Management said that U.S. manufacturing activity expanded last month at the fastest pace in nearly six years. The trade group's manufacturing index rose to 60.4 in April from 59.6 in March. Economists expected a reading of 60.

The market has swung over the past week on investor indecision about the risks that face the economy. Economic numbers and concern about government debt loads in Europe are making traders quick to jump in and out of stocks. The Dow has risen or fallen by more than 100 points in four of the past six days. Stocks bounced higher after a disappointing end to April. The market had tumbled Friday following mixed economic reports and concerns about a possible criminal investigation of Goldman Sachs. The government reported the nation's economy grew at a slower pace in the first quarter than had been forecast and a report on consumer sentiment showed a drop in confidence in April.

The Dow rose 143.22, or 1.3 percent, to 11,151.83, its biggest point and percentage gain since Feb. 16. It was the fourth largest increase of the year. The broader Standard & Poor's 500 index rose 15.57, or 1.3 percent, to 1,202.26, and the Nasdaq composite index rose 37.55, or 1.5 percent, to 2,498.74. Bond prices fell after demand for safety holdings eased. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.66 percent late Friday.

The dollar rose, while gold climbed. Crude oil rose 4 cents to $86.19 per barrel on the New York Mercantile Exchange. Traders watched developments of the Gulf oil spill. There are concerns that the fallout from the April 20 accident could disrupt supplies and refining capacity. That would drive the price of oil higher and could hurt the economy. European markets were volatile after the European Union and the International Monetary Fund agreed to provide Greece with $145 billion over the next three years to help it with its ongoing debt problems. European shares fell but closed higher after U.S. stocks rose.

Some investors are still skittish about Greece's ability to get its debt problems under control and the potential for other European nations to face similar issues. The euro fell against the dollar.

Shares of Goldman Sachs rose $4.30, or 3 percent, to $149.50 after Buffett said over the weekend that he doesn't think the investment bank committed fraud. The SEC has accused the company of fraud in a deal involving mortgage securities deals it set up. Goldman has denied wrongdoing.

We have 2 big reports coming out this week all revolving around jobs on Thursday and Friday both will be market movers so we’ll be keeping are eyes on them. We also have earnings coming out though most of the big hitters have reported. Today's Economic Reports

Date	ET	Release	For	Actual	Consensus	Prior	Revised From
May 6	8:30	Initial Claims	05/01		435k	448k
May 7	8:30	Nonfarm Payrolls	Apr

MAY POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50
RUT	Bull Put	630-620		15	.45
NDX	Bull Put	1775-1750		15	.60
SOX	Bull Put	330-320		15	.45
AAPL	Bull Put	230-220		15	.35
RUT	Bull Put	680-670		15	.50

POTENTIAL PROFIT OF

$   3,975.00

NDX 1775-1750 BULL PUT SPREAD (10 contracts) NDX CLOSED AT $2031.60 Today (251.60 points away from our put spread) Profit potential of $60.00 per contract Contingent Stop Order set at $1785.00

The NDX moved higher with the rest of the market today, we're still sitting in great shape.. This leaves us with a huge 250 point cushion heading into the end of the week. Although this one can move fast, we still feel very confident about how we're sitting in this one.   SOX 330-320 BULL PUT SPREAD (15 contracts) SOX CLOSED AT $385.97 Today (56.63 points away from our put spread) Profit potential of $45.00 per contract Contingent Stop Order set at $332.50

. The SOX also moved higher today to makeup for the cushion we lost over last weeks drop OEX 500-490 BULL PUT SPREAD (15 contracts) OEX CLOSED AT $547.05 Today (47.05 points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $502.50

We had a great day with OEX as it moved with banking stocks higher, Goldman Sachs moved higher on Warren Buffet’s statements made earlier today. With close to a 50 point cushion we’ll sit back and watch as we make money on this one RUT 630-620 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $722.39 Today (92.39 points away from our put spread) Profit potential of $45.00 per contract Contingent Stop Order set at $635.00 RUT 680-670 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $732.82 Today (52.82 points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $685.00

As we move into this week RUT also moved higher which makes both are spreads in the RUT sitting well going into this week. We have over 53 points of breathing room in our newest spread and 102 points in the other. Let's just sit back and see if we can get a nice recovery heading into the weekend. AAPL 230-220 BULL PUT SPREAD (15 contracts) AAPL CLOSED AT $266.35 Today (36.35 points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $232.50

It certainly has been a wild ride for Apple continues for the start of this week it has moved in a positive direction adding to a cushion, we're still sitting in good shape in this put spread for now.

We are missing are charts today as we learn how this new system works we will be adding them as are learning curve continues to rise Thank you As always, Trade Happy and Trade Smart

Traders look past problems in Europe as stocks head higher. After a bumpy start to the trading week, stocks rebounded this afternoon after the Fed vowed to keep interest rates in check for an extended time. With the thought of a rate increase in the near future now wiped away, the bulls came back to the Market this afternoon, taking stocks higher at the closing bell.    

 

With three bumpy sessions now under our belt, we thought it would be a good idea to take a look at the weekly chart of the Dow Jones Industrial Average. After finishing last week back above its 200-week moving average (pink line) on the chart, we thought it would be another big move to the upside this week. But yesterday's wicked selling took the index back below this moving average on the weekly chart. Let's see if the Dow can make it back above this line by the time trading is done on Friday. If not, we could be looking for an extended pull-back in the near-term.

 

 

The S&P 500 has certainly lagged the Dow on the weekly chart in regard to trading below its 200-week moving average (pink line). It appears that the index has pulled up just below this moving average in the area of 1,220 points. The index has given us a fairly wide trading range so far this week with its low sitting around the support from 1,180 points on the chart. Let's keep a close eye on this support level the rest of the week to see if the S&P 500 can remain above it heading into the weekend. A break below this line could take the index back down to its 20-week moving average (light blue line) on the chart.

 

 

The Nasdaq Composite has also erased all of last week's gain in just three trading days this week. The index appears to have found a little support from the 2,450 point level on the chart, but we'll have to wait to see if this is just temporary or something that's fairly solid. After this level, the next support could come from its rising 20-week moving average, very similar to the S&P 500. Let's watch to see how the index handles these support levels the rest of the week.    

 

 

We made it through the first three days of the economic calendar with very little taking place. Tomorrow, things do pick up slightly with the initial claims number coming out. The Street is looking for a slight drop in claims for new unemployment benefits. While that's the only data point on Thursday, we do have the GDP, Chicago PMI and University of Michigan Consumer Sentiment Index all coming out on Friday. With the earnings calendar taking a breather on Friday, these reports could really give the Market a boost or drag it lower. Let's keep a close eye on expectations heading into Friday's session because how the actual data compares to consensus will drive the trading.

Economic Calendar for This Week

 

Date	ET	Release	For	Consensus	Prior	Revised From
Apr 29	08:30	Continuing Claims	04/17	4625K	4646K
Apr 29	08:30	Initial Claims	04/24	440K	456K
Apr 30	08:30	GDP-Adv.	Q1	3.2%	5.6%
Apr 30	08:30	Chain Deflator-Adv.	Q1	0.9%	0.5%
Apr 30	08:30	Employment Cost Index	Q1	0.5%	0.5%
Apr 30	09:45	Chicago PMI	Apr	59.8	58.8
Apr 30	09:55	Michigan Sentiment	Apr	71.5	69.5

 

The Indices Recap doesn't even come close to showing all the movement in today's session. It was a session that was full of twists and turns and was fitting that we saw plenty of red and green right up until the closing bell. However, the good news is that there was some buying taking place right before the closing bell rang. Let's see if this amounts to anything tomorrow morning.     

 

Indices Recap                                                                                                                                                 

Indices	10:00	11:00	12:00	13:00	14:00	15:00	Close	Level
Dow Jones	+18.36	+31.74	+26.37	+48.82	+50.78	+65.14	+53.28	11045.27
Dow Transports	+10.10	+13.40	+2.91	+19.42	+24.45	+32.09	+20.15	4657.75
Dow Utilities	+1.16	+3.37	+3.03	+3.88	+2.61	+4.70	+4.21	384.35
Nasdaq	+2.64	-4.40	-6.48	-2.03	-0.57	+4.52	+0.26	2471.73
S&P 500	+4.63	+5.24	+4.02	+6.83	+7.09	+9.43	+7.65	1191.36
S&P 500 Premium	0.52	4.75	5.72	4.54	3.60	5.64	0.76	---
Russell 2000	+2.93	+1.25	+0.20	+1.68	+1.57	+3.80	+1.12	722.39
OEX	+1.88	+2.29	+2.16	+3.65	+3.71	+4.68	+3.92	542.05
SOX	+2.87	-1.62	-1.01	-0.19	+0.33	+2.50	+1.85	388.63
CRB Index	+0.06	+1.02	+0.21	+0.87	+0.35	+1.33	+1.33	274.51
10-Year Note	-10/32	-12/32	-11/32	-14/32	-16/32	-20/32	-19/32	3.765
JPY/USD	93.92	94.02	94.09	94.07	94.16	94.29	94.12	---
USD/EUR	1.3195	1.3208	1.314	1.3162	1.3158	1.3187	1.3214	---
Cash Gold	1161.70	1168.10	1173.10	1171.80	1171.30	1171.30	1171.30	---

 

The Market Internals didn't look too bad at the close on Wednesday. This is especially true if we think about all of the red that was showing up on our charts with just 30 minutes left in the trading day. Although there weren't huge advantages for the bulls in these ratios, we'll take anything that's positive after the session we witnessed yesterday.       

 

ISSUES	NYSE	NASDAQ
Advancing	1,809	1,412
Declining	1,222	1,284
Unchanged	129	99
Totals	3,160	2,795

 

Unfortunately, the 52-week highs-versus-new-lows finally started coming back down to earth this week. The huge selling we saw on Tuesday took a majority of the issues well off their highs for the year. It was only the bumps from earnings today that helped some issues hit new highs for the year. Unless we get a huge rally at the end of the week, we expect these numbers to continue falling.

 

ISSUES AT	NYSE	NASDAQ
New 52 Week High	96	100
New 52 Week Low	14	11

 

We added an additional RUT spread this week, but had the notion of adding another Pro spread in tonight's newsletter. But with the uneasiness in Europe, we are leaning towards letting our current spreads ride out the rest of the cycle without adding any new risk to our portfolio at this time. Of course, the earnings season doesn't do us any favors by taking several good spreads off the table due to the release dates. Whenever we get months like this, we like to stay mainly in the index spreads and avoid the unneeded risk that's involved in equities. Currently we have nearly a $4,000 profit potential working on our side, which wouldn't be a bad performance if we can make it to the finish line with all of our spreads still intact. For now, let's take a look at each of them in a little bit of detail as we head into the final two sessions of the week.

 

MAY POSITIONS

 

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50
RUT	Bull Put	630-620		15	.45
NDX	Bull Put	1775-1750		15	.60
SOX	Bull Put	330-320		15	.45
AAPL	Bull Put	230-220		15	.35
RUT	Bull Put	680-670		15	.50

POTENTIAL PROFIT OF

$   3,975.00

 

NDX 1775-1750 BULL PUT SPREAD (10 contracts)

NDX CLOSED AT $2,007.59 Today (232.59 points away from our put spread)

Profit potential of $60.00 per contract

Contingent Stop Order set at $1785.00

The NDX gave back a large chunk of our cushion in this spread, but we're still sitting in great shape. After hitting a new high for the year on Monday, the index started heading south. Yesterday, the NDX dropped to its 50-day moving average (red line) and then today it fell below that line. The good news is that it was able to climb at the end of the day and finish back above this moving average with its 1.34 point advance. This leaves us with a huge 232 point cushion heading into the end of the week. Although this one can move fast, we still feel very confident about how we're sitting in this one.  

 

 

SOX 330-320 BULL PUT SPREAD (15 contracts)

SOX CLOSED AT $388.63 Today (58.63 points away from our put spread)

Profit potential of $45.00 per contract

Contingent Stop Order set at $332.50

The chart for the semiconductor index looks a lot like the rest of our spreads. The SOX was hit with a ton of selling on Tuesday and then looked as if it was going to continue falling today. But a nice rebound in the index helped the SOX close well above its 50-day moving average (red line) when it finished the session up 1.85 points at $388.63. While our breathing room isn't quite as good as it was Sunday night, we're still sitting just fine in this spread as we head into the final two sessions of April. Let's keep a close eye on its action the rest of the week, but let's not get worried until we see if this thing shows prolonged weakness.    

 

 

As always, Trade Happy and Trade Smart 

 

 

 

 

 

 

 

 

 

The Market just keeps charging higher. With the economic data and earnings both giving traders the green light, nothing seems to be able to hold this Market down. While this has been the case over the last couple of option cycles, the difference now is that we're getting some volatility mixed in with the moves higher. This has allowed us to get filled in our put spreads without having to chase the positions higher. We're hoping for a continuation of this trend in the new week, but first let's take a look at how the last five sessions have turned out on the weekly charts.   

 

We have been watching the Dow Jones Industrial Average's 200-week moving average (pink line) for the last two weeks and the index finally broke above it and held last week. The large-cap index started last week at 11,108 points and then rose 185 points over the five trading days to finish the week above that moving average with its closing price of 11,204 on Friday afternoon. This pushes the Dow's year-to-date gain up to 7.4% and gives the index some more room to run on the chart now that it's broken through that resistance barrier. Let's see if this run to the upside continues in the upcoming week.

 

 

The S&P 500 led the way higher on the weekly chart. The index started out last Monday at 1,192 points and then rose 25.15 points over the five days. It finished the week up 2.1% at 1,217 points. This increases its gain for 2010 up to 9.2%. But unlike the Dow, the S&P 500 remains below its 200-week moving average (pink line) on the chart. Let's see if this provides some resistance for the S&P 500 this upcoming week. If not, it could be another strong five-day stretch for the index.       

 

 

The Nasdaq Composite trailed the S&P 500 last week, but still turned in a very good performance. The tech-laden index began the five days at 2,481 points and then rose 48 points during the week to finish on Friday at 2,530 points. This amounted to a 2.0% rise during the week and pushed the Nasdaq's year-to-date gain up to 11.5%. On the weekly chart, the next troublesome area for the Nasdaq looks to be around the 2,550 point area. This was resistance in the past and might slowdown the index on its way back up the chart. Let's see if this happens during the next five trading days.   

We've had some light economic calendars as of late and this trend will continue into the new week. Of course, we're still in the thick of earnings season and that news will continue to dominate the trading this week. However, we'll still have a few data points on Tuesday with the Case-Shiller coming out, as well as, the consumer confidence number. Then we get the most important data of the week in the FOMC rate decision on Wednesday afternoon. While everyone expects the federal funds rate to stay at the historic low, the policy statement will be closely dissected for any changes in wording or forecasting. As always, it's likely to be one wild ride Wednesday afternoon. We'll get to the remaining economic reports in the next newsletter.

Economic Calendar for This Week

 

Date	ET	Release	For	Consensus	Prior	Revised From
Apr 27	09:00	Case-Shiller 20-city Index (y/y)	Feb	1.1%	-0.7%
Apr 27	10:00	Consumer Confidence	Apr	53.7	52.5
Apr 28	10:30	Crude Inventories	04/24	NA	1.89M
Apr 28	14:15	FOMC Rate Decision	4/28	0.25%	0.25%
Apr 29	08:30	Continuing Claims	04/17	4625K	4646K
Apr 29	08:30	Initial Claims	04/24	440K	456K
Apr 30	08:30	GDP-Adv.	Q1	3.2%	5.6%
Apr 30	08:30	Chain Deflator-Adv.	Q1	0.9%	0.5%
Apr 30	08:30	Employment Cost Index	Q1	0.5%	0.5%
Apr 30	09:45	Chicago PMI	Apr	59.8	58.8
Apr 30	09:55	Mich Sentiment	Apr	71.5	69.5

 

The Indices Recap showed some indecision for a good part of the session on Friday, but a strong rally late in the trading day helped most of the indices finish the week at their highs. This is always a very positive sign heading into the new week. Let's see if this bull-run can continue into Monday's open.    

 

Indices Recap                                                                                                                                                 

Indices	10:00	11:00	12:00	13:00	14:00	15:00	Close	Level
Dow Jones	+30.23	+6.05	+0.53	+24.64	+28.27	+43.53	+69.99	11204.28
Dow Transports	+18.98	+12.78	+5.92	+27.23	+16.80	+30.25	+44.76	4751.33
Dow Utilities	-1.26	+0.34	-0.25	+0.41	+1.30	+2.15	+3.64	388.52
Nasdaq	+3.65	-7.16	-6.11	-0.60	-0.42	+6.90	+11.08	2530.15
S&P 500	+2.33	-0.76	-1.04	+2.37	+3.27	+6.07	+8.61	1217.28
S&P 500 Premium	8.16	2.41	3.33	5.54	4.13	-2.43	-1.19	---
Russell 2000	+1.62	-0.12	+0.85	+3.61	+3.67	+5.33	+7.61	741.92
OEX	+1.23	-0.45	-0.74	+0.84	+0.90	+2.30	+3.30	552.66
SOX	+0.01	-4.15	-2.78	-0.90	-1.25	+0.90	+1.48	400.42
CRB Index	+0.37	+0.94	+0.79	+1.12	+1.82	+1.93	+1.93	279.05
10-Year Note	-11/32	-14/32	-9/32	-14/32	-12/32	-10/32	-10/32	3.81
JPY/USD	94.26	94.26	94.17	94.0	94.11	94.04	93.96	---
USD/EUR	1.3307	1.3356	1.3363	1.3365	1.3381	1.3378	1.3372	---
Cash Gold	1140.00	1153.60	1154.10	1154.10	1153.10	1153.10	1153.10	---

 

The Market Internals certainly matched the strong buying that we witnessed at the end of the session on Friday. Both the NYSE and Nasdaq showed a very big edge in favor of the advancing issues.      

 

ISSUES	NYSE	NASDAQ
Advancing	2,185	1,717
Declining	886	1,004
Unchanged	132	117
Totals	3,203	2,838

 

The 52-week highs-versus-new-lows continue to give us a massive number of issues hitting new highs for the year. But with the indexes marking new territory on the charts, we definitely expected to see this showing up from the stocks as well. Let's see if this trend can continue into the new week.  

 

ISSUES AT	NYSE	NASDAQ
New 52 Week High	634	363
New 52 Week Low	12	7

 

We got an early jump on the new spreads this cycle due to all the problems we have been having with getting filled during the last two option cycles. This month it's been quite the opposite with our new spreads getting filled with relative ease. Things always seem to work in trends and we hope this one continues for a while longer.

 

For tomorrow, we're going to add the extra layer in the RUT just like the Regular Members. We think this is a great way to pick up more premiums while trading our favorite index. As long as the optimism over an improving economy persists, the small-caps are going to lead the way higher. Let's take advantage of this upside momentum by picking up some extra credits this cycle.

 

NEW TRADE ALERT (1)

 

Please Note: This is a Day Order and Limit Order.

 

RUSSELL 2000 INDEX (RUT)

OPENING 680-670 MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 680 strike price

Buy 15 May Puts at 670strike price

Total Credit 0.50 per contract

Potential Profit $750.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $685.00.

 

MAY POSITIONS

 

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50
RUT	Bull Put	630-620		15	.45
NDX	Bull Put	1775-1750		15	.60
SOX	Bull Put	330-320		15	.45
AAPL	Bull Put	230-220		15	.35

POTENTIAL PROFIT OF

$   3,225.00

 

NDX 1775-1750 BULL PUT SPREAD (10 contracts)

NDX CLOSED AT $2,055.33 Today (280.33 points away from our put spread)

Profit potential of $60.00 per contract

Contingent Stop Order set at $1785.00

The NDX is once again shaping up nicely for us this month. Just like every other month in this put spread, we entered the position and the index has taken off like a rocket. We now have a massive amount of breathing room in this position and an index with plenty of bullish momentum. Let's just sit back and relax in this one for the time being.

 

 

SOX 330-320 BULL PUT SPREAD (15 contracts)

SOX CLOSED AT $400.42 Today (70.42 points away from our put spread)

Profit potential of $45.00 per contract

Contingent Stop Order set at $332.50

The interesting thing about this index is that we get huge amounts of volatility, but we always seem to be able to ride out any bumps by placing our strike prices so far out of the money. Of course, that volatility is what gives us the premiums in our put spreads month after month. The earnings season has been fairly good for the semiconductors, which is great for this put spread. On Friday, the SOX moved up $1.48 and it is now sitting just below its resistance level on the chart with a closing price of $400.42. One more strong session from the SOX should take the index right through that resistance from the intraday high a week ago.

 

As always, Trade Happy and Trade Smart

After a wild start to the week, the Market moves higher. This was especially true on Monday afternoon and all day Tuesday. Today's session was a little bit calmer and fairly uneventful. The sideways action played out for most of the day, which might be setting up some good entries for our new trade alerts on Thursday. We'll get to the new trades in a little bit, first, let's take a look at how things are shaping up on the weekly charts with three trading days now under our belts.  

 

After running into quite a bit of selling mid-day on Monday, the rest of the week has been straight up for the Dow Jones Industrial Average. The large-cap index did struggle late in the session today, but was still able to finish the session up 7.86 points at 11,124.92. This once again pushes the index up to its 200-week moving average (pink line) on the weekly chart. Let's see if the Dow can finally break through this barrier if we get some good earnings reports on Thursday.

 

 

The S&P 500 also looked as if it was headed lower during Monday's session. But its strong finish to the session and then advance on Tuesday left the S&P 500 in great shape heading into today's session. Although it gave some of that gain back today, the index still has a very nice gain for the week and appears ready to take out last week's high on the weekly chart. If this happens, next stop will probably be near its 200-week moving average (pink line) in the area of 1,224 points on the chart.     

 

 

The Nasdaq Composite has followed up last week's gain with another solid performance so far this week. However, just like the other indices, we had a little bit of a scare on Monday when the index was moving lower. But it appeared to bounce off the 2,450 point level and has been moving up ever since. The tech-laden index now appears poised to test last week's high on the chart. We just hope it doesn't get rejected as badly as it did last week once it hit this level.  

It certainly has been a slow start to the week as far as the economic data is concerned. With the two meaningless reports now out of the way for the week, we should get some interesting data points coming out on Thursday and Friday. The initial claims number will tell us if the improving job market is continuing to show signs of life. At the same time, the PPI data will tell us if the inflation pressures are remaining in check. Remember, this piece of data is important for the Federal Reserve, which should make it important to the Street. We don't want to see any type of surprising jump in this index. We also will get the existing home sales data, which is always a wild card these days. On Friday, the durable goods orders will be important. We're coming off a very good prior report and traders would love to see another surprise to the upside in this one.

Economic Calendar for This Week

 

Date	ET	Release	For	Actual	Consensus	Prior	Revised From
Apr 22	08:30	Initial Claims	04/17		455K	484K
Apr 22	08:30	Continuing Claims	04/10		4600K	4639K
Apr 22	08:30	PPI	Mar		0.5%	-0.6%
Apr 22	08:30	Core PPI	Mar		0.1%	0.1%
Apr 22	10:00	Existing Home Sales	Mar		5.30M	5.02M
Apr 22	10:00	FHFA Home Price Index	Feb		-0.2%	-0.6%
Apr 23	08:30	Durable Orders	Mar		0.2%	0.9%
Apr 23	08:30	Durable Orders ex auto	Mar		0.6%	1.4%
Apr 23	10:00	New Home Sales	Mar		325K	308K

 

The Indices Recap showed a fairly decent start to the trading day with most of the indices finding themselves in positive territory. Things stayed this way for most of the day with some minor intraday swings. However, late in the session more indices were red than green. The closing bell left things mixed, which was kind of fitting for the uneventful session that we witnessed today.   

 

Indices Recap                                                                                                                                                 

Indices	10:00	11:00	12:00	13:00	14:00	15:00	Close	Level
Dow Jones	+29.40	+17.54	+0.23	+12.77	+17.46	-24.41	+7.86	11124.92
Dow Transports	+18.30	+14.96	+1.90	+29.41	+31.08	+12.28	+14.23	4670.47
Dow Utilities	-0.05	-0.04	+0.13	+0.13	+0.15	-0.58	+0.16	384.42
Nasdaq	+8.28	-1.28	-3.47	+1.57	+1.37	-3.42	+4.30	2504.61
S&P 500	+3.28	-0.27	-1.78	-0.1	-0.67	-5.18	-1.23	1205.94
S&P 500 Premium	3.54	2.10	4.58	3.54	4.09	+3.69	3.53	---
Russell 2000	+1.96	+0.46	+0.20	+2.15	+1.96	+0.74	+4.64	726.19
OEX	+2.04	+0.16	-0.58	-0.15	-0.62	-2.74	-1.03	550.05
SOX	-0.60	-6.29	-6.42	-4.88	-5.34	-6.81	-4.29	391.42
CRB Index	+1.08	+0.46	+1.39	+1.87	+1.49	+0.97	+0.97	276.75
10-Year Note	+4/32	+11/32	+10/32	+11/32	+12/32	+16/32	+13/32	3.747
JPY/USD	93.37	93.24	93.25	93.31	93.26	93.08	93.20	---
USD/EUR	1.3402	1.3390	1.3382	1.3407	1.3401	1.3402	1.3394	---
Cash Gold	1143.10	1143.40	1141.80	1150.00	1148.20	1148.20	1147.10	---

 

The Market Internals looked fairly green for a session that saw so much red late in the day. Both the NYSE and Nasdaq held a nice edge for the advancing issues at the end of the day. This takes away any sting from some of the indices finishing the day in negative territory.      

 

ISSUES	NYSE	NASDAQ
Advancing	1,741	1,418
Declining	1,300	1,265
Unchanged	114	108
Totals	3,155	2,791

 

The 52-week highs-versus-new-lows made a big improvement today, which is kind of expected when the major indices are back towards their highs for the year. As long as we don't get a sizable pull-back, we should see this huge margin for the bulls the rest of the week.

 

ISSUES AT	NYSE	NASDAQ
New 52 Week High	398	290
New 52 Week Low	13	10

 

As with our Regular spreads, the Pro Trader new trades enjoyed the luck from the downdraft on Monday morning. This played right into the hands of our put spreads, helping us to get all four spreads working for us right off the bat.

 

We talked a little bit in the Regular Newsletter about our decision to stay on the put side of things. Because the earnings have been so strong, we just think it would be foolish to step in with a call spread at this time. Never fight the trend, no matter how short-lived you think it might be. It's not that we believe that things are going to turn ugly in a hurry, we just think we've become way overextended to the upside. We know a larger pull-back is coming, we just don't know when.

 

So let's keep this idea of a retracement in the back of our minds as we head into the May cycle. Let's remain conservative in our new trade, but let's not let any concerns keep us on the sidelines. After all, if earnings continue this strong stretch, then we're likely to have a very good trading stretch for a majority of the May cycle.

 

We're going to take advantage of this by going back to the stock that was flying high today after its earnings release. We used to trade Apple every month for several years and think we're starting to see some good opportunities once again. Let's stick with the same trade as the Regular Members for tomorrow and see how things shake out on Thursday. If we see another trade present itself we'll send out an alert on Thursday night.

 

NEW TRADE ALERT (1)

 

Please Note: This is a Day Order and Limit Order.

 

Apple Inc. (AAPL)

OPENING 230-220 MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 230 strike price

Buy 15 May Puts at 220 strike price

Total Credit 0.35 per contract

Potential Profit $525.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $232.50.

 

MAY POSITIONS

 

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50
RUT	Bull Put	630-620		15	.45
NDX	Bull Put	1775-1750		15	.60
SOX	Bull Put	330-320		15	.45

POTENTIAL PROFIT OF

$   2,700.00

 

NDX 1775-1750 BULL PUT SPREAD (10 contracts)

NDX CLOSED AT $2,034.53 Today (259.53 points away from our put spread)

Profit potential of $60.00 per contract

Contingent Stop Order set at $1785.00

This is another spread that we seemed to hit with perfect timing this month. We were able to take advantage of Monday's wicked selling by getting filled in our put spread. Since then, it has been moving up the chart perfectly for our new position. The NDX gained 10.93 points in today's session alone and is now sitting almost 260 points above our "short" strike price at $2,034.53. The only issue we see is that it's now bumping up against last week's high on the chart, which might cause a little profit taking. But even if this happens, we're still sitting in great shape in this one for the time being.

 

 

SOX 330-320 BULL PUT SPREAD (15 contracts)

SOX CLOSED AT $391.42 Today (61.42 points away from our put spread)

Profit potential of $45.00 per contract

Contingent Stop Order set at $332.50

Just like our NDX spread, we seemed to time our entry quite well on this one. Of course, the SOX has really given us some wide trading ranges so far this week. On the chart, it appears to like its 20-day moving average (light blue line). Let's see if this continues to give the index some support on the daily chart. In today's session, the SOX fell 4.29 points to finish the day at $391.42. But even with this falter, we're still sitting better now than when we entered the spread. We have over 61 points of breathing room and plenty of support levels separating the index from our put spread.

 

As always, Trade Happy and Trade Smart

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The selling finally came, but we were already out of the woods for our April spreads. We've been waiting for that pull-back for quite a while and it finally came on Friday. As with most bull runs, we get something out of left field that starts the selling. This was certainly the case on Friday with the bombshell regarding Goldman Sachs. The only thing we don't know is if this is a temporary setback for the bulls or something larger that will last longer.

 

Since our crystal ball isn't working tonight, we're going to have to take the wait-and-see approach. We're going to be a little cautious in our new spreads; however, we're not going to sit on our hands. But before we get to this, let's see how the weekly charts finished the week for the major indices.

 

The Dow Jones Industrial Average started trading last Monday at 10,997 points and then began climbing. That was until the sell-off on Friday, which wiped away most of its gain for the week. However, the large-cap index was able to walk away with a 21 point gain for the five trading days. This translated into a 0.2% increase for the Dow, pushing its year-to-date gain up to 5.7% for 2010. The question on the weekly chart is whether this candle is a reversal candle. Anytime we get a large upper shadow it tells us there's plenty of anxiety at these levels and could be forecasting a reversing trend. On the other hand, the technicals don't always play out.   

 

 

The S&P 500 also moved nicely off its opening price of 1,194 points last week. After posting a nice gain for the week heading into Friday, the index gave it all back and then some on the final trading day of the week. The S&P 500 was left with a 2.24 point loss for the week after the closing bell rang on Friday. Its settlement price of 1,192.13 points chopped 0.2% off its year-to-date gain, which now stands at a positive 6.9%. Just like the Dow's weekly chart, let's see if this is foreshadowing a decline on the horizon or just a temporary setback on its way to higher levels.    

 

 

The Nasdaq Composite couldn't avoid the selling on Friday, but still managed to hold onto a solid 27 point gain for the week. The problem is that Friday wiped away nearly half of its gain for the five trading days last week. However, the tech-laden index still finished the five sessions up 1.1%. This pushed its advance for 2010 up to a remarkable 9.3%. The only issue is that we're getting a similar problem with the Nasdaq's weekly candle on the chart. We never want to get large upper shadows, and that's exactly what we're seeing on all three charts. While this isn't pretty, the Nasdaq is still the best looking chart by far. Let's continue to watch this index for leadership this week.

 

 

The Economic Calendar looks pretty similar to the one we were looking at last week. While there are several reports to deal with, most of them are at the end of the week and won't draw a whole lot of attention from the Street. Just like last week, the focus will be on earnings results first, unless we get more breaking news regarding Goldman Sachs or any other company. Let's keep an eye on the headlines but keep these economic reports in the back of our minds heading into the new week.  

 

Economic Calendar for This Week

 

Date	ET	Release	For	Actual	Consensus	Prior	Revised From
Apr 19	10:00	Leading Indicators	Mar		1.0%	0.1%
Apr 21	10:30	Crude Inventories	04/17		NA	-2.20M
Apr 22	08:30	Initial Claims	04/17		455K	484K
Apr 22	08:30	Continuing Claims	04/10		4600K	4639K
Apr 22	08:30	PPI	Mar		0.5%	-0.6%
Apr 22	08:30	Core PPI	Mar		0.1%	0.1%
Apr 22	10:00	Existing Home Sales	Mar		5.30M	5.02M
Apr 22	10:00	FHFA Home Price Index	Feb		-0.2%	-0.6%
Apr 23	08:30	Durable Orders	Mar		0.2%	0.9%
Apr 23	08:30	Durable Orders ex auto	Mar		0.6%	1.4%
Apr 23	10:00	New Home Sales	Mar		325K	308K

 

The Indices Recap showed a red start to the session, but the selling intensified as more news leaked out. Although most indices didn't finish the session at their lows, it was still a very bearish finish to the trading day. Let's see if this carries through to Monday.  

 

Indices Recap                                                                                                                                                 

Indices	10:00	11:00	12:00	13:00	14:00	15:00	Close	Level
Dow Jones	-30.61	-58.12	-131.65	-145.56	-135.56	-110.34	-125.91	11018.66
Dow Transports	-51.11	-79.07	-106.80	-97.26	-96.20	-80.41	-79.18	4645.75
Dow Utilities	-1.40	-2.30	-4.54	-4.14	-4.88	-4.10	-4.17	379.46
Nasdaq	-17.02	-19.91	-36.64	-39.58	-39.11	-32.21	-34.43	2481.26
S&P 500	-7.38	-12.38	-20.35	-21.31	-20.47	-17.50	-19.54	1192.13
S&P 500 Premium	1.59	2.79	2.70	4.06	3.69	2.67	1.68	---
Russell 2000	-5.10	-5.75	-11.82	-11.53	-11.80	-9.18	-9.56	714.63
OEX	-3.35	-5.97	-9.19	-9.73	-9.19	-8.21	-9.19	544.68
SOX	-6.82	-6.23	-8.87	-8.29	-7.13	-5.02	-5.11	393.75
CRB Index	-1.73	-3.17	-3.58	-4.04	-3.78	-3.47	-3.46	276.29
10-Year Note	+8/32	+14/32	+18/32	+16/32	+17/32	+16/32	+8/32	3.77
JPY/USD	92.61	92.29	92.02	92.03	92.08	92.15	92.09	---
USD/EUR	1.3507	1.3515	1.3482	1.3498	1.3490	1.3499	1.3509	---
Cash Gold	1148.80	1142.60	1133.00	1134.20	1133.90	1136.30	1136.30	---

 

The Market Internals looked about as ugly as the trading felt on Friday. Across the board it was the declining stocks holding a decisive edge over the advancing ones.     

 

ISSUES	NYSE	NASDAQ
Advancing	608	728
Declining	2,500	1,972
Unchanged	86	117
Totals	3,194	2,817

 

The 52-week highs-versus-new-lows still showed a large number of issues hitting new highs, but that was probably early in the session. We doubt the number of issues at new highs will be anywhere close to this on Monday. It will be very interesting to see how these ratios look on Wednesday night. We doubt they'll be anywhere as bullish as the ones we show here from Friday.

 

ISSUES AT	NYSE	NASDAQ
New 52 Week High	218	198
New 52 Week Low	9	15

 

As we discussed in the Regular Newsletter, it was a fairly uneventful session for us on Friday, even with the heavy selling taking place. Although it was a fairly small portfolio of positions for us this cycle, it still was a nice little profit for the amount of money that we had at risk. Before we get to the new spreads, let's go ahead and add up the numbers for our April spreads.

 

APRIL POSITIONS

 

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
NDX	Bull Put	1750-1725		10	.80
SOX	Bull Put	340-330		15	.50
RUT	Bull Put	630-620		15	.40
CME	Bull Put	290-280		15	.35
OEX	Bull Put	520-510		15	.37

PROFIT OF

$3,230.00

 

NDX 1750-1725 BULL PUT SPREAD (10 contracts entered on 3/22/2010)

Profit of $85.00 per contract

SOX 340-330 BULL PUT SPREAD (15 contracts entered on xxx)

Profit of $50.00 per contract

RUT 630-620 BULL PUT SPREAD (15 contracts entered on xxx)

Profit of $40.00 per contract

CME 290-280 BULL PUT SPREAD (15 contracts entered on 04/06/2010)

Profit of $35.00 per contract

OEX 520-510 BULL PUT SPREAD (15 contracts entered on 04/06/2010)

Profit of $37.00 per contract

 

With another profitable cycle now under our belts, let's get things started for May. As we said in the Regular Newsletter, we're going to start things a little slower than normal. We already have the OEX spread filled for a majority of our members, but we're going to try to also get into that RUT put spread, just like the Regular members.

 

For the Pros, we're going to add a couple safe spreads to start. We're going back to our sure thing over the past year, the NDX spread. Once again, we're going to place our strike prices way out of the money to ensure another profit in this one for May. We're also going back to the SOX, which has been on a nice roll as of late. While it wasn't able to hold off the selling on Friday, we like its upward trend and think this round of selling is just giving us a better entry point in this one. Let's get these two extra spreads going on Monday and then re-evaluate things on Wednesday.

 

NEW TRADE ALERT (4)

 

Please Note: This is a Day Order and Limit Order. The OEX spread only applies to those members not filled last week.

 

FOR MAY CYCLE

 

RUSSELL 2000 INDEX (RUT)

OPENING 630-620 MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 630 strike price

Buy 15 May Puts at 620strike price

Total Credit 0.45 per contract

Potential Profit $675.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $635.00.

 

S&P 100 INDEX (OEX)

OPENING 500-490 MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 500 strike price

Buy 15 May Puts at 490 strike price

Total Credit 0.50 per contract

Potential Profit $750.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $502.50.

 

NASDAQ-100 (NDX)

OPENING 1775-1750 MAY BULL PUT SPREAD (10 contracts)

Sell 10 May Puts at 1775 strike price

Buy 10 May Puts at 1750 strike price

Total Credit 0.60 per contract

Potential Profit $600.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $1785.00.

 

PHLX Semiconductor (SOX)

OPENING 330-320 MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 330 strike price

Buy 15 May Puts at 320 strike price

Total Credit 0.45 per contract

Potential Profit $675.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $332.50.

 

NDX DAILY CHART

 

 

SOX DAILY CHART

 

 

MAY POSITIONS

 

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50

PROFIT OF

$   750.00

 

 

As always, Trade Happy and Trade Smart

 

Despite a bumpy start to the week, the Market picks up steam thanks to excellent earnings and economic reports. It was hard to find any pessimism in today's session with every bit of news coming out tilted towards the bulls. From earnings to economic conditions, it was good news to be "long" in today's session. We already discussed all the data points in the Regular Newsletter so let's take a look at the weekly charts to see if we can see any barriers that might be on the horizon.  

 

The Dow Jones Industrial Average is giving us such a large green candle on the weekly chart that it nearly looks like five full days of trading has already taken place. But with two sessions left this week, we have a ways to go before this candle is done forming. After topping the 11,000 point barrier on the chart, the index now finds itself up against its 200-week moving average. This could be a very interesting resistance level for the index. While normally we would expect there to be some tough resistance in this area, if we get more strong earnings data, it would be hard for any barrier on the chart to slow down this Market.

 

 

The S&P 500 has also broken through some difficult barriers on the chart, including today's move through the 1,200 point region. Unlike the Dow, the S&P 500 remains well below its 200-week moving average. Let's keep an eye on this line as the index closes in on this mark. Normally, this barrier would be stiff resistance for the index.

 

 

The Nasdaq Composite continues to lead the way higher on both the daily and weekly charts. While we do see some future resistance from the 2,550 point line on the chart, it isn't pressing up against any other barriers that we can see in the near-term. However, it certainly is getting overextended. But, we've thought that for quite a while now and that hasn't seemed to slow down the tech-laden index just yet.

The economic calendar still has plenty of economic reports coming out this week, but the focus tomorrow will remain on the earnings front. However, that could all change if we get a big jump in initial claims or some other kind of disappointment from the economic data. But if the data remains solid like it was today, then it will become background noise to the earnings reports.

Economic Calendar for This Week

 

Date	ET	Release	For	Actual	Consensus	Prior	Revised From
Apr 15	08:30	Continuing Claims	04/03		4600K	4550K
Apr 15	08:30	Initial Claims	04/10		440K	460K
Apr 15	09:00	Net Long-Term TIC Flows	Jan		NA	$19.1B
Apr 15	09:15	Capacity Utilization	Mar		73.3%	72.7%
Apr 15	09:15	Industrial Production	Mar		0.7%	0.1%
Apr 15	10:00	Philadelphia Fed	Apr		20.0	18.9
Apr 16	08:30	Building Permits	Mar		626K	637K
Apr 16	08:30	Housing Starts	Mar		610K	575K
Apr 16	09:55	Mich Sentiment	Apr		75.0	73.6

 

The Indices Recap showed a decent start to the session, but it was the strong afternoon that was exciting for the bulls. Nearly all the indices were able to close at their highs of the session, which shows just how much control the bulls had over the trading today. Let's see if this strength can continue the remainder of the week.

 

Indices Recap                                                                                                                                                 

Indices	10:00	11:00	12:00	13:00	14:00	15:00	Close	Level
Dow Jones	+43.98	+49.50	+47.08	+61.82	+65.15	+87.97	+103.61	11123.11
Dow Transports	+54.13	+65.18	+61.27	+74.77	+83.54	+100.22	+108.37	4645.03
Dow Utilities	-1.13	-2.28	-2.23	-2.05	-1.95	-1.59	-0.37	384.0
Nasdaq	+19.02	+19.32	+24.47	+27.90	+27.95	+32.30	+38.87	2504.86
S&P 500	+5.19	+5.80	+7.11	+8.58	+8.61	+10.80	+13.33	1210.65
S&P 500 Premium	2.61	4.00	3.11	3.58	3.51	3.80	3.63	---
Russell 2000	+4.79	+6.06	+8.12	+9.88	+10.23	+12.63	+15.31	722.40
OEX	+2.60	+3.06	+3.67	+4.28	+4.09	+5.09	+6.13	553.02
SOX	+11.61	+11.28	+12.43	+13.62	+13.60	+15.98	+16.40	397.73
CRB Index	+0.62	+1.32	+2.53	+3.21	+3.07	+2.61	+2.61	279.96
10-Year Note	-2/32	-3/32	+2/32	-3/32	-4/32	-7/32	-11/32	3.861
JPY/USD	93.49	93.44	93.04	93.06	93.08	93.13	93.19	---
USD/EUR	1.3619	1.3625	1.3666	1.3665	1.3659	1.3656	1.3658	---
Cash Gold	1154.50	1156.50	1158.60	1159.20	1159.00	1159.00	1159.00	---

 

The Market Internals showed pure domination by the bulls in today's session. When the internals match what we saw on the indices, it just reinforces the strength behind today's advance. Not a lot more to say about that.

 

ISSUES	NYSE	NASDAQ
Advancing	2,383	2,163
Declining	716	566
Unchanged	92	85
Totals	3,191	2,814

 

The 52-week highs-versus-new-lows showed a huge uptick in issues hitting new highs. The only surprise was that there were some issues hitting new lows on such a strong session.

 

ISSUES AT	NYSE	NASDAQ
New 52 Week High	611	357
New 52 Week Low	8	5

 

With the April cycle winding down, we really couldn't ask to be sitting much better. All of our positions are now pretty much put to bed with two trading days until expiration. Other than our hiccups with getting into the spreads this month, it has been another relatively uneventful session, just the way we like them. For tomorrow, we're going to throw the same RUT spread out there as the Regular Members and see if we can get a fish to bite. However, it probably is quite doubtful. If we don't get anything tomorrow, we might make another adjustment for Friday, but otherwise we're going to wait until Monday for the bulk of our new trade alerts. But for now, let's take a look at how our Pro spreads are sitting heading into Thursday.

 

NEW TRADE ALERT (1)

 

Please Note: This is a Day Order and Limit Order.

 

FOR MAY CYCLE

 

RUSSELL 2000 INDEX (RUT)

OPENING 630-620 MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 630 strike price

Buy 15 May Puts at 620 strike price

Total Credit 0.55 per contract

Potential Profit $825.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $635.00.

 

APRIL POSITIONS

 

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
NDX	Bull Put	1750-1725		10	.80
SOX	Bull Put	340-330		15	.50
RUT	Bull Put	630-620		15	.40
CME	Bull Put	290-280		15	.35
OEX	Bull Put	520-510		15	.37

PROFIT OF

$3,230.00

 

MAY POSITIONS

 

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50

PROFIT OF

$   750.00

 

NDX 1750-1725 BULL PUT SPREAD (10 contracts entered on 3/22/2010)

NDX CLOSED AT $2,028.82 Today (278.82 points away from our put spread)

Profit potential of $85.00 per contract

Contingent Stop Order set at $1,760.00

Until tech stocks decide to slow down, it's going to be easy pickings in this index. We've been able to coast to another easy profit again this month in the NDX with the index probably going to close out 300 points above our put spread. Let's just continue to sit back and relax until we hit the finish line in this one.

 

 

SOX 340-330 BULL PUT SPREAD (15 contracts entered on xxx)

SOX CLOSED AT $397.73 Today (57.73 points away from our put spread)

Profit potential of $50.00 per contract

Contingent Stop Order set at $342.50

Strong earnings reports in the semiconductor index helped the SOX to take off like a rocket in today's session. This puts the index nearly 60 points above our put spread with time running out. The only question starts to be where to place our put spread for May

 

 

As always, Trade Happy and Trade Smart

 

We had some success for the auto traders in the OEX spread this moring, but not the RUT. We are going to send the same alerts back to the brokers tomorrow for those members not filled on Tuesday. However, we're going to lower the credit by a nickel on the RUT trade to see if this helps our chances. Keep in mind that we'll probably still need a move down tomorrow, like the one we got this morning, in order to get filled.

 

NEW TRADE ALERT (2) for Income Spread Trader -

Regular & Pro Trader

 

Please Note: This is a Day Order and Limit Order. The OEX alert only applies to those members NOT filled on Tuesday. Thanks.

 

FOR MAY CYCLE

 

RUSSELL 2000 INDEX (RUT)

OPENING 620-610 MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 620 strike price

Buy 15 May Puts at 610 strike price

Total Credit 0.50 per contract

Potential Profit $750.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $625.00.

 

S&P 100 INDEX (OEX)

OPENING 500-490 MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 500 strike price

Buy 15 May Puts at 490 strike price

Total Credit 0.50 per contract

Potential Profit $750.00

 

Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $502.50.