Greetings Fellow Secreteer,
The events of last week were our first indication that maybe 2011 is not going to be quite as smooth as some think. Maybe we're past teetering on the verge of the precipice as we were in '08 but there are still plenty of obstacles that can derail this market. The key is to trade a strategy with a built-in advantage. Our previous trades have done very well compared to even the overall market returns since August--and for this week we've got two new plays with some very generous yields.
April
8.70% - 16.82% Return on Investment, 91.16% - 86.35% Probability of Win.
8.93% - 14.73% Return on Investment, 90.75% - 86.19% Probability of Win.
The Markets and How They Affect Us
Last week, the S&P 500 saw it biggest decline in 3-months as U.S. stocks also plunged on surging oil prices. The S&P 500 retreated after climbing to its highest level since June 2008. The sell-off lowered the indices’ 2011 advance to just 5% after 2010’s 13% rally as economic stimulus measures and positive earnings had bolstered investor’s confidence. The events surrounding Libya were the key focal point as investors feared that a tightening of oil supplies would lead to higher prices and cause a shift in spending from other, more discretionary, sectors of the economy.
As for last week’s spike in market volatility, when reading the VIX, there's always going to be this constant pressure on reverting back to the mean. So, when there is such a spike, there needs to be continued pressure in order for it to keep rising. Even with the geopolitical issues, the VIX isn't continuing to rise--Friday it gapped under 20 and stayed there. As long as there is no pullback in economic growth, stocks should hold up. The key to watch is interest rates.
What are the Secrets of the Week?
Our 1st play is on an equity which is offering an 8.70% - 16.82% return on investment with a 91.16% - 86.35% probability of win. Our 2nd play is on an ETF which offers a 8.93% - 14.73% return on investment with a 90.75% - 86.19% probability of win. Let’s get started.
You can get in on this week's trades along with two new high-probability trades per week by clicking here now: www.cashflowheaven.com/ws
God Bless and have an awesome trading week!
Robert
Monday, February 28, 2011
Thursday, February 24, 2011
HEWLETT-PACKARD (HPQ) PLUNGED OFF A CLIFF THIS MORNING DRIVING OUR STRANGLE UP AN EYE-POPPING ONE-HUNDRED-EIGHTEEN PERCENT!
Once again this past week's action has been interesting--and profitable...
HEWLETT-PACKARD (HPQ) ANNOUNCED EARNINGS YESTERDAY AND THE STOCK PLUNGED OFF A CLIFF THIS MORNING DRIVING OUR STRANGLE UP AN EYE-POPPING ONE-HUNDRED-EIGHTEEN PERCENT!
And those profits include both sides of the play--in other words the total cost, not just the put side. The action on HPQ underscores the beauty of this strategy--most of the time you are 'just' going to make decent returns--like 20 to 30% in a couple of weeks--but once in a while there will truly be an explosion--and that's where we'll make windfall style profits.
The exciting thing is we never know where these profits will come from--or in which direction. HPQ was seen as a bullish trade when we made it--the chart was up, the fundamentals looked good and the stock was rising in anticipation of earnings. And THAT is why trading 'both ways' is so darn necessary--you never know when the CEO is going to cut revenue forecasts by two billion dollars like HPQs Léo Apotheker did yesterday.
We've got several other trades making us money as well--but for now let's take a good look at...
WHICH WAY THIS MARKET IS HEADED
The up escalator seems to have stalled--in fact it it's reversing. One look at the news and you can see why.
Protests in the Middle East are driving oil prices higher and the stock market lower. Al-Jazeera reported today that at least 250 people died in the Libyan capital of Tripoli overnight as violence spread in the nation with Africa's largest oil reserves.
"The dominoes are falling in the Middle East, causing oil to spike and risky asset classes to stumble," Fred Goodwin, a fixed-income strategist at Nomura International in London, wrote in a research note. "Higher oil is a very bad growth shock, as it smashes real incomes."
Crude futures settled today at their highest price since October 2008, briefly trading above $100 a barrel as concerns about civil strife in Libya and anti-government protests elsewhere in the Mideast and North Africa shocked the markets.
Light sweet crude for April delivery, gained $2.68 to finish at $98.10 a barrel on the New York Mercantile Exchange. That was oil’s highest finish since Oct. 1, 2008 -- when oil prices were on their way down from a settlement high past $145 a barrel that summer.
Libyan leader Muammar Qaddafi vowed to fight a growing rebellion until his "last drop of blood"--and he may end up getting exactly that. Qaddafi pledged to deploy the army and police to impose order and called on supporters to "reclaim the streets". Continued protests "will lead to civil war," Qaddafi warned.
The truth is--the country is already split between the East and the West. About two thirds of the population lives in the West, with about one third in the East, separated by about 600 km of mostly empty desert. Two thirds of the oil production is in the East, and about one third of the oil is in the west, so there is this split in the country between the population and between the energy; there’s no overlap between the two. So Qaddafi’s problem is that the majority oil income is dependent upon security in the half of the country that he has no control over.
The unrest in Libya has forced oil companies to shut down production of as much as a million barrels a day of some of the world’s highest quality crude. For the first time, the turmoil that has spread from Tunisia to Egypt to Bahrain has made an appreciable dent on world oil supplies.
Libya produces less than 2 percent of the world’s oil and exports little to the United States. But the high quality of its reserves magnifies its importance, causing a spike in both American and European oil price benchmarks despite assurances from Saudi Arabia that it is ready to pump more oil to calm markets.
Libya’s sweet crude cannot be easily replaced for the production of gasoline, diesel and jet fuel, particularly by the many European and Asian refineries that are not equipped to refine heavier grades of oil. Saudi Arabia may have more than 4 million barrels of spare capacity, but it includes heavier grades of crude that are higher in sulfur content and more expensive to refine--in this case quality counts more than quantity.
Should the turmoil in Libya last for more than a few weeks, oil experts predict that European refiners will be forced to buy sweet crude from Algeria and Nigeria, two principal sources for the United States. That could push gasoline higher in the U.S. where prices have already risen 6 cents a gallon in the last week to an average of $3.19 for regular.
“Nigeria and Algeria are already producing flat out so they can’t come up with another million barrels a day,” Michael Lynch, president of the Strategic Energy and Economic Research consultancy firm, warned. “That means there will be a scramble for lighter crude supplies,” and that could, “force all sweet crude refiners into a bidding war.”
The problem with higher oil prices is they cause higher inflation and lower growth. High oil and gasoline prices take away purchasing power from consumers and high fuel prices make it more expensive to transport goods. If prices stay high in this fragile economic recovery we could see another recessionary dip--and that possibility has the potential of really smacking the stock market--especially at these elevated levels. The question is...
HOW DO WE MAKE MONEY ON IT?
We've got two super high-potential plays today and neither one of them are on stocks. The first is on a double ETF that looks ready to rocket higher--but as always we'll be covered both ways.
Our second play is on an ETF that also looks ready to blast to the upside (in fact it's already started). And the beauty of this one is our entry is cheap--.85 cents or less for BOTH sides making our profit potential 'explosive'!
We've got some huge potential on a market looking 'jiggy'--so let's get to it...
For more information on everything you receive with your ExplosiveProfits subscription click on www.cashflowheaven.com/pg
HEWLETT-PACKARD (HPQ) ANNOUNCED EARNINGS YESTERDAY AND THE STOCK PLUNGED OFF A CLIFF THIS MORNING DRIVING OUR STRANGLE UP AN EYE-POPPING ONE-HUNDRED-EIGHTEEN PERCENT!
And those profits include both sides of the play--in other words the total cost, not just the put side. The action on HPQ underscores the beauty of this strategy--most of the time you are 'just' going to make decent returns--like 20 to 30% in a couple of weeks--but once in a while there will truly be an explosion--and that's where we'll make windfall style profits.
The exciting thing is we never know where these profits will come from--or in which direction. HPQ was seen as a bullish trade when we made it--the chart was up, the fundamentals looked good and the stock was rising in anticipation of earnings. And THAT is why trading 'both ways' is so darn necessary--you never know when the CEO is going to cut revenue forecasts by two billion dollars like HPQs Léo Apotheker did yesterday.
We've got several other trades making us money as well--but for now let's take a good look at...
WHICH WAY THIS MARKET IS HEADED
The up escalator seems to have stalled--in fact it it's reversing. One look at the news and you can see why.
Protests in the Middle East are driving oil prices higher and the stock market lower. Al-Jazeera reported today that at least 250 people died in the Libyan capital of Tripoli overnight as violence spread in the nation with Africa's largest oil reserves.
"The dominoes are falling in the Middle East, causing oil to spike and risky asset classes to stumble," Fred Goodwin, a fixed-income strategist at Nomura International in London, wrote in a research note. "Higher oil is a very bad growth shock, as it smashes real incomes."
Crude futures settled today at their highest price since October 2008, briefly trading above $100 a barrel as concerns about civil strife in Libya and anti-government protests elsewhere in the Mideast and North Africa shocked the markets.
Light sweet crude for April delivery, gained $2.68 to finish at $98.10 a barrel on the New York Mercantile Exchange. That was oil’s highest finish since Oct. 1, 2008 -- when oil prices were on their way down from a settlement high past $145 a barrel that summer.
Libyan leader Muammar Qaddafi vowed to fight a growing rebellion until his "last drop of blood"--and he may end up getting exactly that. Qaddafi pledged to deploy the army and police to impose order and called on supporters to "reclaim the streets". Continued protests "will lead to civil war," Qaddafi warned.
The truth is--the country is already split between the East and the West. About two thirds of the population lives in the West, with about one third in the East, separated by about 600 km of mostly empty desert. Two thirds of the oil production is in the East, and about one third of the oil is in the west, so there is this split in the country between the population and between the energy; there’s no overlap between the two. So Qaddafi’s problem is that the majority oil income is dependent upon security in the half of the country that he has no control over.
The unrest in Libya has forced oil companies to shut down production of as much as a million barrels a day of some of the world’s highest quality crude. For the first time, the turmoil that has spread from Tunisia to Egypt to Bahrain has made an appreciable dent on world oil supplies.
Libya produces less than 2 percent of the world’s oil and exports little to the United States. But the high quality of its reserves magnifies its importance, causing a spike in both American and European oil price benchmarks despite assurances from Saudi Arabia that it is ready to pump more oil to calm markets.
Libya’s sweet crude cannot be easily replaced for the production of gasoline, diesel and jet fuel, particularly by the many European and Asian refineries that are not equipped to refine heavier grades of oil. Saudi Arabia may have more than 4 million barrels of spare capacity, but it includes heavier grades of crude that are higher in sulfur content and more expensive to refine--in this case quality counts more than quantity.
Should the turmoil in Libya last for more than a few weeks, oil experts predict that European refiners will be forced to buy sweet crude from Algeria and Nigeria, two principal sources for the United States. That could push gasoline higher in the U.S. where prices have already risen 6 cents a gallon in the last week to an average of $3.19 for regular.
“Nigeria and Algeria are already producing flat out so they can’t come up with another million barrels a day,” Michael Lynch, president of the Strategic Energy and Economic Research consultancy firm, warned. “That means there will be a scramble for lighter crude supplies,” and that could, “force all sweet crude refiners into a bidding war.”
The problem with higher oil prices is they cause higher inflation and lower growth. High oil and gasoline prices take away purchasing power from consumers and high fuel prices make it more expensive to transport goods. If prices stay high in this fragile economic recovery we could see another recessionary dip--and that possibility has the potential of really smacking the stock market--especially at these elevated levels. The question is...
HOW DO WE MAKE MONEY ON IT?
We've got two super high-potential plays today and neither one of them are on stocks. The first is on a double ETF that looks ready to rocket higher--but as always we'll be covered both ways.
Our second play is on an ETF that also looks ready to blast to the upside (in fact it's already started). And the beauty of this one is our entry is cheap--.85 cents or less for BOTH sides making our profit potential 'explosive'!
We've got some huge potential on a market looking 'jiggy'--so let's get to it...
For more information on everything you receive with your ExplosiveProfits subscription click on www.cashflowheaven.com/pg
Monday, January 24, 2011
This Week We Saw a 16%, a 30%, and a 69% Return
This past week the deteriorating condition of Steve Jobs health threw us a curve on our Apple (AAPL) calls---but we still managed to...
SELL 70% OF OUR AAPL CALL POSITION BEFORE EARNINGS FOR A DECENT SIXTEEN PERCENT PROFIT!
AND WE SOLD THE OTHER 30% AFTER EARNING FOR A MORE GENEROUS THIRTY-SEVEN PERCENT PROFIT!
PLUS RATHENON (RTN) ZOOMED HIGHER THIS PAST WEEK PROPELLING OUR FEB 50 CALLS TO AN IMPRESSIVE SIXTY-NINE PERCENT OPEN PROFIT!
Those were some nice gains and I'm glad we made them but the Apple news underscores the risk we take over the weekend. The news about Jobs was released on MLK day--a holiday--but the point is the same--making trading decisions over the weekend exposes us to weekend news risk.
For that reason this will be the last issue of the Pearly Gates to come out on a Sunday. From now on we'll be releasing our updates and new plays early Wednesday evening. This gives us time to see how the weekend news affects the markets and plays out over the next few days.
Our first new issue will be coming out this Wednesday at 6:00pm PT (which is 9:00pm ET) in the form of a 90 minute webinar which you can sign up for right here.
During this webinar we'll explore a method of keeping our losses to a bare minimum while still leaving the door open for unlimited gains.
If you've been trading any length of time you know how important it is to keep your losses low--big losses are extremely difficult to overcome mathematically.
At the beginning of this year I made a promise to post our monthly track record on the public section of the Pearly Gates at the beginning of every month. The idea came that if we are not making people money over the long term then the service should not exist. If we post our track record every month then folks can see for themselves if they want to join--and if the record is bad people will not sign-up and our existing subscribers will quit.
Therefore in order to survive the service needs to be good for the subscribers--just as it should be. This new trading style due to be introduced this Wednesday evening is a big step toward making sure our subscribers are profitable.
We exited two plays this past week besides AAPL--they were KMX and NDAQ. They were directional options trades and we lost on both. This is a situation that I would like to see become increasingly rare over the coming months.
Now let's get down to the business of focusing on some high potential trades this week. To do that let's first take a good look at...
WHICH WAY THIS MARKET IS HEADED
The twomajor indices diverged this past week as 'sell the news' profit taking set in. The SP-500 lost 0.8 percent ending a seven-week winning streak.
The Nasdaq dropped 2.4 percent dragged lower by Google.
Google shares were down 2.4 percent at $611.83 after hitting an intraday high of $641.73 as confidence wavered that its co-founder Larry Page would rejuvenate the company in his new position as chief executive.
Late Thursday, Google reported earnings that beat Wall Street’s expectations.
The action in Google shares is not so much about Google earnings, but a factor of the market itself as traders are 'selling the news' to lock in profits even if the news is good. We might be seeing more of that as more earnings are released this coming week.
Nearly a quarter of the S&P 500 and about half of the 30 Dow stocks report earnings this week, including American Express, McDonald's, Johnson and Johnson, Caterpillar and Boeing.
The Fed meets Tuesday and Wednesday, and there will be reports on housing, durable goods and fourth quarter GDP. President Obama gives his State of the Union address Tuesday.
Plenty of action to drive stocks--one way or the other.
Even though the big trend is still bullish on the charts--the market could be starting to unravel. Stocks that were the most popular are falling the fastest (like APPL and GOOG), and the small caps, as represented by the Russell 2000 are really tanking.
Last week's sell-off could be a beginning response to inflation. Inflation is more visible in China and Europe, but in the months ahead it's going to be more visible here.
Midweek, China added to those concerns when fourth quarter GDP was a surprisingly high 9.8 percent. Commodities and stock markets were hit by concerns China would tighten, cooling global growth. Markets are expecting to see China announce further rate hikes and it's the Chinese market that has been driving commodity demand.
The worst performing Standard and Poor's sector was the commodities-related materials sector, down 3.3 percent, followed by tech, down 1.7 percent.
The reason inflation kills bull markets is it usually comes when the economy is overheating, so the response is monetary tightening. From an stock market perspective, that's a negative scenario. We have an up-tick in inflation in China and it's being met with further tightening and emerging markets in general are having that same problem.
The interesting difference is the U.S., because we don't have any tightening bias, so we're likely to get the full benefit of upside to global growth. Plus as other countries tighten, their currencies rise against the dollar, making U.S. exports cheaper.
The downside of course is as the dollar falls in purchasing power we get inflation--something we've already seen in commodity prices, particularly food and energy.
For now however we have a pretty good base for a continuation of the rally. While the markets are always vulnerable to a correction at this point in the cycle that correction is liable to be bought. The key is the Fed continuing to keep rates artificially low--if rates start rising the market will crash.
The Fed is not expected to take any action at its two-day meeting on Tuesday, but it could comment on the economy and inflation outlook. The main question is whether the tone changes and does anyone dissent on the current QE program.
We'll get a batch of housing reports this week including the S&P Case Shiller home price index on Tuesday; new home sales on Wednesday and pending home sales on Thursday. Nothing is likely to change in housing unless we see a big creation in new jobs--not likely for awhile.
Europe has been a focus for the markets, but sovereign spreads narrowed and the euro continued to rise as the past week came to a close. Apparently the market is believing the efforts to solve the sovereign crisis, including a plan by Spain to shore up its savings banks. The bottom line however is the European Union has an unsolvable problem that will only get worse--it's just a matter of time until the next debt bomb hits--but for now things have quieted down.
President Obama speaks to the nation Tuesday night and many expect him to display the more centrist posture he has taken lately. He may even talk about "spending restraint".
In addition the President may indicate the top corporate tax rate, which is 35 percent, is too high. Right now it's the second highest in the world and if Japan's new Prime Minister has his way the US will have the highest in the world. There's a reason US corporations have been fleeing the country for the past 30 years.
President Obama may even talk about corporate and individual tax reform and possibly even entitlement reform like Social Security.
He probably won't be particularly specific, but he'll likely say a few things that are friendly to business. After making the tax cut deal in December the President may have found a template to get re-elected. If the State of the Union address spins any of the above toward a more business friendly government it should be mildly positive for the markets.
We've got a quarter of the SP-500 reporting this week along with a ton of market moving economic events--the question is...
HOW DO WE MAKE MONEY ON IT?
We've got two trades lined up this week with some excellent potential.
The first is on an inverse ETF that looks ready to rocket to the moon. However we can take a very low cost--about a dollar--'both ways' position to protect us on the downside while leaving the door open for some big gains on the upside.
Our second trade is also skewed to the upside on a company with a very bullish chart that has taken a dip. This dip will likely be bought making us some great profits but just like our first trade we'll be protected in both directions.
We've got a turbulent market with two great set-ups to play it so let's get started...
For more information on everything you receive with your Pearly Gates subscription click on www.cashflowheaven.com/pg
SELL 70% OF OUR AAPL CALL POSITION BEFORE EARNINGS FOR A DECENT SIXTEEN PERCENT PROFIT!
AND WE SOLD THE OTHER 30% AFTER EARNING FOR A MORE GENEROUS THIRTY-SEVEN PERCENT PROFIT!
PLUS RATHENON (RTN) ZOOMED HIGHER THIS PAST WEEK PROPELLING OUR FEB 50 CALLS TO AN IMPRESSIVE SIXTY-NINE PERCENT OPEN PROFIT!
Those were some nice gains and I'm glad we made them but the Apple news underscores the risk we take over the weekend. The news about Jobs was released on MLK day--a holiday--but the point is the same--making trading decisions over the weekend exposes us to weekend news risk.
For that reason this will be the last issue of the Pearly Gates to come out on a Sunday. From now on we'll be releasing our updates and new plays early Wednesday evening. This gives us time to see how the weekend news affects the markets and plays out over the next few days.
Our first new issue will be coming out this Wednesday at 6:00pm PT (which is 9:00pm ET) in the form of a 90 minute webinar which you can sign up for right here.
During this webinar we'll explore a method of keeping our losses to a bare minimum while still leaving the door open for unlimited gains.
If you've been trading any length of time you know how important it is to keep your losses low--big losses are extremely difficult to overcome mathematically.
At the beginning of this year I made a promise to post our monthly track record on the public section of the Pearly Gates at the beginning of every month. The idea came that if we are not making people money over the long term then the service should not exist. If we post our track record every month then folks can see for themselves if they want to join--and if the record is bad people will not sign-up and our existing subscribers will quit.
Therefore in order to survive the service needs to be good for the subscribers--just as it should be. This new trading style due to be introduced this Wednesday evening is a big step toward making sure our subscribers are profitable.
We exited two plays this past week besides AAPL--they were KMX and NDAQ. They were directional options trades and we lost on both. This is a situation that I would like to see become increasingly rare over the coming months.
Now let's get down to the business of focusing on some high potential trades this week. To do that let's first take a good look at...
WHICH WAY THIS MARKET IS HEADED
The twomajor indices diverged this past week as 'sell the news' profit taking set in. The SP-500 lost 0.8 percent ending a seven-week winning streak.
The Nasdaq dropped 2.4 percent dragged lower by Google.
Google shares were down 2.4 percent at $611.83 after hitting an intraday high of $641.73 as confidence wavered that its co-founder Larry Page would rejuvenate the company in his new position as chief executive.
Late Thursday, Google reported earnings that beat Wall Street’s expectations.
The action in Google shares is not so much about Google earnings, but a factor of the market itself as traders are 'selling the news' to lock in profits even if the news is good. We might be seeing more of that as more earnings are released this coming week.
Nearly a quarter of the S&P 500 and about half of the 30 Dow stocks report earnings this week, including American Express, McDonald's, Johnson and Johnson, Caterpillar and Boeing.
The Fed meets Tuesday and Wednesday, and there will be reports on housing, durable goods and fourth quarter GDP. President Obama gives his State of the Union address Tuesday.
Plenty of action to drive stocks--one way or the other.
Even though the big trend is still bullish on the charts--the market could be starting to unravel. Stocks that were the most popular are falling the fastest (like APPL and GOOG), and the small caps, as represented by the Russell 2000 are really tanking.
Last week's sell-off could be a beginning response to inflation. Inflation is more visible in China and Europe, but in the months ahead it's going to be more visible here.
Midweek, China added to those concerns when fourth quarter GDP was a surprisingly high 9.8 percent. Commodities and stock markets were hit by concerns China would tighten, cooling global growth. Markets are expecting to see China announce further rate hikes and it's the Chinese market that has been driving commodity demand.
The worst performing Standard and Poor's sector was the commodities-related materials sector, down 3.3 percent, followed by tech, down 1.7 percent.
The reason inflation kills bull markets is it usually comes when the economy is overheating, so the response is monetary tightening. From an stock market perspective, that's a negative scenario. We have an up-tick in inflation in China and it's being met with further tightening and emerging markets in general are having that same problem.
The interesting difference is the U.S., because we don't have any tightening bias, so we're likely to get the full benefit of upside to global growth. Plus as other countries tighten, their currencies rise against the dollar, making U.S. exports cheaper.
The downside of course is as the dollar falls in purchasing power we get inflation--something we've already seen in commodity prices, particularly food and energy.
For now however we have a pretty good base for a continuation of the rally. While the markets are always vulnerable to a correction at this point in the cycle that correction is liable to be bought. The key is the Fed continuing to keep rates artificially low--if rates start rising the market will crash.
The Fed is not expected to take any action at its two-day meeting on Tuesday, but it could comment on the economy and inflation outlook. The main question is whether the tone changes and does anyone dissent on the current QE program.
We'll get a batch of housing reports this week including the S&P Case Shiller home price index on Tuesday; new home sales on Wednesday and pending home sales on Thursday. Nothing is likely to change in housing unless we see a big creation in new jobs--not likely for awhile.
Europe has been a focus for the markets, but sovereign spreads narrowed and the euro continued to rise as the past week came to a close. Apparently the market is believing the efforts to solve the sovereign crisis, including a plan by Spain to shore up its savings banks. The bottom line however is the European Union has an unsolvable problem that will only get worse--it's just a matter of time until the next debt bomb hits--but for now things have quieted down.
President Obama speaks to the nation Tuesday night and many expect him to display the more centrist posture he has taken lately. He may even talk about "spending restraint".
In addition the President may indicate the top corporate tax rate, which is 35 percent, is too high. Right now it's the second highest in the world and if Japan's new Prime Minister has his way the US will have the highest in the world. There's a reason US corporations have been fleeing the country for the past 30 years.
President Obama may even talk about corporate and individual tax reform and possibly even entitlement reform like Social Security.
He probably won't be particularly specific, but he'll likely say a few things that are friendly to business. After making the tax cut deal in December the President may have found a template to get re-elected. If the State of the Union address spins any of the above toward a more business friendly government it should be mildly positive for the markets.
We've got a quarter of the SP-500 reporting this week along with a ton of market moving economic events--the question is...
HOW DO WE MAKE MONEY ON IT?
We've got two trades lined up this week with some excellent potential.
The first is on an inverse ETF that looks ready to rocket to the moon. However we can take a very low cost--about a dollar--'both ways' position to protect us on the downside while leaving the door open for some big gains on the upside.
Our second trade is also skewed to the upside on a company with a very bullish chart that has taken a dip. This dip will likely be bought making us some great profits but just like our first trade we'll be protected in both directions.
We've got a turbulent market with two great set-ups to play it so let's get started...
For more information on everything you receive with your Pearly Gates subscription click on www.cashflowheaven.com/pg
Friday, January 21, 2011
If a stock wants to go in a certain direction it's kind of hard to stop that direction--no matter what the rest of the market is doing...
If a stock wants to go in a certain direction it's kind of hard to stop that direction--no matter what the rest of the market is doing...
Imagine an Advantage so Powerful You Can Make Money on the Downside---in an UP Market!
The trade you see below shows the power of trading 'relative weakness'--even in the face of a very bullish market.
Last Friday (January 14th), X was featured as the "short of the day". Subscribers could have purchased the January $55 puts for $1.25 and today they traded as high as $3.80. That is a 200% profit and in less than a week! You could have turned a $1250 investment into $3800 trading these options. We are finding great opportunities on both sides of the market.
Take advantage of relative strength and relative weakness with the Daily Report. It delivers two new trades each day and a Live Update table ranks all of the stocks in our watchlist so you'll know right where to look for the highest potential candidates. Subscribe now!
http://www.cashflowheaven.com/os/os_daily_report.html
Market Commentary - Yesterday, stocks staged their first meaningful decline since November. Once the downward momentum was established, buyers pulled their bids. Bullish sentiment has been off the charts and we were overdue for a correction.
This looks like nothing more than a little profit-taking. Earnings news has been decent--of the 35 companies that reported after yesterday’s close, only six missed estimates. That means 85% hit estimates or exceeded them. However most companies that reported earnings this week traded lower after their announcements. Evidently expectations are high.
Tech stocks are getting hit particularly hard. There are concerns that semiconductor inventory is building and we saw that again when Xilinx posted its numbers. F5 Networks had good results and the stock is down 25%. The guidance was not robust enough and traders are taking profits. This stock had doubled since July and fantastic news was priced in.
Banks had the potential to fuel this rally since they have lagged the market. Unfortunately, trading profits have been dismal. Financial institutions have been able to meet or beat expectations, but the quality of the earnings is poor. Banks are reducing bad loan reserves and investors are not very satisfied with that source of income.
Parker Hannifin is a cyclical stock and it beat estimates by 6%. The company benefited from a lower tax rate and when considering this adjustment, it actually missed estimates by three cents. The company said sales increased in each segment and it raised Q2 guidance. Even after this good news, the stock is down $4.00. That makes me wonder if cyclical stocks are topping out. This sector has been leading the market higher.
The economic news today was good. Initial jobless claims dropped to 404,000 from 441,000 the week before. Seasonal adjustments have run their course and employment conditions are gradually improving. Tomorrow’s LEI and Philly Fed should have little impact on the market. The focus will continue to be earnings and next week’s Durable Goods Orders and GDP should not have a major impact. The FOMC meeting is not likely to produce a move either since the Fed is steadfast in its quantitative easing.
Interest rates in Portugal, Spain and Italy are lower today. Credit concerns in Europe have eased temporarily so that situation is not weighing on the market.
Rising interest rates in Europe or a slowdown in China are the only two events that could cause a sustained market decline. Neither presents an immediate threat and this market pullback is nothing more than profit-taking. Prices should stabilize around SPY 126. If that level fails, we will test major support at SPY 123. I still feel that it is too early for a major meltdown and this pullback will eventually present a nice buying opportunity.
Credit concerns in Europe and state deficits in the US will take months to manifest. The strategy here is to patiently wait for more stocks to announce earnings in the next few days and then sell put spreads on companies that beat earnings estimates and provide robust guidance. Make sure your short strike is below support so you have added protection. For more information on selling put spreads go here: http://www.cashflowheaven.com/ws/own_secret.html
Or watch this video here: http://www.cashflowheaven.com/ws/watchthevideo.html
Better opportunities will present themselves in the next week. It's always smart to trade AFTER earnings are released. In looking through the Live Update table you can see fantastic opportunities on both sides of the market--and that tells us that volatility is about to rise. Given the cross currents, this has the potential to be one of the most exciting years of your trading career.
Trade well,
Pete
Imagine an Advantage so Powerful You Can Make Money on the Downside---in an UP Market!
The trade you see below shows the power of trading 'relative weakness'--even in the face of a very bullish market.
Last Friday (January 14th), X was featured as the "short of the day". Subscribers could have purchased the January $55 puts for $1.25 and today they traded as high as $3.80. That is a 200% profit and in less than a week! You could have turned a $1250 investment into $3800 trading these options. We are finding great opportunities on both sides of the market.
Take advantage of relative strength and relative weakness with the Daily Report. It delivers two new trades each day and a Live Update table ranks all of the stocks in our watchlist so you'll know right where to look for the highest potential candidates. Subscribe now!
http://www.cashflowheaven.com/os/os_daily_report.html
Market Commentary - Yesterday, stocks staged their first meaningful decline since November. Once the downward momentum was established, buyers pulled their bids. Bullish sentiment has been off the charts and we were overdue for a correction.
This looks like nothing more than a little profit-taking. Earnings news has been decent--of the 35 companies that reported after yesterday’s close, only six missed estimates. That means 85% hit estimates or exceeded them. However most companies that reported earnings this week traded lower after their announcements. Evidently expectations are high.
Tech stocks are getting hit particularly hard. There are concerns that semiconductor inventory is building and we saw that again when Xilinx posted its numbers. F5 Networks had good results and the stock is down 25%. The guidance was not robust enough and traders are taking profits. This stock had doubled since July and fantastic news was priced in.
Banks had the potential to fuel this rally since they have lagged the market. Unfortunately, trading profits have been dismal. Financial institutions have been able to meet or beat expectations, but the quality of the earnings is poor. Banks are reducing bad loan reserves and investors are not very satisfied with that source of income.
Parker Hannifin is a cyclical stock and it beat estimates by 6%. The company benefited from a lower tax rate and when considering this adjustment, it actually missed estimates by three cents. The company said sales increased in each segment and it raised Q2 guidance. Even after this good news, the stock is down $4.00. That makes me wonder if cyclical stocks are topping out. This sector has been leading the market higher.
The economic news today was good. Initial jobless claims dropped to 404,000 from 441,000 the week before. Seasonal adjustments have run their course and employment conditions are gradually improving. Tomorrow’s LEI and Philly Fed should have little impact on the market. The focus will continue to be earnings and next week’s Durable Goods Orders and GDP should not have a major impact. The FOMC meeting is not likely to produce a move either since the Fed is steadfast in its quantitative easing.
Interest rates in Portugal, Spain and Italy are lower today. Credit concerns in Europe have eased temporarily so that situation is not weighing on the market.
Rising interest rates in Europe or a slowdown in China are the only two events that could cause a sustained market decline. Neither presents an immediate threat and this market pullback is nothing more than profit-taking. Prices should stabilize around SPY 126. If that level fails, we will test major support at SPY 123. I still feel that it is too early for a major meltdown and this pullback will eventually present a nice buying opportunity.
Credit concerns in Europe and state deficits in the US will take months to manifest. The strategy here is to patiently wait for more stocks to announce earnings in the next few days and then sell put spreads on companies that beat earnings estimates and provide robust guidance. Make sure your short strike is below support so you have added protection. For more information on selling put spreads go here: http://www.cashflowheaven.com/ws/own_secret.html
Or watch this video here: http://www.cashflowheaven.com/ws/watchthevideo.html
Better opportunities will present themselves in the next week. It's always smart to trade AFTER earnings are released. In looking through the Live Update table you can see fantastic opportunities on both sides of the market--and that tells us that volatility is about to rise. Given the cross currents, this has the potential to be one of the most exciting years of your trading career.
Trade well,
Pete
Monday, January 17, 2011
Set Yourself Up to Knock Down a 14% Five Week Return with a over a 91% Probability of Success!
Greetings Fellow Secreteer,
Welcome to expiration week and the last newsletter for our January/February credit spreads. We have two new plays to enter before we close out the January/February playbook and move into the February/March time-frame. Again, as with every expiration week consider closing out any plays that have already earned most of their credit.
And, as mentioned in earlier editions, whenever a credit spread has less than $0.05 remaining, that’s a great time to close out the trade and “Take the Money and Run!”
Of course there’s always the “option” to just let them ride into expiration. If the options expire worthless, you'll be able to keep ALL the credit and pass on any new commissions. With as low as volatility has been that's not such a bad idea right now.
Finally, for our last entries in our February playbook, we’re looking at:
February
• 12.61% - 13.53% Return on Investment, 90.62% - 86.11% Probability of Win.
• 9.89% - 14.42% Return on Investment, 91.07% - 85.64% Probability of Win.
The Markets and How They Affect Us
For the 7th week in a row, the SP-500 has continued to ride the bull marking the longest rally since May 2007. This ride has been fueled by a one-two punch of continued optimism, strong quarterly earnings and European efforts to reign in their debt woes.
The economy is on a bullish trajectory, volatility is at all-time lows and there is an expectation that the world’s largest economy will continue to expand well into 2011. We’re definitely in an environment that lends itself to jumping into the stock market and we're finally seeing inflows to stock funds. It is now estimated that goods and services produced will grow by an additional 3% after rising 1.8% in 2010. This marks the first substantial gain we’ve seen in GDP in the last three years.
The big driver this month is earnings---analysts predict that they should increase by 14% in 2011 and, out of the seven companies in the S&P 500 that have released their results so far, six have already beaten analysts’ estimates.
In spite of all that good news we'll remain cautious; there’s not a lot of justification for further gains and it might not take much to spark a reversal--like maybe the news of a high profile CEO to getting sick. The recovery we’re experiencing is being driven by policy support. - in other words, the extension of the Bush-era tax cuts, renewed emergency jobless benefits, 2011 cut in payroll taxes, QE2 feeding the market a whole lot of cheap dollars, etc. If that support changes in any way this market could be a long ways in the air with no support.
We'll continue to let the market dance while we collect the gate--up, down or sideways, as long as the walls (our sold strikes) don't blow out we'll make money.
What are the Secrets of the Week?
Our 1st play is on an equity that offers a 12.61% - 13.53% return on investment with a 90.62% - 86.11% probability of win. Our 2nd play is also on an equity which offers a 9.89% - 14.42% return on investment with a 91.07% - 85.64% probability of win---so let’s get started...
You can get in on this week's trades along with two new high-probability trades per week by clicking here now: http://www.cashflowheaven.com/ws
God Bless and have an awesome trading week!
Robert
Welcome to expiration week and the last newsletter for our January/February credit spreads. We have two new plays to enter before we close out the January/February playbook and move into the February/March time-frame. Again, as with every expiration week consider closing out any plays that have already earned most of their credit.
And, as mentioned in earlier editions, whenever a credit spread has less than $0.05 remaining, that’s a great time to close out the trade and “Take the Money and Run!”
Of course there’s always the “option” to just let them ride into expiration. If the options expire worthless, you'll be able to keep ALL the credit and pass on any new commissions. With as low as volatility has been that's not such a bad idea right now.
Finally, for our last entries in our February playbook, we’re looking at:
February
• 12.61% - 13.53% Return on Investment, 90.62% - 86.11% Probability of Win.
• 9.89% - 14.42% Return on Investment, 91.07% - 85.64% Probability of Win.
The Markets and How They Affect Us
For the 7th week in a row, the SP-500 has continued to ride the bull marking the longest rally since May 2007. This ride has been fueled by a one-two punch of continued optimism, strong quarterly earnings and European efforts to reign in their debt woes.
The economy is on a bullish trajectory, volatility is at all-time lows and there is an expectation that the world’s largest economy will continue to expand well into 2011. We’re definitely in an environment that lends itself to jumping into the stock market and we're finally seeing inflows to stock funds. It is now estimated that goods and services produced will grow by an additional 3% after rising 1.8% in 2010. This marks the first substantial gain we’ve seen in GDP in the last three years.
The big driver this month is earnings---analysts predict that they should increase by 14% in 2011 and, out of the seven companies in the S&P 500 that have released their results so far, six have already beaten analysts’ estimates.
In spite of all that good news we'll remain cautious; there’s not a lot of justification for further gains and it might not take much to spark a reversal--like maybe the news of a high profile CEO to getting sick. The recovery we’re experiencing is being driven by policy support. - in other words, the extension of the Bush-era tax cuts, renewed emergency jobless benefits, 2011 cut in payroll taxes, QE2 feeding the market a whole lot of cheap dollars, etc. If that support changes in any way this market could be a long ways in the air with no support.
We'll continue to let the market dance while we collect the gate--up, down or sideways, as long as the walls (our sold strikes) don't blow out we'll make money.
What are the Secrets of the Week?
Our 1st play is on an equity that offers a 12.61% - 13.53% return on investment with a 90.62% - 86.11% probability of win. Our 2nd play is also on an equity which offers a 9.89% - 14.42% return on investment with a 91.07% - 85.64% probability of win---so let’s get started...
You can get in on this week's trades along with two new high-probability trades per week by clicking here now: http://www.cashflowheaven.com/ws
God Bless and have an awesome trading week!
Robert
AAPL CLIMBED HIGHER ALL WEEK DRIVING OUR 340/360 DEBIT SPREAD TO A FIVE-DAY THIRTY-PERCENT OPEN GAIN
This past week the markets continued their incredible climb higher--and our bullish play on Apple out-performed even this torrid market...
AAPL CLIMBED HIGHER ALL WEEK DRIVING OUR 340/360 DEBIT SPREAD TO A FIVE-DAY THIRTY-PERCENT OPEN GAIN!
With earnings on Apple's immediate horizon the stock should continue to drive higher-- and so should our profits.
The market has climbed a whopping 25% since August just five months ago and many are calling for a reversal. But with earnings season really heating up this week we've got the fuel to keep climbing---to get an idea where the profits are now let's take a good look at...
WHICH WAY THIS MARKET IS HEADED
The S&P-500 closed up 1.71% for the week stretching its streak to seven weeks---the longest winning streak since May 2007. The markets are looking extremely overbought but with some high-profile earnings coming out this week they could easily climb even higher. Uptrend support has now risen to 1275.
The Nasdaq posted a solid breakout on the strength in the chip sector after Intel's earnings Thursday. Apple and IBM report on Tuesday and are guaranteed to move big. Nothing suggests either company will disappoint and the excitement level is pretty high. If we do see a big spike higher it would not be surprising to see some selling into that strength--like we saw on Intel Friday.
This is a big week for the Q4 earnings cycle with the several of the tech blue chip companies reporting. The market is closed on Monday so there are no major reports but Apple and IBM are the big dogs on Tuesday followed by EBay and Goldman on Wednesday and Google on Thursday. Bank of America and General Electric close out the week on Friday.
The banks will produce some interest from traders but in general we already know they will beat estimates. After the JPM earnings on Friday those expectations are pretty strong. The earnings from Apple and Google will be highlights because of their exploding businesses and the competition between them. Expectations for Apple are off the charts but Google expectations are more subdued. IBM will be a key for the business sector because they are a corporate supplier rather than a consumer company. It should be an interesting week.
Earnings for Q4 for the S&P-500 are now expected to show 32% growth led by triple digit gains in the financial sector. Quite a few of the earnings reports this week are banks. Bank after bank beating estimates should produce some positive market sentiment.
Intel reported great earnings on Thursday and opened higher Friday morning but sellers quickly sold the stock to a loss. Intel did drive the chip equipment sector however with all the big names posting large gains on expectations of big capex spending in 2011. The 100% depreciation bonus in the tax bill is a huge incentive to buy equipment in 2011. KLA-Tencor (KLAC) rose +6%, Altera (ALTR) gained +6.4%, Novellus (NVLS) rallied +12% and Applied Materials (AMAT) jumped +7%.
JP Morgan reported earnings on Friday of $1.12 beating street estimates of one dollar a share. That compares to 74-cents in the year ago quarter. The +47% rise in earnings came on a revival in consumer banking and lower reserves for loan losses--a line we're likely to see repeated many times in the coming week.
This market is extremely bullish right now and this week's earnings could see some nice gains. Negative economic news at the open Friday was barely able to dent the indexes before dip buyers jumped in (on everything except Intel).
Inflation is starting to be seen in the Consumer Price Index jumping +0.5% last month--well over the +0.1% rise in prices for the prior month. This was the biggest jump since early 2009. Energy prices rose +4.6% in December and are now up +7.9% over the same period in 2010.
Food has not really spiked yet in the U.S. but given the rise in grain prices and the impact of grain not only on bread, flour and cereal but also on beef, chicken and other livestock we are going to see prices rise.
However because the core rate remains tame for the time being there is no worry the Fed will change its strategy--interest rates should stay contained for a few more months.
Also roiling the market Friday was a lower than expected Retail Sales number for December. The headline number came in at +0.6% compared to estimates for +0.8%. That was still the biggest rise since July. Sales closed the year at +7.9% over their year-ago level. Unfortunately most of that growth came in sales at service stations where fuel prices have been rising steadily.
So we've got extremely bullish market sentiment, several big earnings announcements this week and a market bumping up against resistance--the question is...
HOW DO WE MAKE MONEY ON IT?
We've got two high-potential trades lined up for this week. The first is on a well--know financial sector stock getting ready to announce earnings soon---and liable to ignite one-way or the other. The beauty of this trade is we can position ourselves 'both ways' buying all the way out to February for just .55 cents COMBINED! Heck if the stock sneezes we'll make a profit!
Our second trade has one of the most beautiful chart set-ups for an explosive move higher you've ever seen--and we can buy some in-the-money calls for less than 1.50 on a stock that trades over fifty dollars and is launching higher for what looks to be some stellar profits!
This is earnings season and we've got some explosive potential--so let's get moving...
For more information on everything you receive with your Pearly Gates subscription click on www.cashflowheaven.com/pg
AAPL CLIMBED HIGHER ALL WEEK DRIVING OUR 340/360 DEBIT SPREAD TO A FIVE-DAY THIRTY-PERCENT OPEN GAIN!
With earnings on Apple's immediate horizon the stock should continue to drive higher-- and so should our profits.
The market has climbed a whopping 25% since August just five months ago and many are calling for a reversal. But with earnings season really heating up this week we've got the fuel to keep climbing---to get an idea where the profits are now let's take a good look at...
WHICH WAY THIS MARKET IS HEADED
The S&P-500 closed up 1.71% for the week stretching its streak to seven weeks---the longest winning streak since May 2007. The markets are looking extremely overbought but with some high-profile earnings coming out this week they could easily climb even higher. Uptrend support has now risen to 1275.
The Nasdaq posted a solid breakout on the strength in the chip sector after Intel's earnings Thursday. Apple and IBM report on Tuesday and are guaranteed to move big. Nothing suggests either company will disappoint and the excitement level is pretty high. If we do see a big spike higher it would not be surprising to see some selling into that strength--like we saw on Intel Friday.
This is a big week for the Q4 earnings cycle with the several of the tech blue chip companies reporting. The market is closed on Monday so there are no major reports but Apple and IBM are the big dogs on Tuesday followed by EBay and Goldman on Wednesday and Google on Thursday. Bank of America and General Electric close out the week on Friday.
The banks will produce some interest from traders but in general we already know they will beat estimates. After the JPM earnings on Friday those expectations are pretty strong. The earnings from Apple and Google will be highlights because of their exploding businesses and the competition between them. Expectations for Apple are off the charts but Google expectations are more subdued. IBM will be a key for the business sector because they are a corporate supplier rather than a consumer company. It should be an interesting week.
Earnings for Q4 for the S&P-500 are now expected to show 32% growth led by triple digit gains in the financial sector. Quite a few of the earnings reports this week are banks. Bank after bank beating estimates should produce some positive market sentiment.
Intel reported great earnings on Thursday and opened higher Friday morning but sellers quickly sold the stock to a loss. Intel did drive the chip equipment sector however with all the big names posting large gains on expectations of big capex spending in 2011. The 100% depreciation bonus in the tax bill is a huge incentive to buy equipment in 2011. KLA-Tencor (KLAC) rose +6%, Altera (ALTR) gained +6.4%, Novellus (NVLS) rallied +12% and Applied Materials (AMAT) jumped +7%.
JP Morgan reported earnings on Friday of $1.12 beating street estimates of one dollar a share. That compares to 74-cents in the year ago quarter. The +47% rise in earnings came on a revival in consumer banking and lower reserves for loan losses--a line we're likely to see repeated many times in the coming week.
This market is extremely bullish right now and this week's earnings could see some nice gains. Negative economic news at the open Friday was barely able to dent the indexes before dip buyers jumped in (on everything except Intel).
Inflation is starting to be seen in the Consumer Price Index jumping +0.5% last month--well over the +0.1% rise in prices for the prior month. This was the biggest jump since early 2009. Energy prices rose +4.6% in December and are now up +7.9% over the same period in 2010.
Food has not really spiked yet in the U.S. but given the rise in grain prices and the impact of grain not only on bread, flour and cereal but also on beef, chicken and other livestock we are going to see prices rise.
However because the core rate remains tame for the time being there is no worry the Fed will change its strategy--interest rates should stay contained for a few more months.
Also roiling the market Friday was a lower than expected Retail Sales number for December. The headline number came in at +0.6% compared to estimates for +0.8%. That was still the biggest rise since July. Sales closed the year at +7.9% over their year-ago level. Unfortunately most of that growth came in sales at service stations where fuel prices have been rising steadily.
So we've got extremely bullish market sentiment, several big earnings announcements this week and a market bumping up against resistance--the question is...
HOW DO WE MAKE MONEY ON IT?
We've got two high-potential trades lined up for this week. The first is on a well--know financial sector stock getting ready to announce earnings soon---and liable to ignite one-way or the other. The beauty of this trade is we can position ourselves 'both ways' buying all the way out to February for just .55 cents COMBINED! Heck if the stock sneezes we'll make a profit!
Our second trade has one of the most beautiful chart set-ups for an explosive move higher you've ever seen--and we can buy some in-the-money calls for less than 1.50 on a stock that trades over fifty dollars and is launching higher for what looks to be some stellar profits!
This is earnings season and we've got some explosive potential--so let's get moving...
For more information on everything you receive with your Pearly Gates subscription click on www.cashflowheaven.com/pg
Monday, January 10, 2011
This Week You Can Set Yourself Up to Knock Down a 13% Six Week Return with over an 88% Probability of Success!
While most pundits are popping champagne corks over the economy the combination of high unemployment and uncertainty confirms our shrewdly conservative market neutral approach. The recession rocking the foundations of the economy is the best WAKE-UP call we could get to take the reins of our own financial future. While the government may be focusing on new ways to accelerate the country’s hiring and growth we'll be focusing on ways to accelerate our own growth.
February
• 7.53% - 13.38% Return on Investment, 87.68% - 91.78% Probability of Win.
• 11.86% - 13.07% Return on Investment, 88.91% - 88.27% Probability of Win.
The Markets and How They Affect Us
It is now projected that the Federal Reserve’s two rounds of asset purchases, totaling $2.3 trillion, will increase private sector payrolls by about 3 million jobs by 2012. The decision to start a 2nd round of purchases is intended to prevent the economic recovery from stumbling into a pot hole – the Fed's stated goal being maximum employment and price stability--but some wonder if they are just trying to pay the governments 'road to hell' bar tab.
Oddly enough, even with an improving economic outlook, the Fed's most recent meetings show that they aren't willing to scale back their plans to purchase $600 billion in Treasuries. Republican lawmakers along with officials in China, Germany and Brazil have criticized these purchases citing that they weaken the dollar and give rise to asset-price bubbles.
The U.S. reported fewer jobs being added in Friday's Non Farm Payroll Report (103,000) than was originally forecasted (150,000) which confirms the Fed Chairman’s opinion that it would take another 4 – 5 more years for the labor market to completely rebound. As GDP growth continues to accelerate, we’re like to see moderate improvements in the labor market; however, it will be a long time before the Fed changes their course and some wonder if they can. With a Federal debt exceeding 12 trillion any sizeable interest rate increase would cripple the government's finances (and you thought your adjustable rate mortgage was a problem!).
So we've got a market that continues to climb propped up by an ever-increasing stream of 'free dollars'--sounds like fun (for awhile). The question is--how do we make money on it?
What are the Secrets of the Week?
We have two new plays for the week –Our 1st play of the week is on an oil company that offers us a sweet 7.53% - 13.38% return on investment with a 87.68% - 91.78% probability of win. Our 2nd play is on a country ETF that offers an outstanding 11.86% - 13.07% return on investment with a 88.91% - 88.27% probability of win.
You can get in on this week's trades along with two new high-probability trades per week by clicking here now.
God Bless and have an awesome trading week!
Robert
February
• 7.53% - 13.38% Return on Investment, 87.68% - 91.78% Probability of Win.
• 11.86% - 13.07% Return on Investment, 88.91% - 88.27% Probability of Win.
The Markets and How They Affect Us
It is now projected that the Federal Reserve’s two rounds of asset purchases, totaling $2.3 trillion, will increase private sector payrolls by about 3 million jobs by 2012. The decision to start a 2nd round of purchases is intended to prevent the economic recovery from stumbling into a pot hole – the Fed's stated goal being maximum employment and price stability--but some wonder if they are just trying to pay the governments 'road to hell' bar tab.
Oddly enough, even with an improving economic outlook, the Fed's most recent meetings show that they aren't willing to scale back their plans to purchase $600 billion in Treasuries. Republican lawmakers along with officials in China, Germany and Brazil have criticized these purchases citing that they weaken the dollar and give rise to asset-price bubbles.
The U.S. reported fewer jobs being added in Friday's Non Farm Payroll Report (103,000) than was originally forecasted (150,000) which confirms the Fed Chairman’s opinion that it would take another 4 – 5 more years for the labor market to completely rebound. As GDP growth continues to accelerate, we’re like to see moderate improvements in the labor market; however, it will be a long time before the Fed changes their course and some wonder if they can. With a Federal debt exceeding 12 trillion any sizeable interest rate increase would cripple the government's finances (and you thought your adjustable rate mortgage was a problem!).
So we've got a market that continues to climb propped up by an ever-increasing stream of 'free dollars'--sounds like fun (for awhile). The question is--how do we make money on it?
What are the Secrets of the Week?
We have two new plays for the week –Our 1st play of the week is on an oil company that offers us a sweet 7.53% - 13.38% return on investment with a 87.68% - 91.78% probability of win. Our 2nd play is on a country ETF that offers an outstanding 11.86% - 13.07% return on investment with a 88.91% - 88.27% probability of win.
You can get in on this week's trades along with two new high-probability trades per week by clicking here now.
God Bless and have an awesome trading week!
Robert
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