1000% Profit in One Week--Relative Strength is Like Money in the Bank...

Combine a bull market with relative strength and the options profits can be huge...

1000% Profit in One Week--Relative Strength is Like Money in the Bank...

Last Thursday we featured Anadarko Petroleum (APC) as the "long of the day" for one reason--relative strength. Back then we wrote: "...natural gas jumped and that has this stock moving. It is strong relative to oil and it is breaking out to a new 52-week high. The dollar is also getting crushed and that is helping oil move higher."

Plus the chart looked great. Subscribers could have purchased the September $60.00 calls for just $.55 cents. Today those calls traded as high as $6.10. You could have had your own gusher by launching a $550 trade into a whopping $6,100 in just one week!
Subscribers are making a killing as the bullish stocks on our Watch List are absolutely rocketing higher---APC is just one example.

Subscribe to the Daily Report to take advantage of this amazing rally and get the Trading Package for maximum 'hands-free' profitability. To access an entire list of the kind of potential you see below Click Here Now.

Market Commentary - Last week we suspected that quadruple witching could play an important role this week. Once the upward momentum established itself, option expiration fueled the rally. The market convincingly made a new high for the year and prices closed right on their high of the day Wednesday. Option volume was very heavy and there is a speculative feel to the price action.

Many traders have been looking for seasonal weakness in September and they have been left behind. Likewise, Asset Managers who are under allocated have been scrambling to place money. They are getting more and more aggressive and that is why the two small dips in the last two months have been shallow and brief.

The market has all the ammunition it needs to move higher. Earnings beat expectations by a large margin last quarter and we are likely to see earnings growth in Q3 due to easy comparisons from a year ago. This alone could fuel a year-end rally if the market does not get ahead of itself. Interest rates have been drifting lower and the massive bond auctions have gone well. The Fed is also committed to keeping rates low. Inflation is not putting upward pressure on yields and this week the CPI and PPI were tame. Economic statistics continue to show gradual improvement and the numbers are “less bad”.

This morning, initial jobless claims were 545,000 and that was better than expected. The week-to-week numbers fluctuate and most analysts follow the four-week moving average. That average fell by 8700 this week and it now stands at 563,000. Housing starts rose 1.5% and building permits climbed 2.7%. The deep trough in the housing cycle may have hit bottom.

The economic releases next week include LEI, initial jobless claims, durable goods, existing home sales and consumer sentiment. All have shown gradual improvement in recent months. Durable goods orders should increase because of cash for clunkers, but traders will see through that temporary spike. The FOMC will also meet next week. Their comments have not changed much in the last few months and their policy should remain bullish as they are likely to keep rates low.

The option expiration rally this week is starting to feel a bit frothy. Prices are likely to move higher right into the close on Friday. However, if we rally another 30 S&P 500 points, we are likely to hit resistance and we could see a pullback early next week. This market has tremendous upside momentum and it would be wise to avoid trying to pick a top. If you have bullish positions, set targets and scale out on strength. Be patient and wait for a pullback to reenter. This strategy has worked very well since May.

Expect choppy trading with a bullish bias the rest of the week. The momentum is strong and the volume is returning. This will be an exciting fall season!

Trade well,

Pete