This Regional Bank's Stock Could Drop to Zero...

Everyone is clinking champagne glasses that 'the worst is behind us'--but all those folks could be in for a rude surprise as the next wave of bank failures hits...

This Regional Bank's Stock Could Drop to Zero...

Last Friday three more regional banks went bankrupt--and if you were holding puts on those banks you made a fortune. Last Friday we zeroed in on another bank that might not make it and even in this bull market the thing has been trading straight down. When we featured the trade subscribers could have purchased the September $35.00 puts for $1.75. Yesterday, those puts traded as high as $4.60 catapulting a $1,750 trade into $4,600 in just 4 days!

The thing is--by the looks of the chart this stock could go to zero turning even a modest investment into a fortune on the right puts.

After the kind of profits we've seen in just the past four days we'd normally give out the name of this stock so you could check it out for yourself--but the potential profits on this one are just too big and it would be a disservice to you to not encourage you to get ALL of our picks. If you got into this stock last Friday you could have made an easy $2,850--an amount that could have paid for your subscription for over three years if you got the Options Success Trading Package with your subscription.

Current banking analyst estimates are for 200 to 300 regional banks to fail within the next 12 months and when they do put buyers are going to rack up some outrageous gains--and you can start right here with the stock you see below. Heck the thing even popped higher today giving you a chance to get in for a song if you get in right away. Subscribe to the Daily Report, get the Package and get started shorting this bank teetering on a major meltdown. And the really inspiring news is--there are plenty more trades with this kind of potential where this one came from.

Market Commentary - The market feels like it’s running out of steam and we saw signs of that last week. Ben Bernanke was reappointed as the Fed Chairman and that should have provided a big boost to the market. Durable goods orders rose 2.4% (much better than expected) and Q2 GDP came in at -1% (better than expected). Dell posted better-than-expected earnings and Intel substantially raised guidance. With all of the positive news, the market was barely able to tread water.

Tuesday, ISM manufacturing increased more than expected to 52.9. That indicates economic expansion. Construction spending came in below estimates, but residential building was better-than-expected. Pending home sales rose 3.2% and that was also ahead of estimates. After an initial rally, the market quickly reversed. The market slipped into a nasty decline and by the close the S&P 500 futures were down 25 points. In the process, we fell below the breakout at SPY 101.

Unemployment is the focal point this week and nervousness ahead of tomorrow’s number sparked profit-taking on Tuesday. Initial jobless claims have been struggling the last four weeks and there is a chance that tomorrow’s number will disappoint. Today, jobless claims came in at 570,000 (560,000 were expected). The four-week average is a good indicator for the unemployment trend and 4000 jobs were shed from that calculation this week. Continuing claims rose 90,000 and it stands at 6.23 million. Yesterday, the ADP employment index showed that 298,000 jobs were lost in August. While that is a big improvement from the 360,000 jobs that were lost in July, analysts were looking for a much better number. I suspect that the unemployment rate will rise tomorrow and the number will be worse than expected. However, after Tuesday’s decline, much of the bad news might already be factored in.

This morning, retailers reported mixed results. Deep discounters fared the best as consumers continue to hunt for bargains. Overall, same-store sales dropped 2.9% in August.

ISM services came in at 48.4 today and that was better than expected. A number above 50 indicates economic expansion and we are close to seeing that. Almost 80% of our workforce is tied to services and this is a very important number. The market has had a decent reaction and stock prices are stable.

Overnight, the ECB said that it is seeing signs of an economic recovery. Their overall activity only dropped .1% in Q2. Next year, they project a .2% growth rate.

Light holiday trading has set in and we can expect that to continue into next week. Initial claims and consumer sentiment are the primary economic releases next week and they are not major market movers. The Treasury will hold 3-year, 10-year and 30-year bond auctions next week. Interest rates have been declining and the demand should be good. All in all, we are setting up for quiet trading.

September is the weakest month of the year and we saw some profit-taking this week. The news has generally been good and there is no other explanation for the decline. The path of least resistance is up and I suspect that we will see a pullback and a very sharp snap back rally. As long as SPY 96 holds maintain a bullish bias. We just posted two brand new trades designed to take advantage of this market choose your Package and Subscription term here.

Trade well,

Pete