OUR BRAND NEW DELL PUTS JUST SURGED THIRTY-SIX PERCENT LAST WEEK ALONE!

This past Thanksgiving week has given us plenty to be thankful for...

SPECIFICALLY OUR BRAND NEW DELL PUTS JUST SURGED THIRTY-SIX PERCENT LAST WEEK ALONE!

PLUS OUR PUTS ON WELLS FARGO (WFC) JUMPED A RESPECTABLE FOURTEEN PERCENT!

And by the looks of both their charts there is a lot more profit waiting this coming week. We've also got two bullish plays that pulled back a bit but both positions still look promising so it's likely we'll do well on those as well.

We've got some great plays lined up and a market that seems to be teetering on a new direction--but which way will it be? To find out let's take a good look at...

WHICH WAY THIS MARKET IS HEADED

Despite the down-spikes in the charts above the volume on Friday was only 4.5 billon shares across all exchanges. This was the LOWEST daily volume in over a year. It does not invalidate Friday's losses but it does mean we could see a nice rebound this week and not the implosion Friday's action implies.

Monday is month end and typically the last day and the first two days of a month are bullish. There will likely be some reassuring news out of Dubai that will counteract Friday's action. However the Nasdaq and Russell will have to hold their ground for any positive sentiment to be effective--they are both teetering at critical support.

The key is to see if the Dubai debt problem spreads. Deutsche Bank said Dubai borrowed more than $80 billion in a four-year construction boom and that boom has gone bust. Commercial property values are down -50% from their 2008 peak. Over 1,000 projects have been halted and construction terminated. Anyone holding a loan on one of these projects is in serious trouble.
Arnab Das, head of market research and strategy for Roubini Global Economics said, "Central banks around the world may have stabilized the financial system but you can't make all the excesses disappear and Dubai had a lot of excesses." Abu Dhabi Commercial Bank has a large exposure to Dubai World and that is not the first problem they have had in the region. Two Saudi Arabian families defaulted on loans earlier this year totaling more than $610 million.

The fact is the news on Dubai World broke on Wednesday but nobody in the U.S. paid much attention. It was only after Europe and Asia crashed on Thursday that U.S. investors decided locking in gains before the weekend might be a good idea. Europe crashed because the majority of loans to Dubai World and the UAE in general came from European banks. Some of those banks were down more than 10% on Thursday rippling out to other overseas markets on Friday. We'll see this week but there is a good chance the U.S. market decline on Friday was just a knee jerk reaction to the two days of European/Asian action.

This week we've got several big economic reports. There are four ISM reports with the national manufacturing index on Tuesday and we'll get the Fed Beige Book on Wednesday with another economic view of the various Fed regions.

Friday is the big event with the Non-Farm Payroll report for November. The official consensus estimate is for an improvement to a loss of -145,000 jobs from -190,000 jobs in October. However, the latest analyst numbers are becoming more bullish. Morgan Stanley is expecting an improvement to a loss of only -90,000 jobs and a +100,000 revision to October. We saw new Jobless Claims fall to 466,000 last week so Morgan may not be that far off. Claims have been declining since March but appear to have accelerated lower over the last month--a bullish sign.

Another bullish sign is retail sales this holiday season--the National Retail Federation's survey, conducted over the weekend, found that 195 million shoppers visited stores and Web sites, up from 172 million last year, but the average spent was about $343, down from about $373 a year ago. For the weekend, the total spending figure is an estimated $41.2 billion.

Also Black Friday was the second-heaviest day in online spending to date in 2009 with $595 million in online sales, comScore Inc. reported today. That's 11% higher than last year's Friday after Thanksgiving. The actual holiday saw 10% higher e-commerce sales, totaling $318 million, comScore added.

The National Retail Federation also announced today that more Americans will go online to do holiday shopping on the Monday after the Black Friday weekend than they did last year. On Cyber Monday, 96.5 million people plan to shop, up from 85 million a year ago, the retail-trade group said citing a Shop.org survey. Nine in 10 retailers also will have special deals and promotions for Cyber Monday, the survey said.

There is reason to be cautiously bullish this week but the Dubai event is not over. Dubai reminds us that there are still problems in the world and that could prompt money managers to take profits. The markets were making new highs last week before Dubai but with a little 'damage control' out of the region stocks could easily spring higher again--the question is...

HOW DO WE MAKE MONEY ON IT?

When the markets were going straight up picking stocks was relatively easy--but in this up and down market it's more important to focus on what is really moving--and in which direction. Which is why for this week we've got both a bullish pick and a bearish pick.

Our bullish pick is on a stock that is growing business in spite of the downturn and investors love it. In looking at the chart jumping on this stock will be like hopping on an escalator--it just keeps plowing higher no matter what the rest of the market is doing. In fact it went up again on Friday while everything else was falling--a strong sign of relative strength. We'll be taking advantage of this relentless move higher with some well placed calls first thing Monday morning.

Our next play is just the opposite--the stock just broke critical support and now looks like a plunge waiting to happen--and it's not hard to see why. The company just lowered their forecasts going forward and investors are selling--the perfect scenario for some fat and juicy put profits!

We've got two great set-ups on a market ready to move--so let's get to it...

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