When the Market is Rising You HAVE to Take Advantage of this Strategy

Stocks give clues to an impending breakout--and if you position yourself ahead of time you can make a fortune...

When the Market is Rising You HAVE to Take Advantage of this Strategy

When a stock is trending higher AND has a potentially positive news event on the horizon you can position yourself ahead of time for some fantastic profits.

Here is a great example---Two weeks ago (September 8th), MHS was featured as the "long of the day" because they have a beautifully up-trending chart and as a pharmacy benefit management provider they stand to really benefit from the new national healthcare plan. Sure enough today Newton Juhng from FBR Capital Markets upgraded the stock and it took off like a rocket making subscribers a quick fortune.

When the stock was added to the Daily Report subscribers could have purchased the October $47.50 calls for just $1.00. Today, those same calls launched as high as $5.20 turning a modest $1000 investment into more than $5000 dollars!

That's an astounding 400% winner in just 2 weeks!

This market has more room to run. Sign up for the Daily Report and you'll get two new stock picks each day and access to the Live Update table that shows you exactly what to trade. Get your subscription along with a Trading Package that puts your new money machine on autopilot by clicking right here.  http://www.cashflowheaven.com/os


Market Commentary - The market has rallied 8% in less than three weeks and it looked a little tired this morning. It has ignored deteriorating economic data and weak seasonality for good reason. Interest rates are at historic lows and stocks are attractively priced.

This week, the FOMC released its statement. It gave the market exactly what it wanted and stocks were able to push through horizontal resistance at SPY 113. The Fed cited weakening economic conditions and they hinted that quantitative easing (QE2) might be around the corner--a strategy that would weaken the dollar and help our exports.

This morning, initial jobless claims came in at 465,000. Last week’s number was also revised higher and both pieces of information weighed on the market. As long as the unemployment scene does not deteriorate too badly, the market could easily move higher. In this jobless recovery, money is shifting out of bonds and into stocks.

Tomorrow, durable goods orders will be released. This is a very volatile number and traders tend to take it with a grain of salt. The demand for big-ticket items has declined 3 straight months and worst-case scenarios are priced in. The economic calendar will be quiet in the early part of next week and then starting Thursday, it will build.

On September 30, GDP, initial claims and Chicago PMI will be released. On Friday, personal income, consumer sentiment, construction spending and ISM manufacturing will be released. GDP was revised down from 2.4% to 1.6% a month ago and analysts expect it to remain at 1.6% so this low number should not have much of a market impact. Perhaps the most interesting number will be ISM manufacturing. It increased more than expected last month, contradicting Empire Manufacturing, the Philly Fed and Chicago PMI. However it is likely to decline and last month’s number will be revised lower.

China’s PMI will also influence trading Friday morning. The Chinese government halted steel production for 20 days, fearing an inventory buildup. If this number is anywhere near 50, the market will decline. All hopes of an economic recovery are tied to China. This is truly the one potential “fly in the ointment” and could quickly spoil this rally.

In two weeks, ISM services, ADP Employment, initial claims, wholesale inventories and the Unemployment Report will be released. ISM services fell to 51.5 and that is just above the level that signals economic contraction. The service sector accounts for 80% of our economic activity and it is a very important number. Jobless claims have been improving slightly and that should bode well for the employment number.

Interest rates in Europe are rising and that is a future warning sign. The demand during recent bond auctions has been strong and fears of a European credit crisis have eased but that could change very quickly.

On a technical basis, the market closed below major support at SPY 113 today--a short-term sell signal--we could be in for some more downside before the rally resumes.

Asset Managers are waiting for a pullback so that they can “buy-in”---with everyone lining up with the same game plan any pullback should be short and shallow.

Companies with pricing power (chemicals, commodities) are performing well. Option implied volatilities are cheap which is a good time to buy options. Get a great play list lined up with the strongest stocks by subscribing to the Daily Report now BEFORE this dip bottoms and rebounds higher.

Trade Well,

Pete