EOT Position Update – December 23, 2009

December 23, 2009

Market Snapshot

Merry Christmas… The Santa Clause rally’s in full effect.

All three of the major averages are higher this week.  The tech heavy NASDAQ is leading the way.  Semis and software companies are surging higher as the economic indicators signal strong growth.

The big news is the US Dollar.  Its nine month free fall has come to an end… at least temporarily.

Amazingly, the dollar’s rally isn’t slowing the stock market’s advance.  I think this is a very bullish sign the market rally still has room to run.  However, the US Dollar’s strength hasn’t been kind to gold.  An ounce of gold is now off 12% from the highs of a few weeks ago.

The charts are telling me the US Dollar’s rally and gold’s decline could be coming to an end.

You see, the recent rally has pushed the US Dollar back to resistance of the June lows.  And gold has fallen back to support of the October highs.  I wouldn’t be surprised to see the long term trend of a falling US Dollar and rising gold prices resume from here.

Remember – Option ticker symbols are changing… I talked about it in last week’s update.  For more info, you can also call your broker.

Now for the updates…

Position Updates

Just a quick note:  Remember, we won’t update every open position every week.  I try to focus on the positions that have some significant news or price movement.

  CSCO Apr 2010 $24 CALLS 
CSCO is a new trade we sent out this morning.  Check the email or website for more details.  Resistance is at $26 and $29.  Support is at $22.50 and $20.

As I said in last week’s update, option symbology is changing so we won’t be referencing the old five character ticker.  The easiest way to look up the option will be through the option chain.  Check with your broker if you need assistance.

  NVDA Mar 2010 $15 CALLS (UVACC)
NVDA’s bullish momentum is propelling the stock and our option to new highs.  It’s amazing how the prospect of a level playing field is turning investors extremely bullish on Intel’s (INTC) competitors.  In just two weeks, NVDA’s shot through our first resistance level at $18.  Conservative traders should lock in a huge 116% gain now!  Aggressive traders may want to hold tight, this one has plenty of room to run. The next resistance is at $20.  Support is at $13 and $12.

  SBUX Apr 2010 $22 CALLS (SSUDV)
SBUX shot through our first resistance on Friday.  SBUX is trading around $23.75. Conservative traders should have locked in a solid 86% gain!  Aggressive traders should hold tight for bigger gains ahead.  The next resistance is at $26.  Support is at $18.50 and $17.

  VIT Feb 2010 $17.50 CALLS (VITBW)
VIT broke through its short term downtrend yesterday.  This is a bullish signal the stock and our option could be heading higher quickly.  The long term trend is higher. We could see some selling pressure as the stock nears the previous highs.  But they should only be minor hurdles on the way to our resistance levels at $21 and $22.50. Support is at $14.50 and $12.65.

  MCRS Mar 2010 $30 CALLS (MFKCF)
MCRS is consolidating in a tight range after jumping higher on an analyst upgrade.  I wouldn’t be surprised to see another quick move higher once a new base is established at current levels.  Aggressive traders should hold on for the next move higher.  The next resistance is at $33.  Support is at $25 and $22.50.

Category: EOT Update