EOT Position Update – January 12, 2011

| January 12, 2011

January 12, 2011

Market Snapshot

Investors are feeling good…

The IBD/TIPP Economic Optimism Index hit a 16-month high in January.  It shot up more than 13% from December and is now indicating outright optimism about the economy and the stock market.

And here’s the best part…

The IBD/TIPP Index is a good leading indicator for consumer confidence reports put out later in the month.  If consumer confidence gets a good pop, it could be just the thing markets need to extend their bullish momentum.

What’s behind the good mood?

The extension of the Bush tax cuts and unemployment benefits, as well as the shift in control of Congress, are helping.  It’s clear that a bit of certainty has everyone feeling confident.  And it’s especially impressive in light of surging prices at the gas pump.

With investors feeling good and earnings season off to a good start, the markets seem destined to march higher.  And that’s great news for our call options.

Let’s move onto 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.

  DO June 2011 $79.25 Calls
DO is our latest trade we sent out last Friday.  Oil prices are pushing into the mid $90s per barrel.  And Oil & Gas companies are surging along with oil prices.  We’re off to a great start so far.  But the best is yet to come.  Hold tight for bigger gains ahead. Resistance is at $80 and $85.  Support is at $64 and $62.

  AUY April 2011 $12 Calls
AUY is mirroring the recent volatility in gold prices.  Management announced 2011 production should increase to 1.04 to 1.14 million ounces.  And growth should accelerate in 2012 and 2013.  That’s great news… Hold tight for the next leg higher. Resistance is at $14 and $17.  Support is at $11 and $10.

  BAC May 2011 $13 Calls
BAC continues to churn higher.  The major US banks are leading the Dow Index.  Clearly investor optimism is giving the entire sector a nice boost.  Our option is up an amazing 140% so far.  Keep an eye on this one as it approaches our next resistance at $17.  Support is at $11 and $10.

  CNH June 2011 $55 Calls
CNH has popped up over the last few days.  Our option has almost doubled… Management will announce 4th quarter earnings on January 27th.  I’m expecting blow out numbers from the agricultural equipment maker.  Conservative traders should keep an eye on it as it approaches our first resistance level.  Resistance is at $54 and $60. Support is at $35 and $31.50.

  ADBE January 2011 $27 Calls
ADBE has grabbed the bull market by the horns.  It shot past our second resistance level today.  Congratulations to everyone pocketing jaw dropping 298% gains!

Category: EOT Update

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