If You Followed My Advice You Are Long Calls and You Are Making A Kiling Today. New High

January 15, 2014
Author: Peter Stolcers, Founder of OneOption

If you followed my comments yesterday, you are making a killing today. Most of the commentators were calling for a correction. The S&P is up 30 points in the last 24 hours. Please CLICK HERE and post a review on Investimonials. My goal is to have 200 five-star reviews and your comments inspire me to keep this going. The year started off on a soft note and all of a sudden everyone started calling for a correction. It is funny that no one questioned the melt up in the last few weeks of the year. As I explained yesterday, this was nothing more than a light round of selling. The news had gotten "heavy" and buyers pulled their bids. They got tired of supporting the market after Fed Speak, a weak jobs report and dismal retail performance. There was a slight rotation out of stocks and into bonds. That got the ball rolling and it flushed bullish speculators out of their positions. If you followed my advice yesterday, you are making great money and you are in at an excellent price level. The market barely probed for support and it never got close to SPY $181.50. Buyers instantly stepped in. In yesterday's chart, I outlined a similar pattern that we saw a few weeks ago. I have included that chart again. The market rallied to a new high, it challenged that high and when it couldn't advance, the breakout was tested. That support held and we sling-shoted in to a new high. We are seeing a same pattern this week. I did not know for sure that we would pullback, so I bought some calls last week. I kept my size small so that I could add. Monday we got the pullback and I was much more aggressive in my call purchasing. Bank stocks have performed well after posting earnings. J.P. Morgan, Wells Fargo and Bank of America are moving higher. This is critical because financial stocks dominate the scene during the first part of the earnings cycle. This will set a very positive tone and I have been pointing to this catalyst the last week. Some of the "fluff" has been taken out of the high-fliers and they have room to run. Major tech companies will be on deck soon and that will attract buyers. I am also expecting strength in cyclicals. Europe has been a drag on global markets for years. Their PMI was better than expected last month and industrial production was better than expected yesterday. This bodes well for next week's flash PMI numbers. Any improvement in Europe will fuel this rally. Central banks are printing money and credit concerns are low. The Fed will continue to taper and it is dismissing last week's jobs report. The Street knows this number will be revised since it is contrary to every other economic data point. This morning, Empire Manufacturing came in better-than-expected. Companies are lean and mean and cash flows will hit record levels. Over 6% of the daily market activity is related to buybacks. Revenues will be flat, but profits will be strong. Republicans will stay out of the headlines and they will extend the debt ceiling. The market will discount this event until the last minute. You should be long February calls. Add if the SPY closes above $184.50 today. Focus on stocks that are breaking out. The hour is late and if you are not long - buy some calls today. The market should continue to creep higher this week. I don't see any issues and I am expecting to see SPY $190 by the end of the month. . . image

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