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Good Taco Tuesday to everyone... We're seeing a little continued weakness in the major indexes as I type this morning. Thought I'd let you know I did end up purchasing some QQQ February puts toward the close yesterday. My stop loss is set at yesterday's high so we'll see. You may want to do the same. It's a bit of a risky play as I'm fading against the recent run-up but that's what you have to do sometimes when you're conviction for a reversal is there. I hate to sound like a broken record but I just don't buy this market's move of late. Volume has been anemic at best, the TRIN is sleeping as is the VIX so the markets are too quiet for no good reason.

We're in the midst of major bellwethers reporting, Europe is unstable and our own economic backdrop is shaky. Will Wall Street climb a wall of worry? It could but I think that's what it has done since April of 2009. I think we need a real shake-up before we go higher. Basically, "we're in a stock picker's market". That's what I always hear the CNBC pundits saying so I just thought I'd throw that in there for no reason whatsoever... because I'm being totally sarcastic. Aren't we always in a stock picker's market? Last time I checked, no matter what market we're in, stocks go up and stocks go down so I'd call that a stock picker's market. Ha.

With that being said, I thought I'd give you a one paragraph update on each of our open trading ideas as well as our Featured Stocks list, so here goes...

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Morning All... With options expiring at the end of last week, it's no surprise we're seeing the markets reverse their tone going into the new week. The BIG question now becomes will this market finally decide to pull back in the short-term in an effort to back and fill for more upside in the near future? I would think so considering the recent run-up has been on less than favorable volume and we're in the midst of a very important earnings season.

So far, everything has panned out as we thought it would. The NDX took a new 52 week high last week while the S & P and the DOW continue to make the same attempt. We'll likely want to enter into some put options on any strength to the upside over the next couple of days. I'd really prefer not to chase this move down so we'll be prudent and keep a close eye. Once we decide a favorable entry, we'll let you know. Let's see how the close today treats the current downside momentum.

There's No Stopping CDXC Right Now

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TGIF folks. So Google (GOOG) finally missed, eh? They are entitled, considering I can't ever remember them missing their targets since inception. Probably a healthy pullback in order but I wouldn't necessarily run out and short it at this point. This earnings season should prove very interesting because it's been my observation ever since this market imploded back in '08 that our economy up until that point was too fat, lazy and complacent.

When the crash came and reset our economy, it forced corporate America to have a hard look at their internal processes and operations in order to hit or exceed the revenue and earnings targets Wall Street had set for them. The result was a ton of internal cutbacks to their work force and a healthy analysis of their spending. The end result came in the form of earnings expectations being beat across the board because companies had found a way to become meaner, leaner and more profitable. So here we are now wondering what the catalyst is going to be to continue to outperform the Street's expectations?

In my humble opinion, this is where things start to get dicey. Pre October 2008, everyone was running around enjoying what they thought was acceptable productivity. Post October 2008, companies cut back and streamlined their operations so they could continue to enjoy good performance. Now, we've experienced success from both sides of the coin only to find ourselves now forced to be at the mercy of product and service demand. This is why I think this earnings season is going to be a very good sign of where this economy truly is for corporate America. There are no more treats and no more tricks left to play so the tell-tale sign of growth is going to rear its head for better or worse.

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Howdy folks... well if you don't like how this market's going so far this year, then you definitely don't like money. Unemployment is now lower than it has been since 2008, money's flowing back into U.S. stocks, consumer sentiment is back on the mend AND more importantly, we have an opportunity to vote a new President into office who won't tell the lazy people in this country that it's OK to be a loser. I'm half kidding (not really) about that last comment. Anyhow, it just doesn't get any better than this!

It's important to remember though, that the market landscape can change on a dime. As suspected and communicated to you earlier in the week, the major indexes are now testing their 52 week highs. I think what transpires in the coming weeks ahead is pivotal for this market. A break above would likely cause a bit of a pullback but we can likely look forward to a parabolic move up at some point in the next month or so. A failure to break above 2011 highs and we'll be in an unsure trading state only to gain insight based on the strength of the failure.

So, we're going to know quite a bit about what this market wants to do in coming months ahead based on what happens over the next few weeks or so.

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Top of the morning to ya’ all! Looks like a three day weekend did the market some good. Maybe it allowed policy makers and the larger market forces at work to finally realize the good 'ole US of A is probably the best of the worst places around the globe right now to bet on stocks. This is excellent news for traders and investors looking for a new leg up in the major indexes. However, I’m still not so convinced this market is going to rip into new 52 week highs without some sort of decent head fake to the downside. As often as I’m right about index trading, I have been wrong on my fair share of occasions over the years.

Case in point, early last week I suggested some put options on the Q's and that didn't turn out so well but I'm pointing that out because when I made the suggestion I also made it pretty clear that if the market reversed and took out the previous day's high that would serve as a stop loss. If you listened to us on that trading idea, you would have lost a little but not much because before this market gapped up big today, it took out that high in reference slightly late last week. That was our exit and that's the importance of trading discipline.

Back to our take on the major indexes... currently, we've got the DOW, NDX and the S&P all butting up against their 52 week highs. The NDX is the strongest of the three. My educated guess is we'll test those levels at the very worst but that's where it's going to start to get very interesting. I've mentioned this in a few past editions as well but I've again included a monthly chart of the NDX to show you why we're getting very close to a critical point.