NEWSLETTERS & RECOMMENDATIONS - September 12, 2010

Fellow Friends and Traders,

The sell-off certainly seems that way. September is normally the worst month of the year unless the week after Labor Day is up nicely and the week was up nearly 6%. August was down 6-7%, I believe. As the market moves up and down week to week depending on the moment’s news announcements we still remain range bound between 1000 and 1150. So NET Traders continue to buy the dips and sell the rips. These trading range gyrations are shredding trading performance of most players and driving them to the side lines. However, these players are under performing and mostly likely will be forced back into the game playing catch up later in the year.

I believe that Jobs Growth or 175,000+ private sector hires a month is probably the only news that can take the market out through the 1150 top. That's not happening any time soon. The election ahead is key. However, there is a better tone coming from Obama and if the GOP doesn't snatch defeat from the jaws of victory the market can trade higher. Anything less than GOP control of the house will be spun as a plus for Obamanomics. Still there is some good news out there. I believe that Obama's entire Economic team and Chief of Staff will have been replaced after the election. We hope. It can't get any worst.

World Stage Look Ahead:
There will be quite an interesting conflict between the haves and have nots of the world over the next 5 years that is between those growing or emerging nations and the heavily indebted countries. I see this forcing most Western economies, especially Americans into a painfully long, game changing period of austerity and civil unrest. I know I've said this before. I believe we will see this first in Europe, most likely Greece sooner than later. Long term 30-year Greek debt is already selling near $0.50 on the dollar, say with 5% coupons. These and other long term Greek bonds will be restructured into new bonds with 50%-100% higher yields and still selling near $0.55-.60. Those suffering Greeks will just have to endure much more pain ahead. Just a taste of what lies ahead. So far these extreme debt positions are being played out in the currency markets and not in collapses of countries yet.

The trading/investing world over the next 5 years will be obsessed with income, quality growth and financial strength. Still leaves room for our Stem Cell companies that offer the most growth promise of any sector out there but with a speculative bent. Speaking of which BTIM and other Stem Cells companies were given a reprieve by the Appellate Court to continue as is until a decision is render. Dr. West will be addressing the StemCell USA Conference starting this week. Here’s the link to the conference page - speaker list.

Bears have been posting like crazy last week on the Yahoo BTIM message board. A 3.356M share short position as of 8/31 is still rising and over 30% of the public float. Over the last 3 weeks I have bought over 300 Dec and Mar 5.00 calls while still bidding for more. I sold additional 7.5 strike puts with more offered. I've been selling some common on rallies increasing cash to do more BTIM options.

Thoughts Ahead:
I will continue to sell puts on the OEX 100 Index and selected stocks (like HUN) toward the lower end of the aforementioned range and take profits and/or sell naked calls near the top end until something changes.

Trade of the Week:
The market rallied immediately on Tuesday after Labor Day and closed Friday just short of resistance at the 200 DMA. There were no option trade setups until 12:00 Friday. I sent an Alert Email before 12:00 to own the 500W Calls near $1.00. They hit $1.15 close enough for government work. There were numerous hedged trading profit opportunities as well. The calls hit a high of $2.40 where upon I then sent another Alert Email to scale out the calls into strength. The calls hit the day's high at $2.80 around 3:30 before closing at $2.26. See Friday’s 5 minute chart, NET Weekly Money Chart 2010-09-10.

It's always nice to get away and rest but even better to be home trading with my "Buds" in the Chat Room. Join us some time. Keep those cards and letters coming. Got one from a new student just blown away by the quality of the program he's seen so far from the books on down.

Good trading,

Stan Moore
702.267.0396

P.S. Always remember 9/11 and don't ever forget. I know I never will. I lost over 50 friends. I cried for a week and I was gone from Wall Street at that time over 9 years. Still brings tears to my eyes every year this time.