NEWSLETTERS & RECOMMENDATIONS - December 04, 2011

Dear Friends and Fellow Traders,

That's the $64,000 question everyone's asking this coming week. This week's meeting on Thursday-Friday will be the last opportunity of this year for action that will begin to address the crisis. The perception is that the time to act has come even at this late stage.

As I have noted many times that this will take anywhere from 18-24 months to get a true workable solution. So a clean, clear, achievable or even sustainable fix is unlikely. Yes, certainly a positive move forward but will it be enough for the market after last week's 7% rally? I believe the investor sentiment has improved but the crisis tensions won't easily go away. I'm guessing not but I'm hopeful.

The world markets last week were jolted into action by 6 central banks in a coordinated move to ease liquidity. Anytime the market makes an outsized move in any one direction, I've seen continuing moves of upward of another 10%. This is why it was so easy to setup trading NET Alert Emails that were going to help you ton money. I've seen hundreds of these moves over my 45+ trading years and it works over 90% of the time. I trust you personally profited from my Alerts.

Given the news, the expected up-coming meeting and last week’s 400 DOW point rally we could expect some consolidation or even a small selloff last week. This happened exactly and for now the bulls have scored a victory.

I aggressively recommended in an Alert Email buying puts into that 400 point up move late Wednesday but hedge aggressively. I also notated on a chart the expected coming price movement - “Up Sharply, Sideways and Up Sharply again”. The same applies to big down moves but in reverse. The puts also protect against any negative surprises for very little money given the low cost of weekly options.

I also like using puts into resistance and after a huge up move because the market will now mark time and the puts are cheaper while our Oscillator (indicator) is much better at signaling buys and sells in a trend strength-up consolidation. Furthermore, the hedged buy profits tend to be larger than the hedged sells so the overall hedged profits are bigger. I also like the fact that, on balance, weakness will be limited. So, I'm even more comfortable adding more buy hedges into further weakness than selling higher highs that are expected and price can blowout to the upside at any time. Long calls and short E-minis can limit our profits if the up move reasserts itself too early. This action hedge then only served to lock in a profit once the up move reasserts itself. In rising markets I look for the low risk and opened-ended long side trade. Hence the long put (small defined risk) and unlimited up of the long E-minis.

For the coming week it's all about Europe. So stay alert early. Who knows what can happen over there before the meetings starts.

Trade of the Week in Review
There was a rather large rally into Wednesday’s close worth over $350 hedged long profits alone that more than paid for the puts. The markets continue to consolidate higher into Thursday as well. The hedging profits on the E-mini longs were rather large. I Alert Emailed on Thursday that we would load the boat with puts near the 1260 or 200 DMA level given that a good jobs number could be expected and after the ADP number that came out. Besides the market would be up over 1000 DOW points for the week making the market vulnerable to selling as traders moved to lock-in these enormous profits.

I also Alert Emailed Thursday afternoon and on the Chart that we should hold all puts over night and buy any weakness then, before the jobs release at 8:30 Friday morning, sell the long E-minis into the expected rally. The overnight markets given the good number only came in a few points to strong support. After the jobs number was released I send another Alert Email to sell all hedges as the S&Ps rallied nearly 20 points or a $1,000 profit per hedge! Who says this isn't fun and you could long E-minis in size because you owned fully paid for puts and then some. If you weren't long puts would any of you really buy and hold long E-minis while asleep? Not many would I assume. As for me I sleep like a baby. I wake up every hour and cry. I've been doing just that for years. However, they are tears of joy!

In that same Friday pre-market Alert Email I suggested we closeout all our long 125 SPY puts and buy the 126s. I always want to be in ATM options on the option’s last day. We usually can roll for only $0.30 additional premium. I'm more than willing to pay that extra premium especially today because the 125s went out worthless while the 126s closed at $0.92.

The 126s were originally bought near $0.45 to start. I lost about $0.30 when I sold my 125s near $0.15. I like these trades, lose pennies make thousands of $$$s on hedges. We further scaled into the 126 puts into the rally high near the 200DMA as outlined in previous Alert Emails which traded as low as $0.18. I send another Alert Email later in the day while the puts were trading near $0.80 to start selling them. The 126s hit a high of $1.24 before selling off to close at $0.92. Assuming an average price of near $0.30 that's a possible 3-4X return plus $1,000s more on additional hedges per $300 (assuming 10 puts)! See attached Friday's final "C" chart, NET Weekly Money Chart 2011-12-02.

I will be announcing a few special Holiday Deals on a few of my services that I've never done before. So look for a few extra emails as a way I thanking each and every one of you for your support these many years.

Good trading,

Stan Moore
702.558.1814