Not Believable

The first trading day in September the market was up 5 straight years 2003-2007, and off 4.2% alone in 2002.

* Some traders limit buying in sectors that are over 50% in an Point and figure Bullish Percent Chart. When a Bullish Percent is over 70% tops are being reached, that may be “steps to breakout”, but with higher risk of being overbought. Note again we have a bullish % over 80, a traditional sign of an overbought market.
Friday we saw enough downturn to make our puts profitable for many subscribers, and calls could have been bought on the downswing, again selling for nice profits same day. Thusly, we will open trading today with one open put, that has been profitable 3 days now, but not to the highs we think it can reach, and one new put. We continue to hold the call open also, despite it being profitable on Friday, for traders waiting for more maximum profits; note that calls may losing their edge.

The bull/bear argument is becoming tiring, as is the euphoria and constant last minute Plunge Protection Team coming in. The constant upswing has made many investors "nervous" that they have missed out on the "action," and increased the buying of now the individual trader, intent on not missing out on profits. We continue to see upside to 10,400 to 10,600 and a potential strong year end, BUT continue to believe we must have consolidation of merit to break this bubble in order for that to happen.

Some facts:
1. http://www.bloomberg.com/apps/news?pid=20601087&sid=aSdMMGzkt1do

2. http://www.bloomberg.com/apps/news?pid=20601087&sid=axhtJ0oKv7Xc

This second article speaks to risking U.S. Treasuries, as more question the viability of long term recovery.

Lastly, our call profits over the past three weeks have been simply extraordinary, and we've lost on 4 puts. Our loss ratio is actually higher than normal because of the capital to the second buys, but still averaging over 28% profits for this period. For those of you new to trading that are with us, and to our stockbrokers and long term subscribers, I'll share that the extended range we've experienced has been quite unusual, and now the study of many technicians, and thusly more and more difficult to option trade because the moves became almost "not believable".