Biggest 3-Day Rally In 2012 Fueled By Eurozone & Fed Optimism

Broader Market Weekly Performance: Dow +1.97% S&P +1.71% Nasdaq +1.12% Russell +0.56% www.BookingAlpha.com Check out my latest interview on Benzinga and TraderInterviews.com MARKET UPDATE: Markets got their mojo going this week posting thier greatest rally of 2012 on Eurozone & Fed optimism. Markets rallied straight up for 3 days on comments from Draghi, the head of the ECB, that he will do "whatever it takes" to save the Euro. Hopes are swirling that the ECB, or one of thier proxies, will announce they will begin buying soverign debt this coming week. Germany already poo-pooed those sentiments Saturaday denying they had changed their stance and were open to doing so. Spain and Italy are still trying to maintain their macho "we don't additional bailout funds" statements. Bottom line, Spain weill most definitely need additional bailout funds, period. Interestingly, Treasury Secretary Geightner is traveling to Euro-land Monday. He can do nothing and cannot provide zero financial support to the Euro from the US. His trip looks like a consulting mission to help the Euro figure out what to do with a big problem that has yet to be announced; possibly Spain's next bailout request? The rally this week was led by syclical and defensive stocks. Those sectors do not typically lead bull markets. Furhtermore, technology and small caps floundered thos week which lends even less support to the rally. Recent high flying momentum stocks were also slaughtered this week. All of the items listed above does not mean that the market cannot hold its gains or even levitate a little more leading up to the Fed/ECB/Jobs Data hoopla in the latter half of the week. However, a 2 standard deviation rally on anticipation gapping markets above far above short term moving averages is not sustainable. Expect some retracements and backing and filling over the next 2 weeks back to at least the S&P 1350-1360 area. Navigate wisely and stay profitable, my friends. Happy trading! BOOKINGALPHA UPDATE: Monthly Trading Service Commentary: Please refer to Friday's blog post for Weekly Advisory Commentary: Summer Rally Friday And Our Expiring ITM Debit Spread Hedge for +78% Gain The Monthly Trading Service portfolio gained +4.70% for July and has already logged a +5.10% gain for August. Since May Opex we have generated a +24.4% gain. While losses are unfortunate, they are a part of trading. Looking at past trading years you will see drawdowns like this do occur and ultimately, how we prevailed. This is not a justification, merely a reminder that this situation is still within the realm of normal portfolio gyration. While it may be uncomfortable and is surely no fun, my position sizing allows for these drawdowns providing enough capital to recover. See past year's results and let them speak for themselves. For more information please read: Generating Alpha Comes With Volatility Monthly Trading Service YTD vs S&P 500: +3.95% YTD BookingAlpha Monthly Advisory vs. +10.21% YTD S&P 500 See Trading Record Weekly Trading Service Commentary: Please refer to Friday's blog post for Weekly Advisory Commentary: Summer Rally Friday And Our Expiring ITM Debit Spread Hedge for +78% Gain For some additional color beyond Friday's post, here our some reference points: --DIA & SPY closed Friday above their upper Bollinger Bands = overbought. --DIA >2.3% and SPY >2.5% above their 5 Day MA's = overbought. --DIA up 4.7% and S&P up 4.5% in 4 days - why? = overbought. --No real news came out his week, just hopes of more QE from the Fed and Europe In summary, whether the market is heading higher or not, a gain like we saw during the last half of this week due to hopes of more QE, all while heading into the end of the month, taking the markets above their Bollinger Bands and short term trend lines, is just not buy-able. We would be more worried about our position(s) if the market had been taking stair steps up and digesting its gains but conditions like this are merely whipsaws. This is precisely why we used August options for our DIA position; to buy us time in case a "QE Hope" rally materialized. The Weekly Trading Service portfolio has gained +21.6% in the past month while only putting 1/3 of the portfolio at risk at any time. While losses are unfortunate, they are a part of trading. Looking at past trading years you will see drawdowns like this do occur and ultimately, how we prevailed. This is not a justification, merely a reminder that this situation is still within the realm of normal portfolio gyration. While it may be uncomfortable and is surely no fun, my position sizing allows for these drawdowns providing enough capital to recover. See past year's results and let them speak for themselves. For more information please read: Generating Alpha Comes With Volatility. Weekly Trading Service YTD vs S&P 500: -6.62% YTD BookingAlpha Weekly Advisory Portfolio vs. +10.21% YTD S&P 500 See Trading Record Check out the BookingAlpha Trading Record Check out my latest interviews at TraderInterviews.com & Benzinga: Subscribe today and don't miss out on your next profit opportunity! Review us and read what other have to say at Investimonials!