Gaining Bullish Momentum

Friday's trading was under the influence of the quadruple options expiration. This week we'll see where we are. Large traders now believe that things are less bad than before with the economy and earnings prospects, but the lack of action suggests investors are waiting for headlines to drive the market. Looking ahead to next week, there are a few notable earnings releases, including Oracle (ORCL) on Tuesday (6/23). Apple was expected to sell as many as 500,000 new iPhones this weekend. QQQQ's implied volatility plunged as large trader dumped put options and bet on an upswing.

QQQQ poised to bottom out this week

TRADING OPPORTUNITY: Bet on the QQQQ's next upturn. Buy below 29.80 and sell at 31.40. You have the 70% chances to close this position within a week and 82% - in a month. Don't miss it out!
RATIONALE: The QQQQ stock has a strong technical support at the 28.50 level. Besides, the tech sector has already factored in a very long list of negative news and expectations. Hence, upcoming earnings and outlooks from IBM and AAPL will most likely provide a relief rally.The tech sector is poised to bottom out. Large traders keep accumulating big tech names and buy call options in volumes to profit from the anticipated upturn.

Apple is poised to bottom out

Apple looks very attractive at the current level. Especially, after positive comments from Steve Jobs. It is poised to bottom out later this month. This company remains very strong fundamentally and should lead the tech sector recovery. Large traders accumulate the AAPL stock and buy call option in large volumes.

China ETF (FXI) in play

The China's exchange-traded fund looks very attractive at this level. The China's market has collapsed by 70% since last year but the central government is taking decisive steps. It approved a six hundred billion stimulus package designed to create valuable growth. We expect this exchange traded fund to gain bullish momentum next week. Our paid subscribers will receive our detailed Research Note with trading alerts as soon as we identify a good entry point.

Negative news are already priced in

The market reacted positively on negative news. It shrugged off Intel's warning and bad jobs data. Large traders are getting ready to move higher.  

S&P 500 is deeply oversold

The trailing P/E ratio is 13. This represents a 30% discount to the average P/E of 19.3 since 1988, when S&P first started reporting operating earnings data. Earnings growth has also come under pressure in the past few months, as seen in the steady reduction of forecasts. However, according to our analysis, large traders have already begun the bullish play. 

Google is being accumulated

Google (GOOG) remains very strong fundamentally: forward P/E (18) << trailing P/E (28). PEG =0.7. However, large traders do not allow the stock to above the 450 level. They accumulate the stock at this low level and keep buying call options in large volumes. We expect this stock to bottom out in coming weeks.