In this week s Cash Cow Newsletter I would like to briefly look at the recent action in the $SPX then analyze several new profit opportunities.

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1 October 30 th 2013 In this week s Cash Cow Newsletter I would like to briefly look at the recent action in the $SPX then analyze several new profit opportunities. The S&P 500 Index is virtually flat since Friday s close: October s rally came as a pleasant surprise to most traders. Even with positive earnings reports and continual Fed stimulus, the market could potentially be nearing an overbought level. It is impractical to try to time when a top will occur. The emotional fallacy of future price prediction does not work in the long run. This applies to the market 1

2 as a whole, as well as individual stocks/etfs. We must go by what the price movement is currently telling us and plan our strategy accordingly. The major U.S. Indexes are in a short-term, intermediate-term, and long-term price uptrend. The $SPX has remained above the upper Keltner Channel for nearly two and a half weeks. We should be cautious in our strategy selection and lean towards a more conservative approach to try and protect ourselves in the event of a sudden correction or profit taking. The first profit opportunity I d like to show you is FB (Facebook): 2

3 We recently looked at Facebook in our 10/10 newsletter. For those unfamiliar, Facebook is an online social networking company that operates worldwide. The company has a record of excellent financials including consistent Revenue, Equity, and Retained Earnings growth. The stock is currently in a 50/100-Day EMA uptrend that s confirmed through the presence of an up-sloping On Balance Volume. FB closed near the middle Keltner Channel, presenting a good entry point for a weekly covered call. Currently the FB November 8 th At-the-Money 51-strike covered call has a 3.4% profit potential: For those looking for a more leveraged approach, the FB November 16 th 42/50- strike call option debit spread has a 25.8%, or $164 profit potential at a cost of 6.36 points. If FB increases or remains flat in price by expiration we will realize this 25.8% profit. If FB decreases -2.5% we would still profit 16.3% or $103. 3

4 The next profit opportunity we ll look at is P (Pandora): Pandora Media offers Internet radio services in the United States. The company permits listeners to create up to 100 personalized stations to access unlimited hours of free music and comedy, as well as offers Pandora One, a paid subscription service. P has recently retraced below the middle Keltner Channel, providing a good entry point. P offers high premiums and is an excellent candidate for a weekly covered call. We should consider initiating a covered call on P for the November 8 th expiration. Currently the At-the-Money 26-strike covered call has a 5.2% profit potential: 4

5 If P increases in price by expiration we will reach this 5.2% profit potential. This is a better than average potential return for such a low risk strategy and a 1 week period. For those looking for a more leveraged approach, the P November 16 th 20/26- strike call option debit spread has a 28.5% or $133 profit potential with a cost of $467 at current prices. If P increases in price by expiration we will realize this maximum profit. If P remains flat we will profit 21%. 5

6 The last profit opportunity I d like to show you is OCR (Omnicare): Omnicare is a healthcare services company that specializes in the management of pharmaceutical care in the United States and Canada. The stock is in a 50/100-Day EMA uptrend that is confirmed through an upsloping On Balance Volume. After recently retracing, the stock is on its way back up and closed below the middle Keltner Channel. This placement offers us a good entry for a Market Neutral Spread. 6

7 Currently the OCR November 16 th 45/55-strike Market Neutral Spread has a maximum loss potential of only -8.4%, and an unlimited profit potential: If OCR increases 5% by expiration we would profit $162 or 14.8%. If OCR increases 10% by expiration we would profit $436 or 39.9%. Note: Profit performance displayed in this newsletter does not include transaction Costs. This newsletter includes some trading ideas following Chuck Hughes trading strategies along with educational information. For a complete listing of Chuck s exact trades, including specific entries and exits and real time Portfolio tracking, please call Brad at or Click on the link provided below to access the Cash Cow Archive. Cash Cow Newsletter Archive: 7