“I want a one-armed economist”

Bernanke Speaks and the Market Rallies?!

“I want a one-armed economist so that the guy could never make a statement and then say ’on the other hand…’”

— Harry S. Truman

Dear Bottarelli Research Member,

On Monday May 22nd, I posted a special report called the “Aftermath Report.”

The purpose of this study was to offer you a supplemental investment strategy that works hand in hand with our “lock and load” trading. After all, some members have asked for plays that profit over a longer time frame, so the goal of this report was to get positioned in a series of longer-dated upside plays on some of the market’s top companies — and gradually ride these stocks higher via 6-month call options.

The supplemental plays offered in the “Aftermath Report” gave you a chance to get positioned in additional trades on your own time. In short, they were a perfect way to balance our short-term trading with a longer-dated strategy — offering you the best of both worlds!

Just as I finished my final selections for this report — the markets began to lose steam. In fact, the losses quickly started mounting on each other. One day of extreme weakness turned into one week of extreme weakness. Two weeks later, the markets were in the midst of an all-out correction — and nothing was being spared. Not large caps, not mid caps, not small caps. Not even gold, oil, or energy stocks withstood the damage. Everything was in the red. Everything!

I finally posted the report on May 22^nd — when I described the market conditions as a situation called “Looting the Battlefield.”

“Looting the Battlefield” is a practice of using a major market correction to pick up shares of the top companies on Wall Street for dirt cheap. While all these companies are dead and listless, you can get yourself positioned for incredible entry prices — literally picking the pockets of these top stocks for explosive 3-6 month gains.

The trick, of course, is waiting until the battle is completely over before buying in. Since nobody can perfectly time the markets, the idea is to use the longer-term prevailing trends in our favor to position ourselves in a well-diversified mix of market leaders.

Given the recent market sell-off, I though it would be the ideal time to offer up picks that capitalize on this strategy. So I appropriately named this research “The Aftermath Report” to symbolize buying these stocks at the tail end of one of the strongest bull market corrections in recent memory.

In the original report, I issued five picks. I’ve since sold one of the five, taking a 27.45% on GPRO November 55 Calls (PSU KK). The remaining four are a diversified mix of companies in various sectors — ranging from heavy machinery to gold to defense. Today, I think it’s time to add to these positions at current levels. If you don’t yet own these positions, or you’d like to add more to your position at current levels, I rate them all as additional buys as follows:

PLAY #1: Buy the CAT November 75 Calls (CAT KO) at or under $4.10, good for the day. Caterpillar is currently up $3.00 on news that they re-affirmed their earnings guidance.

PLAY #2: Buy the DNA December 80 Calls (DWN LP) at or under $7.00, good for the week. DNA has recently benefited from a series of upgrades, and their pipeline of drugs continues to create a buzz in the medical industry.

PLAY #3: Buy the ATK November 80 Calls (ATK KP) at or under $4.50, good for the week. ATK is the best mid-cap defense company you can own.

PLAY #4: Buy the ABX October 30 Calls (ABX JF) at or under $2.00, good for the day. ABX has gotten absolutely clobbered by gold’s recent price volatility, which means picking up some longer-term calls at these levels could prove to be an extremely strong entry point.

In addition, I’d also like to enter into a speculative upside position in Las Vegas Sands (LVS – NYSE).As you know, I’ve been watching this one for quite a while — and it now looks like the stock is primed to make a run at their recent high at $72.50.

On May 26^th, the owner of The Venetian in Las Vegas was awarded a license to build the first casino in Singapore. This comes in addition to entering the highly-lucrative Macau market in the People’s Republic of China, setting the stage for a long-term uptrend in the gaming giant. As a more speculative play, let’s get positioned in some July out-of-the-money calls today.

PLAY: Buy the LVS July 70 Calls (LVS GN) at or under $3.40, good for the day. Current bid/ask spread is $3.00 to $3.30. An upside move to $72.50 could make these calls worth around $5.10, good for a 60% gainer.

Lock and load,

Sincerely,