Tax Plan Brings New Highs And Weekly Gains For All

PROGRAMMING ALERT: John Blank was on CNBC this afternoon discussing the tax reform plan. Make sure to watch his appearance by clicking here.

After a long, long wait, tax cuts are finally on the horizon. Senator Marco Rubio is now a “yes” vote after his concerns on the child tax credit were addressed, and it appears that this might very well happen…and maybe even happen before Christmas.

“It looks like you folks are finally going to have to wake me up on Monday. If we don’t get this tax deal passed over the weekend it’s likely to happen early next week,” said Dave Bartosiak in Momentum Trader and Surprise Trader.

The market acted accordingly on Friday. The NASDAQ jumped by 1.17% to 6936.6, while the S&P was up 0.90% to 2675.8 and the Dow advanced 0.58% to 24,651.7. That marks new all-time highs for all.

There was more good news for the full week, as the Dow gained 1.3% and the S&P advanced 0.9%. Those indices have now put together four straight weeks on positive ground. And the NASDAQ finally joined the party for the first time this month. In fact, the index was the best performer of the three with a weekly rise of 1.4%.

Options Trader had a truly eventful session as three of its positions expired on Friday with their maximum returns. That makes three triple digit winners! Also, Value Investor bought a building products company that should see a lot of business in 2018 thanks to the strong economy. Read the highlights section below for more on these moves and for some analysis from Counterstrike.

Today's Portfolio Highlights:

Options Trader: What a day for the portfolio! Three positions expired fully in the money and earning their maximum profit potential. In other words, that’s three triple digit returns!

• The Dec 125/135 bull call spread in CME Group (NASDAQ:CME) brought in 135%
• The two Dec 160/165 bull call spreads in Lear (LEA) returned 153%
• And the two Dec 85/90 bull call spreads in Dover (DOV) gained 122%.

Read Kevin’s complete commentary for more on this impressive day in Options Trader.

Value Investor: With the economy doing well these days, Tracey is a big fan of home building and construction right now. The idea is that people will be more willing to spend money on their houses, especially replacing or repairing that worn out roof. So Beacon Roofing (BECN) is in a great position, as the roof replacement cycle last peaked all the way back in 2005. That leaves a lot of pent up demand for 2018 and 2019. Tracey added this Zacks Rank #1 (Strong Buy) on Friday. In addition to solid value characteristics, earnings are expected to rise 41% in fiscal 2018 and another 24% in fiscal 2019. Get a lot more specifics on this new addition in the full write-up.

Counterstrike: "The issue with the market lately was the violent sector rotation. One day it would be tech, the next day it would be financials. This created pressure on the overall indices that caused a choppy and confusing mess. Today everything was up. It was clear that investors wanted back into the market after the tax bill was secured and into the Christmas holiday.

"It seems like the next couple weeks will be the time to sit back and relax. I expect a slow grind higher and a move over 2700 in the S&P. The VIX remains at lows and there is very little risk out there. I also think the crypto market euphoria might transfer into stocks." -- Jeremy Mullin

Have a Great Weekend!
Jim Giaquinto

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