markets keep on marching and making new 52-week high

With three days till expiration, my only March open position:

sell to open 1 PUT XOM 2010MAR20 65 for $1.18 USD looks good indeed.

We have to be patient and wait for a substantial pullback before we can start selling some PUT options again. Yesterday was a small opportunity, but the market rallied to close positively. It sucks to be a bear right now, but you have to patient, a pullback is eminent in my opinion. Here's today's recap:

U.S. stocks rose, with the Standard & Poor’s 500 Index reaching a 17-month high, as the Federal Reserve said it will leave its main interest rate near zero for an extended period to safeguard the economic recovery.

Citigroup Inc. and Wells Fargo & Co. paced gains in financial shares after the central bank said that while the economy is improving, low rates are still needed for an extended period. Intel Corp. rallied 4 percent after saying it shipped more than 100,000 of its new chips. General Electric Co. rose 4.5 percent on plans to possibly resume dividend raises next year. Harley-Davidson Inc. jumped on renewed buyout speculation.

The S&P 500 increased 0.8 percent to 1,159.46 at 4:04 p.m. in New York, the highest since October 2008. The Dow Jones Industrial Average rose 43.83 points, or 0.4 percent, to 10,685.98 for a sixth straight gain, the longest stretch of the year. The SPDR S&P 500 ETF Trust, an exchange-traded fund tracking the benchmark index, rose for a 13th day to extend a record streak of gains.

“The FOMC statement wasn’t materially different, but there were some nuances out there that support the market,” said Cliff Remily, a money manager at Santa Fe, New Mexico-based Thornburg Investment Management, which oversees $57 billion. “The statement reaffirms that we are in a recovery and their views on the labor market and business spending certainly helped.”

The S&P 500 closed at 1,150.23 on Jan. 19, the highest level since October 2008, and then plunged 8.1 percent through Feb. 8 on concern that European nations including Greece will fail to pay back debt and speculation that the Fed will need to rein in emergency stimulus measures as the economy improves. The index has since erased that loss and extended its rebound since March 9, 2009, to 71 percent.

Fed Statement

The Fed said today that the labor market is stabilizing and business spending has risen, while inflation remains subdued. Although bank lending continues to contract, the Fed said, financial conditions should spur economic growth. Still, the Fed said, the economy is likely to require low interest rates for an extended period of time.

“The market really liked what it heard for a quick pop,” said Dan Cook, senior market analyst at IG Markets Inc. in Chicago, who expects a possible change in rates in the second half of 2010. “People got their orders in pretty quick.”

An earlier report showed prices of imported goods fell in February more than anticipated, a sign there is little inflation pressure coming from abroad. The import price index declined 0.3 percent, the first drop in seven months, the Labor Department said.

Greece Rating

Benchmark equity indexes extended gains in late-morning trading after Greece had the threat of a cut to its credit rating reduced by S&P, which cited the country’s efforts to narrow a budget deficit that is more than four times the European Union’s limit. S&P affirmed the nation’s BBB+ rating, removing it from “creditwatch negative,” meaning the company is no longer considering an imminent reduction to the grade.

“Greece is also helping to drive investor sentiment,” said Thomas Nyheim, a money manager at Christiana Bank & Trust Co. in Greeneville, Delaware, which manages $5.2 billion. “With the stable rating now, it doesn’t look like problems are pervasive throughout Europe.”

Citigroup rose 4.1 percent to $4.05. The bank 27 percent owned by the U.S. is bolstering a unit that trades stocks with the lender’s own money after a proposed government ban of proprietary trading helped spur eight of its 22 employees to defect, people with direct knowledge of the matter said.

Wells Fargo climbed 1.3 percent to $30.28, the highest price in five months.

Intel, GE

Intel climbed 4 percent to $22.01, its biggest gain since August and its highest price since September 2008. The world’s largest semiconductor maker said it already has shipped more than 100,000 units of its Xeon 5600, a server chip that officially goes on sale today.

GE had the biggest gain in the Dow, advancing 4.5 percent to a 15-month high of $18.07. The company, which last year cut its shareholder dividend for the first time since the Great Depression, may resume increases in 2011 and repurchase stock for the first time since 2008 amid a “snapback” at the finance unit, Chief Financial Officer Keith Sherin said.

The world’s biggest maker of jet engines and medical imaging machines has “earnings momentum slowly building,” and “for the first time in over 10 years, the pieces are in place for earnings upside,” JPMorgan Chase & Co. said in a note to clients.

‘Pretty Well’

“The market has done pretty well year-to-date,” said Randy Bateman, who oversees $13 billion as chief investment officer at Huntington Asset Advisors in Columbus, Ohio. “We’ll still see catalysts to move stocks higher. Good cash flow, merger and acquisition activity, stock buybacks and dividend increases will tempt investors. We’re looking for a pretty good year of double- digit return.”

Limited Brands Inc. rallied 4.2 percent to $24.71. The owner of the Victoria’s Secret and Bath & Body Works chains said its board approved a dividend of $1 per share and authorized a $200 million share repurchase program.

Financial Engines Inc. surged 44 percent to $17.25 in its first day of trading after the investment adviser co-founded by Nobel laureate William Sharpe became the first U.S. company to price an initial public offering above its forecast range this year.

Harley-Davidson Speculation

Harley-Davidson had the biggest gain in the S&P 500, rising 7 percent to $28.35. The biggest U.S. motorcycle maker rallied on renewed speculation it may be acquired.

“We’ve been seeing rumors of a leveraged buyout,” said Patrick Mortimer, director of options trading at Pipeline Trading Systems LLC in New Hope, Pennsylvania. Bob Klein, a Harley-Davidson spokesman, couldn’t be reached for comment.

Real-estate companies had the second-biggest gain after chipmakers among 24 industries in the S&P 500, rising 2.5 percent as a group. Billionaire investor Sam Zell said real estate investment trusts will have enough cash to boost dividends in the future and that he expects more takeovers in the industry.

Equity Residential, the largest publicly traded U.S. apartment owner, surged 3.3 percent to $39.37. ProLogis gained 3 percent to $14.21. Kimco Realty Corp. rose 3.2 percent to $15.57.

Housing Starts

Homebuilders advanced, led by Lennar Corp., even after a report showed housing starts in the U.S. fell in February as record snowfall in parts of the country hampered construction, while fewer building permits signaled demand is stagnating. Builders broke ground on 575,000 homes at an annual rate last month, down 5.9 percent from January’s revised 611,000 pace, Commerce Department figures showed. Building permits, a sign of future construction, decreased for a second month.

EBay Inc. rose 2 percent to $26.79. The most-visited U.S. e-commerce site started a Send Money application for Apple Inc.’s iPhone. EBay said mobile transactions grew almost six- fold last year, to $141 million.

Wyndham Worldwide Corp. fell 2.8 percent to $24.07. The franchiser of Days Inn hotels and Super 8 motels was lowered to “neutral” from “buy” at Goldman Sachs Group Inc.

Sequenom Inc. tumbled 22 percent to $6.08. The biotechnology company posted a fourth-quarter loss excluding some items of 30 cents a share, 21 percent wider than the average analyst estimate.