Market Report: Playing Friday’s Unemployment Report

When it comes to the next major market move, all eyes will be on Friday’s September unemployment report, which will be released at 8:30 a.m. EST. The consensus estimate expects the rate to come in at 4.7%, which is up fractionally after last period’s 4.6% rate.

Now Be Warned: If Wall Street doesn’t like what they hear, this could be the catalyst for a big-time market fall. After all, the recent trading patterns indicate that the economic data push the market lower -- and the Fed comes in and rescues everyone.

If this same pattern holds true this week, you can expect a red day on Friday.

But Take Heart: Even a downside forecast like this shouldn’t mean that you need to worry. After all, if you’re a WOW member, you have General Mills (GIS:NYSE) and Raytheon (RTN:NYSE) on your side!

What the heck does that mean?

Let me explain…

I’m sure you already know the story on GIS and RTN.

Raytheon operates six aerospace and defense segments including integrated defense, intelligence and information, missile systems, and space and airborne systems.

General Mills manufactures consumer foods like ready-to-eat cereals, refrigerated yogurt, microwave popcorn, frozen pizza frozen baked goods, ready-to-serve soup, dessert and refrigerated cookies.

In short, both companies couldn’t be further apart in their business operations. But in a market like this, where a sizable downside move could happen in a heartbeat, each company offers you a safe-haven investment (or a flight to safety, as some like to say).

You see, a consumer staples like General Mills is bulletproof against a recession. They’ll generate sales through good times and bad. And the same goes for a defense stock like Raytheon. Despite rumors of slowdowns, our governmental defense spending continues to fuel massive upside for major defense firms like RTN, and this will not stop anytime soon.

This is exactly why Adam and I have our WOW readers positioned in call options on both stocks.

On June 27, for example, we recommended Raytheon November 55 Calls (RTN KK) for $2.25 per contract. As of October 1, these calls traded as high as $10.70, good for a whopping 375.56% max gain. How’s that for major market protection?

Along the same lines, we just recommended GIS January call options -- and so far this position has only gained 4%. But if you give it time, we feel it’ll also produce a tremendous ending return, especially if we witness a market concerned about a recession.

Adam referred to the GIS position as a “safety line in a toppy market,” and I fully agree. So the trick is to protect yourself against a fall (and also profit off any upside moves). Positions in both GIS and RTN offer you this tremendous market benefit.

Bryan