The Dow has just traded below 11,000 for the first time in two years as it is down 235 points to 10,993. You could tell from the opening bell that this was a good possibilty as oil conitunes to set record-highs. So far, 29 out of the 30 Dow stocks are showing a loss with the lone exception being General Electric (GE, $27.77, up $0.13) which had a decent quarter.

GE announced slightly better-than-expected earnings of $5.1 billion, or $0.51 a share, compared to $5.4 billion, or $0.52 cents a share, in the year ago period. The company beat on the revenue side with $46.89 billion in sales. The report was a relief for Wall Street thanks to lowered guidance from GE that was announced in May.

The rising price of oil is also taking a toll on the market as it has reached $147 a barrel. Yeap, $150 will be a reality and $175 is a good possibility if another war breaks out. Did I mention the dollar was down again today?

There is some good news out there though.

The Merrill Lynch (MER, $26.97, down $1.74) July 32.50 puts (MERSA, $5.85, up $1.40) are up over 150% from an entry price of $2.15 on 6/30. Merrill is down in sympathy due to the Fannie and Freddie crisis. Set stops at $4.50 which gets you a 100+% return.

And finally, I’ve been telling you that Chipotle Mexican Grill (CMG, $70.00, down $1.52) was poised for a huge drop and we got that on Thursday as the stock lost over $7. Today’s plunge is just icing on the cake. On 7/3 I said: “looks like this one could fall to the low $70’s”. Check that. Make that the high $60’s now. The July 75 puts (CMGSO, $5.63, up $0.73) were trading for $1.65 and I thought they would be good up to an entry price of $2. These calls are now deep-in-the-money so protect your positions accordingly.

Rick Rouse
Rick@OptionsMentoring.com