1:00pm (EST)

It’s been a tough week if you were bullish on the market trading higher. As we head into the final hours of trading, the Dow is down 150 points to 8,318. The Nasdaq is suffering the most as it is down 2.1%, or 36 points, to 1,678. News that Intel (INTC, $15.28, up $0.07) will have to pay a $1.5 billion fine has weighed on Tech although Intel is up slightly.

The European Union regulators gave Intel the largest ever for monopoly abuse and said the company must change its ways. I’m not even going to comment on this because I like to keep it simple but fining a company that sells chips that have become cheaper and faster is a joke. Intel has ate Advanced Micro Devices’ (AMD, $4.55, up $0.19) lunch for years and I don’t agree with it.

Watch AMD’s call options. People are expecting a whole lot more to come for AMD I suppose. The June 5 calls (AMDFA, $0.50, up $0.20) have traded over 20,000 contracts thus far. The July 6 calls (AMDGI, $0.44, up $0.20) have also traded 20K and I like both trades as lottery plays.

Despite the nervous, choppy market, we have found a few pockets of strength. Barrick Gold (ABX, $35.00, down $0.10) had another big push this morning and traded as high as $35.93. Hopefully you rang the register and have closed it as I suggested you started taking profits in the May 30 calls (ABXEF, $5.00, down $0.10) yesterday.

The call options hit a high of $5.83 earlier this morning and our entry prices ranged from $1.00-$1.35. Don’t get greedy.

Blackstone Group (BX, $12.06, down $0.61) fell below $12 so we are out of the June 15 calls (BKFC, $0.30 down $0.20) for a 50% loss. You should have also closed half of the January 2010 10 calls (KJLAB, $3.30, down $0.60) as they hit our stop of $3.50. Our entry price was $1.75 so we have made 100% on half of the trade. That means the other half of the January calls have over 6 months before they expire. We can lock that away in the safe and check it at Christmas…

For what it’s worth, I like the Ford Motor (F, $4.82, down $0.19) June 5 puts (FRA, $0.74, up $0.25) which are slightly in-the-money at current levels.

It looks like that “sell in May and go away” is showing up this week.

Rick Rouse
Rick@OptionsMentoring.com