9:05am (EST)

 Special Note:

Folks, we have left a few trades open because we don’t want to panic during the volatility.  We have just finished with a huge run of winning trades (13 out of 15) and we knew we might get caught with a few because of the big price swings the market is making right now.

If you will notice our track record we got caught when the market stalled in January with some call option trades.  We knew the market was going higher (and it did) but when it pulled back before resuming its uptrend we were trapped.  In April, we called for a pullback and played it like a fiddle but the volatility has increased by leaps and bounds since then as the bulls are finally getting a battle from the bears.

We expect the volatility to continue and we are now seeing higher and lower triple-digit gains in the Dow.  We expected this move higher and we would have released some trades late in the day but when the S&P hit 1,100 we decided to wait.

Let’s see where we are next Tuesday…


Wells Fargo (WFC, $29.41, up $1.37)

June 25 puts (WFC100619P00025000, $0.50, up $0.07)

Entry Price:  $0.73 (5/25/10)

Exit Target: $1.50

Return: -66%

Stop Target: None

Action:  Shares stayed below $30 and are still under their 200-day moving average.

 

Vale SA (VALE, $27.55, up $1.96)

June 22 puts (VALE100619P00022000, $0.20, down $0.15)

Entry Price:  $1.00 (5/20/10)

Exit Target: $2.00

Return: -80%

Stop Target: None

Action: Continue to hold.



Expedia (EXPE, $22.04, up $0.40) 

June 20 puts (EXPE100619P00020000, $0.30, down $0.15)

Entry Price:  $0.45 (5/14/10)

Exit Target: $1.00 (closed half at $0.90 on 5/21/2010, half on 5/27 at $0.30)       

Return: 33%

Stop Target: 30 cents (HARD STOP) 

Action:  We were stopped out on the other half of this trade yesterday after our 1pm update.  Shares added 2% for the day but we still walked away with a decent profit.


SanDisk (SNDK, $46.85, up $3.29)

July 34 puts (SNDK100717P00034000, $0.70, down $0.65)

Entry Price:  $1.50 (5/10/10) 

Exit Target: $3.00

Return: -53%

Stop Target:  $1.10, none 

Action:  When we initiated this trade it was profitable after we opened it a short time afterwards.  When the puts were near $2 we moved the stop target up but haven’t paid much attention to it as we have said we plan on holding the trade.


Other 2010 Portfolio OPEN positions (5):  These are trades that are still open in the portfolio that have longer expiration dates or are on “hold” but are not worth mentioning until they turn around.  Many of these trades are months old so new subscribers should not be in them. We are still keeping track of the trade and we will record the results, accordingly, when we close them or they expire.  Click on the 2010 Portfolio link in the Members Area to view ALL open/ closed trades. 

A123 Systems and Berkshire Hathaway Class B.


WATCH LIST SECTION


These trades are NOT recommendations until we send out an alert.  These are trades that we like but have not added to the portfolio as an official recommendation because of market conditions or because we are waiting for better entry prices.  We will not list entry prices because these stocks are on the verge of breaking out or they could selloff.  


Apollo Group (APOL, $53.18, down $0.22)

June 50 puts (APOL100619P00050000, $1.40, up $0.05)

July 45 puts (APOL100717P00045000, $1.65, flat)

Action:  The June puts traded up to $1.63 which is where they opened.  We knew Apollo might hold up well with the huge rally we got yesterday and we can only hope these options are somewhere in this neighborhood next week.  If shares stay flat of trade high then next Tuesday we should get even better entry prices.  We are, however, leaning more towards the July put options.


Moody’s (MCO, $20.88, flat)

June 17.50 puts (MCO100619P00017500, $0.45, flat)

July 18 puts (MCO100717P00018000, $1.00, down $0.10)

Action:  Moody’s held $20 and didn’t break into the teens but we think over the next few months shares will.


Qualcomm (QCOM, $35.56, up $0.68)

June 34 puts (QCOM100619P00034000, $0.55, down $0.30) 

July 34 puts (QCOM100717P00034000, $1.00, down $0.35)

Action:  We got our wish but we had a feeling the S&P might break 1,100 which is why we held off.  We have also listed the July options which looks safer and provides us with more time.

 

PowerShares QQQ (QQQQ, $45.87, up $1.67)  

June 45 puts (QQQQ100619P00045000, $0.90, down $1.00)

July 45 puts (QQQQ100717P00045000, $1.50, down $0.90)

Action:  We have our wish with this one too.  As much as the June look tempting, we may have to move out to July.

One reason we are starting to look at July is this.  When the market opens on Tuesday, these options will only have 18 days before they expire.  If the work the bulls put in yesterday causes the market to jump back into the trading range then it could last a week or two.  We doubt the volatility disappears but it could.