April 2012 | Members

MEMBERS AREA

Please remember, ALL “Exit Targets” and “Stop Targets” are targets.  You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless we list one.  We will send out a “Profit Alert” or “Trade Update” if we want you to close a position OR if a new trade comes out.  Otherwise, follow instructions at all times in the 9am and 1pm updates.  Also, we will usually give you a heads-up if we think we are going to send an email outside of these time frames but it is rare that we do.

 12:40pm

Acuity Brands (AYI, $55.60, up $1.49)

May 50 puts (AYI120519P00050000, $0.70, down $0.35)

Entry Price:  $0.60 (4/12/12)
Exit Target: $1.20
Return:  17%
Stop Target:  None

Action:  We were able to get back into Acuity Brands near our original price from the first put option trade we just closed.  We have a good feeling shares will be below $50 come mid-May.     

 

LinkedIn (LNKD, $104.55, up $6.89)

May 82.50 puts (LNKD120519P00082500, $1.00, down $0.50)

Entry Price:  $0.90 (4/12/12)
Exit Target: $1.80
Return:  11%
Stop Target:  None

Action:  Shares could trade down to $80 by mid-May.

 

Caterpillar (CAT, $105.54, up $3.79) 

May 92.50 puts (CAT120519P00092500, $0.85, down $0.55)

Entry Price:  $0.85 (4/12/12)
Exit Target: $1.70
Return:  0%
Stop Target:  None

Action:  Use limit orders up to 90 cents but do not pay more than $0.95-$1 to establish positions.

 

PowerShares QQQ (QQQ, $67.14, up $0.69)

May 65 puts (QQQ120519P00065000, $0.90, down $0.25)

Entry Price:  $1.00 (4/11/12)
Exit Target: $2.00
Return:  -10%
Stop Target:  None

Action:  We did a video back in January and showed how the QQQ’s were on the verge of breaking $60 when they were around $58.  We also said if $60 were cleared the QQQ’s could run to $70.  They hit a high of $68.55 at the beginning of the month so we came pretty close in hitting that target but resistance will be hard to clear unless Tech starts coming through with powerful earnings.  Our point is, if Tech fizzles from here the QQQ’s could retest $60 which gets these put options to $5, or a 400% gain.

 

Deckers Outdoor (DECK, $63.60, up $0.45)

May 50 puts (DECK120519P00050000, $0.55, down $0.05)

Entry Price:  $0.50 (4/11/12)
Exit Target: $1.00
Return:  10%
Stop Target:  None

Action:  The 2-year chart shows a test to $50 could be coming.

 

First Solar (FSLR, $22.76, up $0.26)

May 18 puts (FSLR120519P00018000, $0.90, down $0.10)  

Entry Price:  $0.90 (4/11/12)
Exit Target: $1.80
Return:  0%
Stop Target:  None

Action:  Shares have traded down to $21.60 today.  

 

Tiffany & Company (TIF, $67.18, up $0.42)

May 62.50 puts (TIF0519P00062500, $0.85, down $0.10)

Entry Price:  $1.05 (4/9/12)
Exit Target: $2.10
Return:  -19%
Stop Target:  80 cents

Action:  We have a near-term target of $60 for Tiffany.    

 

Lululemon Athletica (LULU, $73.23, up $0.17)

May 67.50 puts (LULU120519P00067500, $1.40, flat)

Entry Price:  $1.05 (4/4/12)
Exit Target: $2.10 (closed half at $1.60 on 4/11/12)
Return:  43%
Stop Target:  $1.20 (Hard Stop)

Action:  Shares traded to a high of $73.46 yesterday but we figured on a small back test following Tuesday’s $4 drop.  Our near-term target calls for a test down to $66, possibly $60.

 

C.H. Robinson Worldwide (CHRW, $64.63, up $0.63)

May 60 puts (CHRW120519P00060000, $0.70, down $0.20)

Entry Price:  $0.65 (4/4/12)
Exit Target: $1.30  (closed half at $0.90 on 4/11/12)
Return:  23%
Stop Target:  65 cents

Action:  The options traded to a low of 70 cents before rebounding as shares hit a high of $64.58 before fading.  The 52-week low is $62.30 and we still expect a trip below $60 is forthcoming, possibly $55.

 

Potash (POT, $43.49, up $0.73)

April 42.50 puts (POT120421P00042500, $0.45, down $0.30)

Entry Price:  $0.55 (3/29/12)
Exit Target: $1.10 (closed half at $0.95 on 4/10/12)
Return:  27%
Stop Target:  None

Action:  Let’s hold this trade open for another day and we will see where we are at Friday afternoon.

 

Other 2012 Portfolio OPEN positions (8):  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.  This means we would not open any new positions.  We are still keeping track of the trades and we will record the results, accordingly, when we close them or the options expire.  Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.

 

magicJack VocalTec April 30 calls (from March 2012)

E*Trade Financial July 12 calls (from March 2012)

Bank of America January 12.50 calls 2013, July 12 calls (from March 2012)

Acme Packet April 40 calls (from February 2012)

Dendreon May 22 calls (from January 2012)

Silver Wheaton April 42 calls (from March 2012)

U.S. Oil Fund April 45 calls (from February 2012)

Sony April 22 calls (from February 2012)

 

WATCH LIST SECTION

These trades are NOT recommendations.  They 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 try not to have more than 12-15 open trades at any one time which is why we created a Watch List.  We will not list entry prices because these stocks are on the verge of breaking out or they could sell off.

We will update this section in the morning.

***********************

11:30am (EST)

NEW TRADES!!!

Acuity Brands (AYI, $55.94, up $1.83)

Buy to OPEN May 50 puts (AYI120519P00050000, $0.60, down $0.45)

Action:  Use limit orders up to 65-70 cents but do not pay more than 75-80 cents to establish positions.     

 

LinkedIn (LNKD, $105.25, up $7.59)

Buy to OPEN May 82.50 puts (LNKD120519P00082500, $0.90, down $0.60)

Action:  Use limit orders up to 90-95 cents but do not pay more than $1 to establish positions.

 

Caterpillar (CAT, $105.26, up $3.51) 

Buy to OPEN May 92.50 puts (CAT120519P00092500, $0.85, down $0.55)

Action:  Use limit orders up to 90 cents but do not pay more than $0.95-$1 to establish positions.

*************************

9:00am (continued…)

The Dow gained 89 points, or 0.7%, to settle at 12,805.  The index had fallen 550 points in 5 trading sessions, or 4%, and the push back to prior support was only natural.  It remains to be seen if the blue-chips can reclaim 13,000 this week and if they can’t we are expecting a test down to 12,600.

The S&P 500 jumped 10 points, or 0.7%, to end at 1,368.  The index had lost 60 points, or 4%, since the beginning of the month, and pushed resistance at 1,375.  The high came in at 1,374 which was a clue we used to start new positions after the index failed to clear prior support.  Tuesday’s drop to 1,358 still has us licking our chops for a drop below 1,350.

The Nasdaq added 25 points, or 0.8%, to finish at 3,016.  We had a feeling Tech would easily top 3,000 after falling over 100 points, or 3%, to start the month but we were looking for a close below 3,025 which is why we shorted the QQQ’s yesterday.  The index did trade to a high of 3,030 but fell well short of 3,050.     

The Russell 2000 popped a twelve-pack, or 1.6%, to close at 796.  The bulls made a strong run at 800 but fell short after peaking at 796.73 which was another clue we could get a failed rally.

We could have another busy morning so be on the lookout for New Trades as we have added some fresh ideas to our Watch List.

Futures are showing a slightly higher open as we head to press and look like this:  Dow (+20); S&P 500 (+2); Nasdaq 100 (+7).

 

Please remember, ALL “Exit Targets” and “Stop Targets” are targets.  You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless we list one.  We will send out a “Profit Alert” or “Trade Update” if we want you to close a position OR if a new trade comes out.  Otherwise, follow instructions at all times in the 9am and 1pm updates.  Also, we will usually give you a heads-up if we think we are going to send an email outside of these time frames but it is rare that we do.

 

PowerShares QQQ (QQQ, $66.45, up $0.32)

May 65 puts (QQQ120519P00065000, $1.15, down $0.05)

Entry Price:  $1.00 (4/11/12)
Exit Target: $2.00
Return:  15%
Stop Target:  None

Action:  We did a video back in January and showed how the QQQ’s were on the verge of breaking $60 when they were around $58.  We also said if $60 were cleared the QQQ’s could run to $70.  They hit a high of $68.55 at the beginning of the month so we came pretty close in hitting that target but resistance will be hard to clear unless Tech starts coming through with powerful earnings.  Our point is, if Tech fizzles from here the QQQ’s could retest $60 which gets these put options to $5, or a 400% gain.

 

Deckers Outdoor (DECK, $63.15, up $0.69)

May 50 puts (DECK120519P00050000, $0.60, flat)

Entry Price:  $0.50 (4/11/12)
Exit Target: $1.00
Return:  20%
Stop Target:  None

Action:  The 2-year chart shows a test to $50 could be coming.

 

First Solar (FSLR, $22.50, up $1.12)

May 18 puts (FSLR120519P00018000, $1.00, down $0.40)  

Entry Price:  $0.90 (4/11/12)
Exit Target: $1.80
Return:  11%
Stop Target:  None

Action:  This is our third trade with First Solar and the first two made 171% and 73%, respectively.  We were a little disappointed when we were stopped out of the May 19’s yesterday but we used the opportunity to get into the 18’s.  We fully expect shares to drop below $20 and our near-term target is the mid-teens.  

 

Tiffany & Company (TIF, $66.76, up $0.94)

May 62.50 puts (TIF0519P00062500, $0.95, down $0.25)

Entry Price:  $1.05 (4/9/12)
Exit Target: $2.10
Return:  -10%
Stop Target:  80 cents

Action:  We have a near-term target of $60 for Tiffany.    

 

Lululemon Athletica (LULU, $73.06, up $1.62)

May 67.50 puts (LULU120519P00067500, $1.40, down $0.60)

Entry Price:  $1.05 (4/4/12)
Exit Target: $2.10 (closed half at $1.60 on 4/11/12)
Return:  43%
Stop Target:  $1.20 (Hard Stop)

Action:  Shares traded to a high of $73.46 yesterday but we figured on a small back test following Tuesday’s $4 drop.  Our near-term target calls for a test down to $66, possibly $60.

 

C.H. Robinson Worldwide (CHRW, $64.00, up $0.66)

May 60 puts (CHRW120519P00060000, $0.90, down $0.15)

Entry Price:  $0.65 (4/4/12)
Exit Target: $1.30  (closed half at $0.90 on 4/11/12)
Return:  38%
Stop Target:  65 cents

Action:  The options traded to a low of 70 cents before rebounding as shares hit a high of $64.58 before fading.  The 52-week low is $62.30 and we still expect a trip below $60 is forthcoming, possibly $55.

 

Potash (POT, $42.76, down $0.09)

April 42.50 puts (POT120421P00042500, $0.75, flat)

Entry Price:  $0.55 (3/29/12)
Exit Target: $1.10 (closed half at $0.95 on 4/10/12)
Return:  55%
Stop Target:  None

Action:  We are looking for a drop down to $40 but we will likely close this trade by Friday.

 

Other 2012 Portfolio OPEN positions (8):  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.  This means we would not open any new positions.  We are still keeping track of the trades and we will record the results, accordingly, when we close them or the options expire.  Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.

 

magicJack VocalTec April 30 calls (from March 2012)

E*Trade Financial July 12 calls (from March 2012)

Bank of America January 12.50 calls 2013, July 12 calls (from March 2012)

Acme Packet April 40 calls (from February 2012)

Dendreon May 22 calls (from January 2012)

Silver Wheaton April 42 calls (from March 2012)

U.S. Oil Fund April 45 calls (from February 2012)

Sony April 22 calls (from February 2012)

 

WATCH LIST SECTION

These trades are NOT recommendations.  They 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 try not to have more than 12-15 open trades at any one time which is why we created a Watch List.  We will not list entry prices because these stocks are on the verge of breaking out or they could sell off.

 

Cypress Semiconductor (CY, $14.48, up $0.26)

May 14 puts (CY120519P00014000, $0.55, down $0.05)

June 14 puts (CY120616P00014000, $0.75, down $0.05)

Thoughts:  Shares could fall to $12, possibly $10.  The June 14 calls traded over 400 contracts yesterday while the May 14’s traded 135.  Open Interest is over 1,000 contracts for each options so traders have been building positions.

 

Green Mountain Coffee Roasters (GMCR, $43.21, up $1.74)

May 35 puts (GMCR120519P00035000, $1.40, down $0.30)

Thoughts:  We would love to see a pop to $45 today which is where we are looking to establish positions.

 

Netflix (NFLX, $99.81, down $2.11)

April 90 puts (NFLX120421P00090000, $0.60, up $0.05)

May 80 puts (NFLX120519P00080000, $2.30, up $0.20)

Thoughts:  Shares fell below $100 yesterday for the first time since late January.  We nearly added these puts yesterday but wanted to do some quick chart work before jumping in.

 

Acuity Brands (AYI, $54.11, up $1.07)

May 50 puts (AYI120519P00050000, $1.05, down $0.35)

Thoughts:  Watch for now but we would love to see one more bounce higher so we can get back into these puts.  

 

Apache (APA, $92.81, down $0.69)

May 85 puts (APA120519P00085000, $1.30, down $0.05)

Thoughts:  Apache traded to a high of $94.85 which stopped us out of our April puts.  We made a 100% return so we can’t be disappointed but we are looking to “rollover” the trade into the May 85 puts.

 

LinkedIn (LNKD, $97.66, down $0.33)

May 75 puts (LNKD120519P00075000, $0.75, flat)

Thoughts:  Shares of LinkedIn can be very volatile and could test $90 and then $80 on a continued breakdown.

 

Caterpillar (CAT, $101.75, up $1.32) 

May 90 puts (CAT120519P00090000, $1.00, down $0.40)

Thoughts:  We would like to see a push to $104-$105 which is where we may look to go short again.  

 

Sears Holdings (SHLD, $58.66, down $0.57)

May 45 puts (SHLD120519P00045000, $1.00, down $0.10)

Thoughts:  Watch for now.   

 

Apollo Group (APOL, $36.26, up $0.78)

May 36 puts (APOL120519P00036000, $1.40, down $0.40)

August 30 puts (APOL120818P00030000, $1.00, down $0.10)

Thoughts:  Watch for now.     

 

MGM Resorts (MGM, $13.60, up $0.53)    

January 17.50 calls 2013 (MGM130119C00017500, $0.80, up $0.10)

Thoughts:  We would love to see these options drop to 50 cents or less which is where we will start small positions.

 

Scientific Games (SGMS, $11.32, up $0.17)     

July 12.50 calls (SGMS120721C00012500, $0.60, up $0.05)

Thoughts:  Shares could be headed to $10 which is where we may look to establish a longer-term play.