9:00am (EST)

PowerShares QQQ (QQQ, $62.20, down $0.70)

August 59 puts (QQQ120818P00059000, $0.95, up $0.15)

Entry Price:  $0.75 (6/27/12)
Exit Target:  $1.50
Return:  27%
Stop Target:  None  

Action:  The QQQ’s traded to a low of $61.53 which got our puts up to $1.13 for nearly a 50% return.  We would like to see a close below $61.50 today.

 

AOL (AOL, $27.50, up $0.19)

August 24 puts (AOL120818P00024000, $0.55, down $0.05)

Entry Price:  $0.53 (6/26/12)
Exit Target:  $1.00
Return:  4%
Stop Target:  None

Action:  AOL will do a “Dutch-auction” tender with the $1 billion that was burning a hole in their pocket instead of giving shareholders a dividend.  We expect resistance to hold at $28 but there is risk up to $30.  We are still looking for a test to $26 over the near-term and then $24.   

 

Consumer Discret Select Spider (XLY, $42.87, down $0.24)

August 41 puts (XLY120818P00041000, $0.70, up $0.05)

Entry Price:  $0.80 (6/25/12)
Exit Target:  $1.60
Return:  -13%
Stop Target:  None

Action:  There is risk to $45 but we are expecting a test to $40 over the next week or two; mid-$30’s by August.   

 

Coinstar (CSTR, $66.40, down $1.03)   

July 60 puts (CSTR120721P00060000, $0.80, up $0.25)

Entry Price:  $0.90 (6/25/12)
Exit Target:  $1.80
Return:  -11%
Stop Target:  40 cents

Action:  Coinstar touched a low of $64.58 yesterday and we would like to see a close below $65 before the weekend.  There is risk to $68.

 

iShares Dow Jones US Real Estate (IYR, $62.56, up $0.56)

August 57 puts (IYR120818P00057000, $0.55, down $0.15)

Entry Price:  $0.85 (6/25/12)
Exit Target:  $1.70
Return:  -35%
Stop Target:  40 cents

Action:  The iShares bounced back to finish positive for the session after kissing a low of $61.39.  We would like to see a close below $62 today but there could be a back test to $63.50-$64.

 

KLA-Tencor (KLAC, $47.50, down $0.61)

August 43 puts (KLAC120818P00043000, $0.95, up $0.10)

Entry Price:  $0.90 (6/25/12)
Exit Target:  $1.80
Return:  6%
Stop Target:  45 cents

Action:  Shares traded down to $46.90 yesterday and a close below this level would be nice heading into next week. 

 

Illinois Tool Works (ITW, $50.94, down $0.65)

July 50 puts (ITW120721P00050000, $0.85, up $0.10)

Entry Price:  $1.05 (6/4/12)
Exit Target:  $2.10
Return:  -19%
Stop Target:  None

Action:  Shares came close to falling below $50 as the low for the session was $50.35.  Our puts reached a peak of $1.15 and were showing a 10% profit before slipping.  We still expect to get $2 for them once shares fall below $50 and test $48.

 

Apollo Group (APOL, $35.70, down $0.23) 

August 27 puts (APOL120818P00027000, $0.30, flat)

Entry Price:  $0.90 (5/10/12)
Exit Target:  $1.80
Return:  -67%
Stop Target:  45 cents

Action:  Resistance at $36 is holding up.  The Department of Education (DOE) said it will conduct a review on Apollo’s verification process for federal student financial aid programs.  The probe will start July 16 and they have already informed Apollo the “verification codes” from 2010-2011 are misreported.      

 

Other 2012 Portfolio OPEN positions (8):  These are trades that are still open in the portfolio but are down over 50%.  They have longer expiration dates and 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 if the options expire.  Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.

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

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

Best Buy July 16 puts (from May 2012)

First Solar July 10 puts (from May 2012)

FedEx July 77.50 puts (from June 2012)

Potash July 35 puts (from June 2012)

iShares Russell 2000 July 70 puts (from June 2012)

Facebook July 24 puts (from June 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 but these are the trades we are watching as new candidates.

Health Care Select Sector Spider (XLV, $37.30, down $0.17)

August 38 calls (XLV120818C00038000, $0.50, down $0.15)

August 36 puts (XLV120818P00036000, $0.45, down $0.20)

Thoughts:  A move above $38 would be bullish while a break below $36 could spell trouble.  Both of the options fell as the premiums were inflated going into yesterday’s big announcement but we want to do some more chart work over the weekend before picking an option.

 

McKesson (MCK, $93.27, up $0.96)

July 95 calls (MCK120721C00095000, $0.60, up $0.10)

Thoughts:  This is our other choice for a healthcare play as shares are near a decade high.  The chart is showing a possible breakout to blue-sky territory and could reach triple-digits.

 

Freeport-McMoRan Copper & Gold (FCX, $32.26, up $0.12)

August 29 puts (FCX120818P00029000, $0.80, down $0.05)

Thoughts:  We like this trade and would like to see a test to $32.50-$33 which is where we might give Freeport another ride.

 

Netflix (NFLX, $67.36, up $0.87)

August 50 puts (NFLX120818P00050000, $1.05, down $0.15)

July 60 puts (NFLX120721P00060000, $0.80, down $0.30)

Thoughts:  If shares fall below $65 a quick test to $50 could be in the cards.  We like the puts we have listed but the premiums are a little juiced which could keep us on the sidelines.

 

iShares Dow Jones Transportation Average (IYT, $90.80, up $0.63)

August 83 puts (IYT120818P00083000, $1.05, down $0.15)

July 86 puts (IYT120721P00086000, $0.70, down $0.35)

Thoughts:  Resistance has held up well at $95 and a drop below $90 would be bearish. 

 

Schlumberger (SLB, $62.72, up $1.25)              

August 55 puts (SLB120818P00055000, $0.90, down $0.20)

Thoughts:  We may be getting an opportunity for a quick trade so stay ready.