July 2012 | Members

Do not risk more than 5% of your trading account on any one trade but do try to take ALL of the trades.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.

12:30pm (EST)

Special Notice: We will cover the charts on Sunday but don’t get nervous if there is a slight push higher here at the top. We often say support and resistance gets stretched but the patterns are still showing bearish formations. If the euro continues to get pinched and Spain’s and Italy’s bonds start to inch up, which they are, then the market will be in the same boat as it was before last Friday’s surge. We also said volatility works both ways and 2Q earnings start next week.

PowerShares QQQ (QQQ, $64.02, up $0.13)

August 59 puts (QQQ120818P00059000, $0.30, flat)

Entry Price:  $0.75 (6/27/12)
Exit Target: $1.50
Return: -60%
Stop Target: None

Action: We would like to see $65 hold but there is risk to $67. The August options have 43 days before they expire and we are expecting a drop below $60 by then.

AOL (AOL, $28.65, down $0.06)

August 24 puts (AOL120818P00024000, $0.30, flat)

Entry Price:  $0.53 (6/26/12)
Exit Target: $1.00
Return: -43%
Stop Target: None

Action: Shares seem to be topping although we still aren’t ruling a test to $30. We are expecting a test to $26 over the near-term and there is a huge gap to fill down to $20 once this level is taken out.

Consumer Discret Select Spider (XLY, $44.04, up $0.17)

August 41 puts (XLY120818P00041000, $0.30, flat)

Entry Price:  $0.80 (6/25/12)
Exit Target: $1.60
Return: -63%
Stop Target: None

Action: There is risk to $45 but we are expecting a test to $40 by August.

iShares Dow Jones US Real Estate (IYR, $64.72, down $0.26)

August 57 puts (IYR120818P00057000, $0.30, flat)

Entry Price:  $0.85 (6/25/12)
Exit Target: $1.70
Return: -78%
Stop Target: None

Action: We are looking for a drop below $60 by mid-August.

KLA-Tencor (KLAC, $48.90, down $0.06)

August 43 puts (KLAC120818P00043000, $0.55, flat)

Entry Price:  $0.90 (6/25/12)
Exit Target: $1.80
Return: -39%
Stop Target: 45 cents

Action: The 100-day MA is at $49.56 and shares reached $49.50 on Monday. We are expecting a close below $45 over the next week and $40 by mid-August.

Other 2012 Portfolio OPEN positions (11):  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)
Apollo Group August 27 puts (from May 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)
Coinstar July 60 puts (from June 2012)
Illinois Tool Works July 50 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.

We will update this section in the morning.