9:00am (EST)

The Dow added 88 points, or 0.6%, to finish at 15,224 on Monday.  The blue-chips traded to a high of 15,262 and were able to clear and hold 15,200 into the close.  This clears the way for a test to 15,350 with the possibility of 15,500 triggering on continued strength.  Support is at 15,100-15,000.

The S&P 500 rallied 8 points, or 0.5%, to settle at 1,640.  The index reached a peak of 1,644 and faces major resistance at 1,650.  A break above this level should get 1,675 and all-time highs in play again.  Support is at 1,625 and the 50-day MA (moving average).

The Nasdaq gained 5 points, or 0.2%, to end at 3,484.  Tech was choppy for much of the second half of trading after reaching a high of 3,495 during the first half.  The bulls are trying to clear 3,500, and should, as long as 3,475 and yesterday’s low hold.  If not, there is risk back down to 3,450-3,400 (again).

The Russell 2000 advanced 4 points, or 0.4%, to close at 1,009.  Like the Dow and S&P 500, the small-caps held green all session long after trading up to 1,011 shortly after the open.  We said last week (and in May) there is a chance the index pushes 1,025 on the close above 1,000 and as long as support holds, this shouldn’t be a problem.

The S&P Volatility 500 ($VIX, 14.78, down 0.11) traded back above 15 to 15.27 on Monday’s open but still managed to stay under this level by the close.  The low checked in at 14.66.  We are expecting a test to 13.50 if the bulls stay in charge over the next few weeks.  A close back above 16 would signal another trading range ahead.

As we head to press, futures look like this:  Dow (+43); S&P 500 (+7); Nasdaq (+12).

We opened 4 New Trades yesterday, 2 for the Daily and 2 for the Weekly.  There are still a few trades we like this week, 1 is a possible earnings play, and another could be for our Weekly Wrap.

 

MEMBERS AREA

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 “New Trade” 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.  Closed Trades for 2013: 78-41, including the Weekly Wrap that is 26-3).

 

JPMorgan Chase (JPM, $54.70, up $0.71)

August 57.50 calls (JPM130817C00057500, $0.48, up $0.14)

Entry Price:  $0.38 (7/8/13)
Exit Target:  $10.75
Return:  26%
Stop Target:  None

Action:  We would like to see a close above $55 heading into earnings which are due out on Friday.  The 52-week high is at $55.90 and a break above this level should get shares challenging $58-$60.  Support is at $52.50.

 

Aruba Networks (ARUN, $16.12, down $0.06)

August 17 calls (ARUN130817C00017000, $0.45, down $0.10)

Entry Price:  $0.55 (7/8/13)
Exit Target:  $1.10
Return:  -18%
Stop Target:  None

Action:  We are looking for shares to make a run at $18, possibly $20 by mid-August.  Support is at $15.50 if $16 fails to hold.

 

Apollo Group (APOL, $17.53, down $0.41)

August 16 puts (APOL130817P00016000, $0.65, up $0.10)

Entry Price:  $0.65 (6/26/13)
Exit Target:  $1.30
Return:  0%
Stop Target:  None

Action:  Resistance is holding at $18 but there is risk up to $20 given the current volatility.  We will stick with the trade as long as this level holds.  A close below $17.25 this week should get this trade back on track and these are August puts so we have plenty of time to wait for the breakdown.

 

Rambus (RMBS, $9.42, up $0.02)

August 9 calls (RMBS130817C00009000, $0.80, flat)

Entry Price:  $0.55 (6/18/13)
Exit Target:  $1.10
Return:  45%
Stop Target:  None

Action:  We are looking for double-digits this week.  At $10, these options will be worth at least $1-$1.10 for a 100% return.  Support is at $9.

 

Scientific Games (SGMS, $12.15, down $0.14)

July 12.50 calls (SGMS130720C00012500, $0.25, flat)

Entry Price:  $0.20 (5/31/13)

Exit Target:  $0.60

Return:  25%

Stop Target:  None

Action:  We would like to get 60 cents or better for these options for a 200% winner and a run to $13 should get us there.  We have to be careful too as these are July options that expire in less than 2 weeks.  If shares slip back below $12, we will likely close the trade for a scratch.

 

Other 2013 Portfolio OPEN positions (4):  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 2013Portfolio link in the Members Area to view ALL open/ closed trades.

MGM Resorts International July 17 calls (from May 2013) – HOLD

Clean Energy Fuels July 16 calls (from May 2013) – HOLD

Spiders Dow Jones July 141 puts (from June 2013) – HOLD

iShares Russell 2000 Index July 90 puts (from June 2013) – HOLD

 

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.

 

Riverbed Technology (RVBD, $15.82, down $0.08)

August 17 calls (RVBD130817C00017000, $0.75, down $0.05)

September 18 calls (RVBD0921C00018000, $0.75, flat)

Thoughts:  There is risk down to $15 but if this level can hold, shares could challenge $18-$20 over the next 3-6 months.  The company is also a takeover target.

 

Applied Materials (AMAT, $15.14, down $0.08)

August 15 calls (AMAT130817C00015000, $0.60, down $0.10)

September 16 calls (AMAT130921C00016000, $0.35, down $0.05)

Thoughts:  We think shares can test $17 over the next month.  Support is at $15.

 

Domino’s Pizza (DPZ, $61.18, up $0.17)

July 60 calls (DPZ130720C00060000, $1.70, flat)

August 60 calls (DPZ130817C00060000, $3.25, flat)

Thoughts:  We mentioned a surge past $60 was coming and if you are in these trades, sweet, and protect profits on a drop back below $60.

 

Sony (SNE, $21.61, down $0.15)

July 21 calls (SNE130720C00021000, $1.10, down $0.10)

August 23 calls (SNE130817C00023000, $0.80, down $0.10)

Action:  A close above $22 could lead to $24.  Support is at $20 with risk down to $18 on an overshoot.

 

Salesforce.com (CRM, $38.43, down $0.51)

August 42.50 calls (CRM130817C00042500, $0.40, down $0.20)

Thoughts:  Support is at $36.  We are waiting for $40 to clear before possibly getting into a trade.  If resistance is taken out, we could see shares make a quick run to $42-$43 with a shot at $45.

 

Yahoo (YHOO, $25.52, down $0.16)

August 26 calls (YHOO130817C00026000, $0.90, down $0.05)

Thoughts:  Support is at $25 and a close below this level would get $24 in play.  A close back above $27 would be bullish for a run to $30.