9:00am (EST) continued…

The Dow dipped 32 points, or 0.2%, to close at 15,451.  The blue-chips traded down to a low of 15,415 and held 15,400 before recovering some of their losses.  A drop below 15,350 today could be bearish for a further decline to 15,200 but the bulls will be trying to clear 15,500-15,550 on another Bernanke bounce.

The S&P 500 slipped 6 points, or 0.4%, to settle at 1,676.  We wanted to see the index hold 1,675 and it did but not before a test down to 1,671 late in the day.  There is further risk down to 1,650 on a close below this level but a trip back above 1,685 should get 1,700 in play.

TheNasdaq fell 9 points, or 0.25%, to finish at 3,598.50.  We wanted to see Tech hold 3,600 into the close but the bulls missed by a point and a half.  There is help at 3,575 on further weakness and Tuesday’s low checked in at 3,589.  Another drive past 3,600 would be a good sign the bulls are still headed for higher ground while a drop below 3,575 would suggest 3,550-3,500 could come back into play.

The Russell 2000 declined 4 points, or 0.4%, to end at 1,038.  The small-caps were weak for much of the session after seeing a little daylight at the open.  The index has led the rally to new highs and will also led the way down on any pullback.  We still believe a trip to 1,050 is on the map as long as 1,035 sticks.  Yesterday’s low was 1,036.

The S&P Volatility 500 Index ($VIX, 14.42, up 0.63) jumped 5% and closed back above 14 after peaking at 14.56.  The index easily held 15 but the warning bells will sound on a close back above this level.  Volatility could be extreme over the next 2 days so if 15 gets stretched, 17.50 will need to stick.  A drop back below 13.50 would be bullish.

We closed 3 more winning trades yesterday and we are once again in a great position to play the market’s next major move.  While we do hope there is one more push to higher highs, we will be ready to play put options should Bernanke drop the ball.

Futures are showing a slightly higher open as we head to press:  Dow (+23); S&P 500 (+5); Nasdaq 100 (+9).

Subscribers, check the Members Area for the updates.

 

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 tradesor “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: 81-41, including the Weekly Wrap that is 26-3).

 

Aruba Networks (ARUN, $17.27, down $0.32)

August 17 calls (ARUN130817C00017000, $0.95, down $0.20)

Entry Price:  $0.55 (7/8/13)
Exit Target:  $1.10
Return:  73%
Stop Target:  75 cents (Hard Stop)

August 18 calls (ARUN130817C00018000, $0.50, down $0.10)

Entry Price:  $0.55 (7/15/13)
Exit Target:  $1.10
Return:  -9%
Stop Target:  None

October 22 calls (ARUN131019C00022000, $0.50, down $0.05)

Entry Price:  $0.50 (7/15/13)
Exit Target:  $1.00
Return:  0%
Stop Target:  None

Action:  We would like to see $17.50 hold by the close.

 

Sony (SNE, $21.96, down $0.28)

August 24 calls (SNE130817C00024000, $0.45, down $0.10)

Entry Price:  $0.50 (7/11/13)
Exit Target:  $1.00
Return:  -10%
Stop Target:  None

August 26 calls (SNE130817C00026000, $0.20, flat)

Entry Price:  $0.20 (7/11/13)
Exit Target:  $0.60
Return:  0%
Stop Target:  None

October 25 calls (SNE131019C00025000, $0.85, down $0.05)

Entry Price:  $0.80 (7/11/13)
Exit Target:  $1.60
Return:  6%
Stop Target:  None

Action:  Resistance is at $23-$24 and a close above $22.50 should get 52-week highs in play.  News that China is lifting the ban of gaming counsels could have a huge impact on this stock.  Support is at $21 and the 50-day MA and we like these trades going forward as long as $20 holds.

 

Apollo Group (APOL, $18.97, up $0.27)

August 16 puts (APOL130817P00016000, $0.20, down $0.05)

Entry Price:  $0.65 (6/26/13)
Exit Target:  $1.30
Return:  -69%
Stop Target:  None

Action:  We will stick with the trade as long as $20.25 holds and we would like to see a trip below $18 this week.  Yesterday’s low was $18.05.

 

Rambus (RMBS, $9.85, down $0.05)

August 9 calls (RMBS130817C00009000, $1.05, flat)

Entry Price:  $0.55 (6/18/13)
Exit Target:  $1.10 (closed half @ $1.05 on 7/16/13)
Return:  91%
Stop Target:  None

Action:  We closed half of the trade yesterday to lock-in profits ahead of earnings.  We didn’t want to see nearly a triple-digit return go to waste in case there are some skeletons in this quarter’s closet.  Yesterday’s high was $9.94.

Earnings are due out on Thursday.  A break above $10 is possible on a match or beat while $9 could come back into play on a miss.  Analysts are looking for 11 cents a share on revenue of $149 million.

 

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. 

Skyworks Solutions (SWKS, $22.70, up $0.80)

August 24 calls (SWKS130817C00024000, $0.80, up $0.20)

Thoughts:  Earnings are due out on Thursday with shares near 52-week lows.

 

MGM Resorts International (MGM, $15.70, down $0.02)

August 16 calls (MGM130817C00016000, $0.50, down $0.05)

September 17 calls (MGM130921C00017000, $0.45, flat)

Thoughts:  Shares are on the verge of fresh 52-week peaks.  A close above $16 would be supper bullish for a push towards $20 by yearend.  A vote to approve the company’s proposal to build a casino in Springfield, Massachusetts was in the balance on Tuesday.

 

Nvidia (NVDA, $14.69, up $0.08)

August 15 call (NVDA130817C00015000, $0.35, flat)

Thoughts:  Shares cleared resistance at $14.25 and a close above $14.75 should get $15-$15.50 in play.  Support is at $13.75, if $14,25 fails.  We have a 6-12 month price target of $20 for the stock.

 

Finisar (FNSR, $18.24, down $0.09)

August 19 calls (FNSR130817C00019000, $0.50, down $0.05)

Thoughts:  Shares should challenge $20 over the near-term with support moving up from $16 to $17.

 

Applied Materials (AMAT, $16.58, up $0.11)

August 17 calls (AMAT130817C00017000, $0.35, flat)

September 17 calls (AMAT130921C00017000, $0.50, flat)

Thoughts:  We think shares can test $17 over the next month.  Support is at $15.75.

 

Scientific Games (SGMS, $12.73, up $0.15)

August 12.50 calls (SGMS130817C00012500, $0.85, up $0.05)

Thoughts:  We may get into this trade on a close above $12.50.

 

Salesforce.com (CRM, $41.84, down $0.14)

August 45 calls (CRM130817C00045000, $0.50, flat)

November 50 calls (CRM131116C00050000, $0.95, flat)

Thoughts:  Shares could make a run at $45 as long as $40 holds.

 

Yahoo (YHOO, $26.88, down $0.46)

August 28 calls (YHOO130817C00028000, $0.65, down $0.10)

Thoughts:  Shares were up in after-hours on a mixed earnings report.  A close back above $27 would be bullish for a run to $30.  Support is at $26.