9:00am (EST) continued…

The Dow gained 22 points, or 0.1%, to finish at 15,567 on Tuesday.  The blue-chips traded to a high of 15,604 on the open before giving back all of its gains to trade down to 15,544 (down a point) shortly afterwards.  The index was able to hold green throughout the remainder of the session and tested 15,600 afain late in the day and was a bullish sign.  Next up is a possible push to 15,800-16,000.  Support remains 15,400-15,350.

The S&P 500 slipped 3 points, or 0.2%, to settle at 1,692.  The index kissed another all-time intraday high of 1,698.78 before testing a low of 1,691.  The bulls have come too far not to ring the register at 1,700, and should, as long as support holds at 1,685-1,675.

The Nasdaq dropped 21 points, or 0.6%, to end at 3,579.  Tech traded up to 3,606 after the opening bell but quickly faded before bottoming at 3,576 just before the close.  Support at 3,575 continues to hold like a Bob Segar song and should recover 3,600 on the Apple news.  If not and the index closes below 3,575 there could be trouble ahead.

The Russell 2000 dipped a point, or 0.1%, to close at 1,052.  The small-caps charged to another all-time intraday high of 1,056.86 before falling back to test support at 1,050 after trading to 1,050.87.  We believe the index still has another 2% in the tank for a run to 1,075 as long as support at 1,050-1,040 holds up.

The S&P 500 Volatility Index ($VIX, 12.66, up 0.37) was up 3% after kissing 13.06.  No need to get cautious until 13.50 trips as the bulls look to push 11-10 over the near-term.

Side Note:  We talked about Gold testing $1,350 and yesterday’s high checked-in at $1,348.70.  This is a crucial level as we could see a breakout to new highs and maybe, a big maybe, run to $1,400-$1,425.  If resistance holds here for the rest of the week, look out below.

As we head to press, futures look like this:  Dow (+31); S&P 500 (+5); Nasdaq 100 (+29).  Subscribers, hit 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: 84-45, including the Weekly Wrap that is 27-3).

 

Royal Bank of Scotland (RBS, $10.34, up $0.02)

August 10 calls (RBS130817C00010000, $0.60, up $0.10)

Entry Price:  $0.55 (7/23/13)
Exit Target:  $1.10
Return:  9%
Stop Target:  None

 

November 12.50 calls (RBS131116C00012500, $0.20, flat)

Entry Price:  $0.20 (7/23/13)
Exit Target:  $0.60
Return:  0%
Stop Target:  None

Action:  Shares spiked to $10.50 on Tuesday’s open and we really like this trade going forward.  The 52-week high is at $11.84 and we believe shares can trade up to $13 over the next few months.

 

Finisar (FNSR, $18.45, down $0.20)

August 19 calls (FNSR130817C00019000, $0.50, down $0.10)

Entry Price:  $0.50 (7/18/13)
Exit Target:  $1.00
Return:  0%
Stop Target:  None

Action:  Shares should challenge $20 over the near-term, possibly $25 by yearend.  Support is at $17.  The company has some sweet, new products that could add some extra pennies to their earnings for the current quarter.

 

Skyworks Solutions (SWKS, $24.25, up $0.32)

August 25 calls (SWKS130817C00025000, $0.55, up $0.15)

Entry Price:  $0.55 (7/17/13)
Exit Target:  $1.10
Return:  0%
Stop Target:  None

Action:  A move above $25 would be bullish for a run to $30.  The potential for a big return is there with this trade as long as $23.50 holds.

 

MGM Resorts International (MGM, $16.12, down $0.04)

August 16 calls (MGM130817C00016000, $0.70, flat)

Entry Price:  $0.50 (7/17/13)
Exit Target:  $1.00
Return:  40%
Stop Target:  50 cents, raise to 55 cents (Hard Stop)

 

September 17 calls (MGM130921C00017000, $0.50, down $0.05)

Entry Price:  $0.42 (7/17/13)
Exit Target:  $1.00
Return:  19%
Stop Target:  42 cents (Hard Stop)

Action:  Shares tested a high of $16.45 yesterday, a 52-week peak, before ending slightly lower.  The August 16 calls reached 82 cents and will hit our $1 target at $16.75-$17.  A close above $16.50 should trigger $17-$18 on a multiyear breakout and we like this trade as long as $15.75 holds.  If shares fall below this level, close the trade as our Hard Stops will likely trigger.

 

Aruba Networks (ARUN, $17.91, up $0.23)

August 18 calls (ARUN130817C00018000, $0.70, up $0.10)

Entry Price:  $0.55 (7/15/13)
Exit Target:  $1.10
Return:  27%
Stop Target:  55 cents

October 22 calls (ARUN131019C00022000, $0.60, up $0.10)

Entry Price:  $0.50 (7/15/13)
Exit Target:  $1.00
Return:  20%
Stop Target:  40 cents

Action:  Yesterday’s high was $17.95 and a close above $18.10 should really get this trade going.  We believe shares can make a run to $20-$22 over the next few months.  Support is at $17.25 and we will likely close the trade if shares fall below $17.

 

Sony (SNE, $23.01, up $0.42)

August 24 calls (SNE130817C00024000, $0.55, up $0.10)

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

August 26 calls (SNE130817C00026000, $0.15, flat)

Entry Price:  $0.20 (7/11/13)
Exit Target:  $0.60
Return:  -25%
Stop Target:  None

October 25 calls (SNE131019C00025000, $1.00, flat)

Entry Price:  $0.80 (7/11/13)
Exit Target:  $1.60
Return:  25%
Stop Target:  None

Action:  We loved the close above $23 yesterday and shares traded up to $23.10.  The 52-week high is $23.38.  The next level of resistance is at $24.  News that China is lifting the ban of gaming counsels could have a huge impact on this stock that could push shares to $30 over the next 6-12 months.  Support is at $22 and then the 50-day MA.

 

Other 2013 Portfolio OPEN positions (1):  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

 

Apollo Group August 16 puts (from June 2013) – HOLD – We still like this trade and will bring back coverage once shares fall below $18.  We will close the trade if the stock clears $20, and if we do, we will send out a Trade Alert.

 

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.

 

SolarCity (SCTY, $40.81, down $1.18)

August 45 calls (weekly) (SCTY130802C00045000, $0.50, down $0.35)

Thoughts:  A run to $45 appears likely and a close above this level could lead to $50.  Support is at $40 and if it cracks we may look at put options.  Earnings are due out August 5 and the company is expected to report a loss of 38 cents a share of revenue of $27.4 million.  Anything above these numbers could get shares rolling back towards 52-week highs.

 

Zillow (Z, $72.99, up $1.40)

August 85 calls (Z130817C00085000, $0.50, down $0.40)

Thoughts:  Shares are breaking out to new 52-week highs but the premiums were deflated yesterday and what we wanted to see.  However, we are still doing some chart work and research on where shares could be headed when they report earnings on August 6.  Shares reached a peak of $74.55 yesterday.

 

Trius Therapeutics (TSRX, $11.47, down $0.69)

August 12.50 calls (TSRX130817C00012500, $0.50, down $0.25)

September 15 calls (TSRX130921C00015000, $0.40, down $0.15)

Thoughts:  A run to $15 could be coming and the call option pits have been active.  Support is at $11 but could be shaky down to $9 if there is continued weakness.

 

Exact Sciences (EXAS, $13.48, down $0.84)

August 14 calls (EXAS130817C00014000, $0.45, down $0.50)

Thoughts:  A close above $14 would be super bullish for a run to the upper teens as long as support at $12.50 and the uptrend line holds.

 

TearLab (TEAR, $13.30, up $0.88)

August 12.50 calls (TEAR130817C00012500, $1.45, up $0.55)

September 15 calls (TEAR130921C00015000, $0.65, up $0.25)

Thoughts:  The 52-week high is at $12.97 and shares are up 300+% from the 52-week low of $3.10.  Earnings are due out in early August.

 

Rambus (RMBS, $10.11, down $0.56)

August 10 calls (RMBS130817C00010000, $0.50, down $0.35)

January 12 calls (RMBS140118C00012000, $0.60, down $0.20)

Thoughts:  If $10 holds, we could go long again on Rambus.

 

Spider Gold Shares (GLD, $129.71, up $0.87)

August 123 puts (GLD130817P00122000, $0.75, down $0.15)

September 118 puts (GLD130921P00118000, $0.95, down $0.10)

Thoughts:  We would like to see a failed test to $130 and we could go short this week if it looks like resistance will hold.

 

Nvidia (NVDA, $14.21, down$0.02)

August 14 call (NVDA130817C00014000, $0.60, flat)

Thoughts:  There is additional support is at $13.50, if $14.25 fails this week.  A close back above $14.75 would be bullish.

 

Scientific Games (SGMS, $13.33, up $0.09)

August 12.50 calls (SGMS130817C00012500, $1.15, flat)

Thoughts:  We said a close above $12.50 would be bullish for a run to the mid-teens.

 

Salesforce.com (CRM, $42.54, up $0.50)

August 45 calls (CRM130817C00045000, $0.50, up $0.10)

August 40 puts (CRM130817P00040000, $0.50, down $0.10)

Thoughts:  We could be at a perfect price point to make this a strangle option trade.  There could be a back test to $42 and where we may establish a position if support holds.  We would consider puts on a drop back below $41.50.