9:00am (EST)

The bulls tried the get the entire herd into greener pastures by the close but some of the baby bulls got left behind.

The Dow added 26 points, or 0.2%, to end at 16,743.  The blue-chips made a brief trip into negative territory to 16,682 shortly after the open but rebounded to hold 16,700 and positive territory throughout the day.  The index reached an all-time intraday peak of 16,756.64 and remains on track to trigger 16,800-17,000.

The S&P 500 hopped over a point higher, or 0.1%, to settle at 1,924.97.  The index touched a low of 1,915 and was choppy throughout the second half before gaining a little traction into the close.  Support at 1,909 easily held and the intraday all-time high of 1,925.88 gets 1,950-1,960 in play.

The Nasdaq dipped 5 points, or 0.1%, to close at 4,237.  Tech opened slightly higher and touched 4,247.96 but failed at clearing 4,250 for the second-straight session.  The low of 4,207 held support at 4,200 but there is risk to 4,175-4,150 on a drop below this level.

The Russell 2000 slipped nearly a 6-pack, or 0.5%, to finish just below 1,129.  The small-caps traded to a low of 1,121 and held the 200-day by a point.  I mentioned 1,125-1,120 needs to be watched carefully this week and Monday’s hold was a good sign a run to 1,150 is possible over the near-term.

The S&P 500 Volatility Index ($VIX, 11.58, up 0.18). The close above 11.50 was slightly bearish but no bulls worries until 12.50-13.50 trips.

Much of Monday’s weakness can be attributed to Apple’s (AAPL, $628.65, down $4.35) “sell the news event”.  As long as $600 holds as support, shares could trade to $675.  This means on a 7-for-1 split shares could reach $96-$97.  Yesterday, I mentioned shares could open below $90 next week if Friday’s close is below $625.

There could be an opportunity for an option trade next week.  The options on a “700 strike” call option might be cheap enough for a near-term/ long-term play.  More to come.

Heading from desk to press, futures look like this:  Dow (-4); S&P 500 (-2); Nasdaq 100 (-2).

Closed Trades for 2014: 48-28 – the Weekly Wrap is 14-3 for 2014 (99-10, or 91% win rate, since 2011) and is designed for traders that want to use options with less risk.

All trades are dated and time stamped so new subscribers can look at our past history to see how the trades have played out. 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 12pm-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.

Fortinet (FTNT, $22.13, down $0.34)

July 24 calls (FTNT140719C00024000, $0.40, down $0.05)

Entry Price:  $0.45 (5/30/2014)

Exit Target:  $0.90

Return:  -12%

Stop Target:  None

Action:  Support at $22 was tested and the 50-day MA easily held following Monday’s dip to $21.97.  The 52-week high is at $23.93.


CVS Caremark (CVS, $78.30, down $0.02)

July 80 calls (CVS140719C00080000, $0.75 cents, down $0.05)

Entry Price:  $0.52 (5/28/2014)

Exit Target:  $1.10 (closed 1/3 @ $0.80 on 5/30/14)

Return:  51%

Stop Target:  60 cents, raise to 70 cents (Stop Limit)

Action:  After testing $78 on the open, shares traded to a high of $78.60 before fading into the red by the close.  I have raised the Stop Limit to 70 cents on the remaining 2/3rd’s of the position.


Apollo Group (APOL, $26.66, down $0.14)

June 25 puts (APOL140621P00025000, $0.40, flat) Entry Price:  $0.55 (4/28/2014)

Exit Target:  $1.10 (limit order to close half)

Return:  -27%

Stop Target:  None


August 23 puts (APOL140816P00023000, $0.70, flat)

Entry Price:  $0.70 (4/28/2014) Exit Target:  $1.40 (limit order to close half)

Return:  0%

Stop Target:  None

Action:  Yesterday’s low was $26.46.  A break below $26 should lead to the low $20’s.  Strong resistance is at $28.


Bed, Bath & Beyond (BBBY, $60.97, up $0.12)

June 60 puts (BBBY140621P00060000, $0.60, down $0.05)

Entry Price:  $0.60 (5/14/2014)

Exit Target:  $1.20

Return:  0%

Stop Target:  None


August 55 puts (BBBY140816P00055000, $0.60, flat)

Entry Price:  $0.63 (5/14/2014)

Exit Target:  $1.25

Return:  -5%

Stop Target:  None

Action:  Support is at $60 and a break below this level will likely lead to $57.50-$55.  An analyst downgrade would be nice this week.  Resistance is at $61.50-$62.50.


Twitter (TWTR, $31.75, down $0.69)

January 50 calls 2015 (TWTR150117C00050000, $1.00, down $0.20) LEAP option

Entry Price:  $1.75 (5/8/2014)

Exit Target:  $3.50-$5 Return:  -42%

Stop Target:  None

Action:  Support has moved up to $32.50.  Resistance is at $35.

Other 2014 Portfolio OPEN positions (3):  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 2014 Portfolio link in the Members Area to view ALL open/ closed trades.

iShares Russell 2000 June 103 puts (from May 2014)

Kirkland’s June 15 puts (from May 2014)

McDonald’s July 95 puts (from May 2014)