9:00am (EST)

Tuesday’s action is suggesting a lower to flat June but things could change depending on what comes out of Europe.  Perhaps Wall Street is waiting to see if they “do whatever it takes” to get their economy into second gear.

The bears got a rare Tuesday win but at this point they will take whatever they can get.  The bulls tried to push higher highs so my near-term fluff targets are still in play but Tech and the small-caps are struggling.

The Dow dipped 21 points, or 0.1%, to close at 16,722.  The blue-chips traded to a low of 16,690 and were in negative territory the entire session.  Support at 16,700-16,600 is holding up well but there would be risk to 16,400-16,350 on a close below the latter.  Near-term resistance remains 16,800-17,000.

The S&P 500 slipped three-quarters of a point, or 0.04%, to finish at 1,924.24.  The index bottomed at 1,918 and did make a slight trip into positive territory to 1,925.07.  Support is at 1,909-1,909 and a close above 1,925 keeps 1,950-1,960 in the mix.

The Nasdaq dipped 5 points, or 0.1%, to end at 4,237.  Tech opened below 4,125 at 4,222 and kissed green at 4,240 before a test to 4,215.  Backup support at 4,000 held but the bears are eying 3,975-3,950 this week.  The bulls need a close above 4,250 this week.

The Russell 2000 fell 3 points, or 0.2%, to settle at 1,126.  The small-caps traded to 1,129 before fading to 1,118 during Wall Street’s lunch break.  It was the second straight session the bears pushed the 200-day MA for their third straight win.  A “death cross” is forming that could intersect at 1,125 and I have warned any closes below this level could be dangerous.

The S&P 500 Volatility Index ($VIX, 11.87, up 0.18).  The index continues to nudge higher as the bears have won the past three sessions but 12.50 continues to hold.  Yesterday’s high reached 12.13.

The market is leaving clues lower lows are coming but the bulls are still roaming.  Perhaps June is setting up for a continued Charlie Brown trading range.

There could be a New Trade today in the midday update so make sure you check back between 12-1pm (EST) today!  There could also be a Weekly Wrap alert as well.

Closed Trades for 2014: 49-28 – 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, $22.20, up $0.07)

July 24 calls (FTNT140719C00024000, $0.40, flat)

Entry Price:  $0.45 (5/30/2014)
Exit Target:  $0.90
Return:  -11%
Stop Target:  None

Action:  Support at $22 was tested as shares traded down to $21.94.  The 52-week high is at $23.93.

Apollo Group (APOL, $26.64, down $0.02)

June 25 puts (APOL140621P00025000, $0.30, down $0.10)

Entry Price:  $0.55 (4/28/2014)
Exit Target:  $1.10 (limit order to close half)
Return:  -45%
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:  Tuesday’s low was $26.29.  A break below $26 should lead to the low $20’s.  Strong resistance is at $28.  The June puts continue to get drained as the time premium starts to erode so shares need to close below $26 this week to keep the bulls of the stock uneasy.

The company will report earnings in a couple of week.  The June options expire in 2 weeks from Friday.  The first half of the trade could come down to the wire.  I have shown how these options were down over 90% and turned positive a few weeks ago.  I probably should have closed half of the trade as this dragon won’t die but hopefully it does by June expirarion.

Bed, Bath & Beyond (BBBY, $60.98, up $0.01)

June 60 puts (BBBY140621P00060000, $0.50, down $0.10)

Entry Price:  $0.60 (5/14/2014)
Exit Target:  $1.20
Return:  -17%
Stop Target:  None

August 55 puts (BBBY140816P00055000, $0.55, down $0.05)

Entry Price:  $0.63 (5/14/2014)
Exit Target:  $1.25
Return:  -13%
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.  BBBY also reports the same week APOL does.  I am expecting both companies to miss Wall Street’s expectations and they could/ should pre-announce if this is the case.

Twitter (TWTR, $32.58, up $0.83)

January 50 calls 2015 (TWTR150117C00050000, $1.20, up $0.20) LEAP option

Entry Price:  $1.75 (5/8/2014)
Exit Target:  $3.50-$5
Return:  -31%
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)