9:00am (EST)

The small-caps and Tech tested my December 2013 “fluff” targets in March and while it took another 3 months, the broader market triggered fresh all-time highs throughout the week.

The Dow zoomed 88 points, or 0.5%, to finish at session and an all-time of 16,924.28.  The S&P 500 surged 9 points, or 0.5%, to match the blue-chips record as it ended at at all-time high of 1.949.44.

The Nasdaq zoomed 25 points, or 0.6%, to settle at 4,321 and traded to a high of 4,322.  The 52- week high is at 4,371.71.  The Russell 2000 roared 11 points, 1%, to close at 1,165.  The small-caps kissed 1,167 and are just 1% away from clearing 1,175.

The S&P 500 Volatility Index ($VIX, 10.73, down 0.95) closed at session lows.  The bulls ability to hold 12.50 throughout the week was another solid sign fresh highs in the market would come into play.

I reiterated Dow 16,800-17,000; S&P 1900-1,909 (specifically); Nasdaq 4,400-4,500; and Russell 1,200-1,225 in March.  I have talked about the VIX hitting fresh 52-week lows and possibly single-digits all year long while the talking heads continue to get it wrong.

My yearend price targets from February for Dow 19,000; S&P 2,100; Nasdaq 4,800-5,000; and Russell 1,400 may have seemed unrealistic (again) as I said the Dow could move another 3,000 points this year.  The suit-and-ties that said no way 1,900 would trigger in May for the S&P, they were wrong once again with talk of 2,000 now surfacing.

Last year, I showed chart work and said the Dow could move from 13,000 to 16,000 and subscribers were very surprised.  Not after the money they made.

My price targets for 2014 are/ were the HIGHEST out of dozens of Wall Street firms that predicted the S&P would gain just 3%-5% this year.

My chart work is always done in February for yearend price targets, or “educated guesses”.  New subscribers can check the 3/2/2014 Weekly Wrap and the 3/3/2014 Daily for all of the predictions and chart work.

The point I want to make is now that these fluff targets are triggering, the wall or worry becomes that much taller.  All of a sudden, the famous pros that were cautious and said to sell everything are now bullish again.

The bears could have a long hungry summer or they get some action somewhere down the road.

I have much more to cover but I wanted to take the weekend to get more thoughts together and to enjoy last week’s action.  The chart work from last week paid in spades and the real grind begins next week.  For new subscribers, go to last Sunday/ Monday updates to see the channels the bulls cleared.

I predicted in late May there could be a rally through mid-June if there was a break out of the month long, incredibly tight trading range.  I also mentioned the following week is option expiration week.  The next round of earnings start in July.

The May action may have seemed boring but I often remind readers never short a dull market.

The current trades got some nice pops last week but naturally some of the put trades did not.  A rising tide lifts all boats but they can serve as protection in case the waters get choppy later in the month.


Closed Trades for 2014: 50-28 – the Weekly Wrap is 15-3 (83%) for 2014 (100-10, 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.

Imax (IMAX, $25.92, up $0.04)

September 28 calls (IMAX140920C00028000, $0.70, flat)

Entry Price:  $0.60 (6/5/2014)
Exit Target:  $1.20
Return:  17%
Stop Target:  None

Action:  Shares kissed $26.10 on Friday.  Resistance is at $26.25 and the 50-day MA.  A close above this level should get $28-$30 in play.  Support is at $25.50 and I will stick with the trade as long as $25-$24 holds.

Limelight Networks (LLNW, $2.88, up $0.19)

September 3 calls (LLNW140920C00003000, $0.30, up $0.05)

Entry Price:  $0.15 (6/4/2014)
Exit Target:  $0.45
Return:  100%
Stop Target:  None

December 3 calls (LLNW141220C00003000, $0.40, up $0.05)

Entry Price:  $0.20 (6/4/2014)
Exit Target:  $0.60
Return:  100%
Stop Target:  None

Action:  I’m expecting a near-term run to $3.  Shares traded to a high of $2.92 Friday.

Open Interest is at 1,700 on the September 3 calls and just 367 for the December 3 calls.  This means the option market is expecting the move above $3 to come sooner rather than later.

If shares make a run to $3.50, the return should be 200% for each trade.  A close above $4 would make both calls worth $1 and an even bigger payday.

Fortinet (FTNT, $23.03, up $0.24)

July 25 calls (FTNT140719C00025000, $0.35, up $0.05)

Entry Price:  $0.25 (6/4/2014)
Exit Target:  $0.50
Return:  40%
Stop Target:  None

July 24 calls (FTNT140719C00024000, $0.60, up $0.05)

Entry Price:  $0.45 (5/30/2014)
Exit Target:  $0.90
Return:  33%
Stop Target:  None

Action:  The 52-week high os $23.93 and shares reached $23.12 on Friday.  Support is at $22.

Twitter (TWTR, $33.33, down $0.56)

January 50 calls 2015 (TWTR150117C00050000, $1.25, down $0.20) LEAP option

Entry Price:  $1.75 (5/8/2014)
Exit Target:  $3.50-$5
Return:  -29%
Stop Target:  None

Action:  Support has moved up to $32.50.  Resistance is at $35.  Shares traded to a high of $34.89 last week.

Other 2014 Portfolio OPEN positions (5):  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) – continue to hold
Kirkland’s June 15 puts (from May 2014) – continue to hold
McDonald’s July 95 puts (from May 2014) – continue to hold
Bed, Bath & Beyond
June 60 puts (from May 2014)
August 55 puts (from May 2014
Apollo Group
June 25 puts (from April 2014)
August 23 puts (from April 2014)