9:00am (EST)

The blue-chips traded higher for the fourth straight session and 7 of the past 8 while the S&P 500 has moved higher 11-out-of-13.  I mentioned the fund-managers would be chasing the gains on a breakout after the Memorial Day holiday.  This week could see a continued push higher as round number resistance is tested but too many cheerleaders may ruin a good thing.

The Dow added 19 points, or 0.1%, to close at 16,943.  The blue-chips traded to an all-time high of 16,970 and is within spitting distance of clearing 17,000.  There was a slight dip to 16,912 shortly after 2pm but there could be a push to 17,250-17,300 on an overshoot past 17,000.  Support is at 16,800 but is fresh with solid backup at 16,600.

The S&P 500 gained 2 points, or 0.1%, to settle at 1,951.  The index traded to another all-time intraday high of 1955 and double-nickels (0.55) and is on track to test 1,975-2,000.  The bears pushed a late day low of 1,947 but it was short-lived.  I mentioned I had the highest yearend price target for the S&P 500 at 2,100 out of a dozen Wall Street firms and many of them are now playing catchup as water-cooler talk of 2,000 continues.  These knuckleheads jumped off the Titanic too soon and now they want back on board.  This worries me for now but I’m enjoying the wave.  I will talk more about this over the weekend.  Support is at 1,940-1,925.

The Nasdaq advanced 15 points, or 0.3%, to end at 4,336.  Tech zoomed to a high of 4,346 and is within a 1% striking distance of clearing its 52-week high of 4,371.71.  Support has moved up to 4,300-4,250.

The Russell 2000 jumped 10 points, or 0.9%, to finish at 1,175.88.  The small-caps traded higher from start to finish and reached a peak of 1,179.84.  The close above 1,175 gets 1,200 in play again.  Support is at 1,160-1,150.

The S&P 500 Volatility ($VIX, 11.15, up 0.42) tested a high of 11.51 and I mentioned the bulls were safe up to 11.50, and possibly 12.50 on a stretch.  The BEST misconception of the VIX I heard by one of the slick talking pros yesterday was that the VIX was at “historic lows” and it was time to put some cash on the sidelines.  This is WRONG as historic lows for the VIX are in the SINGLE-DIGITS.  This is another 10+% drop in the index from current levels.  More this weekend.

I mentioned all the time trading ranges usually lead to big breakouts or breakdowns in a stock or an index.  After the tightest range for May in years, the bulls won the tug-of-war.  I mentioned a rally would last through mid-June and I called for an all aboard headline to new all-time highs.  I also played some soothing office tunes on the May Friday’s to keep everyone focused.

I still hope the mid-June prediction comes through and maybe more but I mentioned next week is June option expiration.  This makes me a little nervous but could be ignored as traders battle over strike prices.

The final leg of the Dow Theory I talked about in November and December could also be playing out.  For new subscribers, check out the past issues from those months for a quick update but I will talk more about this over weekend as well.

With my December (and March) fluff targets starting to trigger across the boards, I also want to take half or full profits when I can this week.  The other halves and open trades can roll into next week.

From there, the portfolio will be light again as I look ahead to July, August, and September to open the next batch of new trades.

Tuesday’s have been bullish for much of the year but there was a little dip last Tuesday.  Two-in-a-row would need to be watched.

From desk to press, futures look like this: Dow (-16); S&P 500 (-3); Nasdaq 100 (-4).


9:00am EST

Closed Trades for 2014: 50-29 – 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, $26.31, up $0.39)

September 28 calls (IMAX140920C00028000, $0.80, up $0.10)

Entry Price:  $0.60 (6/5/2014)
Exit Target:  $1.20
Return:  33%
Stop Target:  None

Action:  Shares kissed $26.34 and the 50-day MA is at $26.40.  A close above this level should get $28-$30 in play.  Support is at $25.50.

Limelight Networks (LLNW, $2.96, up $0.08)

September 3 calls (LLNW140920C00003000, $0.35, up $0.05)

Entry Price:  $0.15 (6/4/2014)
Exit Target:  $0.45
Return:  133%
Stop Target:  None

December 3 calls (LLNW141220C00003000, $0.45, up $0.05)

Entry Price:  $0.20 (6/4/2014)
Exit Target:  $0.60
Return:  125%
Stop Target:  None

Action:  Shares traded to a high of $3.19 shortly after the open but failed to hold $3 on Monday.  Volume in the September 3 calls exceeded 1,500 contracts.  Support is at $2.75-$2.50.

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, $23.18, up $0.15)

July 25 calls (FTNT140719C00025000, $0.40, up $0.05)

Entry Price:  $0.25 (6/4/2014)
Exit Target:  $0.50
Return:  60%
Stop Target:  None

July 24 calls (FTNT140719C00024000, $0.65, up $0.05)

Entry Price:  $0.45 (5/30/2014)
Exit Target:  $0.90
Return:  44%
Stop Target:  None

Action:  The 52-week high is $23.93 and shares reached $23.34 on Monday.  Support is at $22.

Twitter (TWTR, $34.47, up $1.14)

January 50 calls 2015 (TWTR150117C00050000, $1.35, up $0.10) LEAP option

Entry Price:  $1.75 (5/8/2014)
Exit Target:  $3.50-$5
Return:  -23%
Stop Target:  None

Action:  Support has moved up to $32.50.  Resistance is at $35.  Monday’s high reached $34.55.

Other 2014 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 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
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)