9:00am (EST)

The bears made an opening stand on Tuesday’s open and held negative territory throughout the day but the damage was minimal.  The bulls easily held fresh support as the market stayed in a tight trading range into the closing bell before a final push got them a split.

The Dow gained 3 points , or 0.02%, to close at 16,945.  The blue-chips traded down to 16,897 while holding support at 16,900-16,800.  The bulls are still eyeing a run past 17,000 as they pushed 16,946 into the closing bell.

The S&P 500 slipped a half-point, or 0.02%, to settle at 1,950.79.  The index tested a low of 1,944 and held the 1,950 level.  There is risk to 1,940 on a continued back test but the bulls are eyeing resistance and continued fluff at 1,975-2,000.

The Nasdaq gained 2 points, or 0.04%, to end at 4,338.  Tech managed to trade into positive territory and up to 4,338 within the first few minutes before falling to 4,319 within the first half hour.  The volatility eased as the bulls made another run at greener pastures and matched the early morning high.

The Russell 2000 dropped 3 points, or 0.3%, to close at 1,172.  The small-caps struggled from start to finish after bottoming at 1,166.  There was a slight recovery off the lows with support at 1,160-1,150 easily holding.  The close back below 1,175 was disappointing but the bulls should recover and could still push 1,200 if they rebound today.

The S&P 500 Volatility Index ($VIX, 10.99, down 0.16) was flat as a pancake as it traded in a tight range of before falling 1.4%.  I’ve mentioned the 11.50 and 12.50 levels as possible clues the bears are waking up.  Although the first layer was tested by the bears, the bulls are still shooting for single-digits.

I have finished up research on a New Trade but it is rare I buy options at the open.  I like to watch the action first, as the rookies trades and market scalpers do battle and then let the dust settle.  If the technical picture remains the same for the trade into the midday update, I will likely issue the new trade as an official recommendation.


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, $26.53, up $0.22)

September 28 calls (IMAX140920C00028000, $0.90, up $0.10)

Entry Price:  $0.60 (6/5/2014)
Exit Target:  $1.20
Return:  50%
Stop Target:  None

Action:  Shares traded to a high of $26.49 and cleared the 50-day MA at $26.40.  The close above this level should get $28-$30 in play.  Support is at $25.50.

Limelight Networks (LLNW, $3.02, up $0.06)

September 3 calls (LLNW140920C00003000, $0.35, flat)

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

December 3 calls (LLNW141220C00003000, $0.50, up $0.05)

Entry Price:  $0.20 (6/4/2014)
Exit Target:  $0.60
Return:  150%
Stop Target:  None

Action:  Shares made a late day run to $3.09 ahead of the close and held $3.  Nice.  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.  Support is at $2.75.

Fortinet (FTNT, $23.29, up $0.11)

July 25 calls (FTNT140719C00025000, $0.40, flat)

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

July 24 calls (FTNT140719C00024000, $0.65, flat)

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

Action:  The 52-week high is $23.93.  Support is at $22.

Twitter (TWTR, $35.37, up $0.90)

January 50 calls 2015 (TWTR150117C00050000, $1.50, up $0.15) LEAP option

Entry Price:  $1.75 (5/8/2014)
Exit Target:  $3.50
Return:  -14%
Stop Target:  None

Action:  Twitter shares reached a peak of $35.50 and held resistance at $35.  The next hurdle is at $37-$38.  Fresh support is at $35 with $32.50 serving backup.

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)