The bulls continued their winning ways with the market hitting fresh highs but Tech lagged and the bears are hoping to cause some excitement with June options expiring today.
The Dow added 14 points, or 0.1%, to finish at 16,921. The blue-chips traded down to 16,858 before rebounding to end 2 points off their session high. The bulls are looking to trigger 17,000 for splashy headlines over the weekend while the bears will be trying to get below 16,800.
The S&P 500 gained over 2 points, or 0.1%, to close at 1,959.48. The index kissed another all- time intraday high of 1,959.87 shortly after the open before testing support at 1,950. The bears got to 1,952 before being turned away and a close above 1,960 keeps 1,975-2,0000 in play. Believe it or not, the index hasn’t made a 1% daily move in 44 days.
The Nasdaq slipped 3 points, or 0.1%, to end at 4,359. Tech traded lower throughout the session after an opening run to 4,372.18 and fresh 52-week highs. The pullback to 4,339 easily held new support at 4,325 with backup at 4,300. A close above 4,375 keeps my fluff targets of 4,400-4,500 in the mix.
The Russell 2000 popped a point higher, or 0.1%, to settle at 1,184. The small-caps peaked at 1,186.78 on the open before testing 1,177 and holding support at 1,175. A close above 1,190 today would be bullish for next week and a possible run to 1,200 (again).
The S&P 500 Volatility Index ($VIX, 10.62, up 0.01) traded to another fresh 52-week low of 10.42 before finishing flat. There was a spike to 10.82 midday but the bulls easily held 11.50. I didn’t hear any of the suit-and-ties talking about this as they continue to ignore the chart work for the VIX.
It has been one incredible June for the portfolio and I have once again raised the Stop Limits on a few trades. I mentioned yesterday there were 6 current trades up over 100% and there are a few more that are close to joining the club. However, it is important to continue to protect profits as I plan out the next batch of trades and play with the house’s money.
Futures look like this ahead of the open: Dow (-9); S&P 500 (-1); Nasdaq 100 (-2).
Closed Trades for 2014: 51-30 – the Weekly Wrap is 15-4 (79%) for 2014 (100-11, or 90% 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 the 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.
CVS Caremark (CVS, $77.45, up $0.09)
August 80 calls (CVS140816C00080000, $0.80, flat)
Entry Price: $0.60 (6/18/2014)
Exit Target: $1.20
Stop Target: 60 cents
Action: CVS traded to $77.84 yesterday and a close above $78 would be bullish. Shares held the 50-day MA after a recent back test and should resume their march towards $80. Support is at $76-$75.
BlackBerry (BBRY, $9.09, up $0.80)
August 9 calls (BBRY140816C00009000, $0.70, up $0.25)
Entry Price: $0.45 (6/18/2014)
Exit Target: $0.90 (closed half @ 85 cents on 6/19/14)
Stop Target: 60 cents (Stop Limit)
Action: I closed half the trade to lock-in profits. Earnings trades are usually a one or two day trade for me but I wanted to keep half open on a possible run to $10. Shares traded to $9.52 but ended near session lows. I have a 60-cent Stop Limit on the other half of the trade that will likely trigger if shares fail to hold $9.
Rambus (RMBS, $14.65, down $0.01)
August 15 calls (RMBS140816C00015000, $0.80, flat)
Entry Price: $0.40 (6/13/2014)
Exit Target: $1.20 Limit Order (closed half @ 80 cents on 6/17/14)
Stop Target: 60 cents, raise to 70 cents (Stop Limit)
Action: Shares traded to $14.70 ahead of Thursday’s close. The options traded down to 76 cents on the dip to $14.49 so I have raised the Stop Limit to 70 cents on the other half of the trade. A close above $14.70 keeps $15 in play.
Hercules Offshore (HERO, $4.94, up $0.07)
October 5 calls (HERO141018C00005000, $0.50, flat)
Entry Price: $0.35 (6/11/2014)
Exit Target: $0.70
Stop Target: None
Action: A trip to $6 is in store if Hercules can hold $5. Support is at $4.80.
Imax (IMAX, $28.25, up $0.19)
September 28 calls (IMAX140920C00028000, $1.60, up $0.15)
Entry Price: $0.60 (6/5/2014)
Exit Target: $1.20 (closed half @ $1.30 on 6/16/14)
Stop Target: $1.20 (Stop Limit)
Action: Imax made a push to $28.40 yesterday. A run to $30 is in the works as long as $28 can hold.
Limelight Networks (LLNW, $2.99, up $0.01)
September 3 calls (LLNW140920C00003000, $0.40, flat)
Entry Price: $0.15 (6/4/2014)
Exit Target: $0.45
Stop Target: None
December 3 calls (LLNW141220C00003000, $0.50, flat)
Entry Price: $0.20 (6/4/2014)
Exit Target: $0.60
Stop Target: None
Action: I would like to see a close above $3.25 today but will settle for $3. Support is at $2.75.
Fortinet (FTNT, $24.64, up $0.23)
July 25 calls (FTNT140719C00025000, $0.70, up $0.05)
Entry Price: $0.25 (6/4/2014)
Exit Target: $0.50 (closed half @ $0.45 on 6/11/14)
Stop Target: 50 cents (Stop Limit)
July 24 calls (FTNT140719C00024000, $1.20, up $0.10)
Entry Price: $0.45 (5/30/2014)
Exit Target: $0.90 (closed half @ $0.80 on 6/11/14)
Stop Target: 90 cents (Stop Limit)
Action: A run past $25 could be coming as long as $24 holds.
Twitter (TWTR, $38.90, up $0.16)
January 50 calls 2015 (TWTR150117C00050000, $2.50, up $0.20) LEAP option
Entry Price: $1.75 (5/8/2014)
Exit Target: $3.50 (closed half @ $2.10 on 6/12/14)
Stop Target: $1.80, raise to $2.10 (Stop Limit)
Action: A run to $40 is still in the works. Support is at $35 and is moving up. I have raised the Stop Limit on the other half to $2.10.
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) – these options expire today. Although the puts were used as “protection”, it still doesn’t feel good to have a losing trade.
McDonald’s July 95 puts (from May 2014) – continue to hold
June 25 puts (from April 2014) – these options expire today and while the trade didn’t work out, I’m hoping the August puts do with the company announcing earnings next week.
August 23 puts – continue to hold
Bed, Bath & Beyond
June 60 puts (from May 2014) current bid 8 cents, if shares fall below $60 these options are in-the-money. If the stock opens lower I will update the trade in the midday. If shares open higher, close the trade.
August 55 puts – continue to hold