It has been a busy 2 weeks for the portfolio as I recommended over a dozen trades during the run to new highs from late May into mid-June.
There was follow-through by the bulls into this week as the major indexes all but nailed down my December fluff targets on Monday and Tuesday and the late-day pullback came on a dime.
There were specific signs I have said to watch for on the stair-stepping to all-time and decade highs. The downside targets I have listed could be elevator drops if the selling pressure picks back up.
I have talked about the VIX touching single-digits and while the bulls came close, I said it was unclear if this would happen sooner rather than later. Those signals became clearer on Tuesday but today’s 3% dip back below 12 is bullish.
Heading into the final hours of trading, the Dow is up 23 points to 16,841 while the S&P is higher by 4 points to 1,954. The Nasdaq is advancing 15 points to 4,365 and the Russell 2000 is pushing 1,175 with its 2-point pop.
While the dust settles, there is another Profit Alert I have for today on a trade that returned 131%.
Closed Trades for 2014: 60-33 – the Weekly Wrap is 16-4 (80%) for 2014 (101-11, 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. I will send out a “Profit Alert” or “New Trade” if I 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, I will usually give you a heads-up if I think I’m going to send an email outside of these time frames.
General Motors (GM, $36.88, up $0.30)
September 32 puts (GM140920P00032000, $0.35, down $0.05)
Entry Price: $0.40 (6/23/2014)
Exit Target: $0.80- $1.20
Stop Target: None
Action: I believe shares will make a dramatic back test to $30 if $36-$35 fails to hold. There is risk to $37.50 but I am looking for $36.75-$37 to hold. This trade has 3 months to play out and why I went with the longer-term put options.
BlackBerry (BBRY, $9.82, down $0.02)
August 9 calls (BBRY140816C00009000, $1.15, down $0.25)
Entry Price: $0.45 (6/18/2014)
Exit Target: $0.90 (closed half @ 85 cents on 6/19/14, closed quarter @ $1.40 on 6/23/14)
Stop Target: $1.05 (Stop Limit)
Action: Shares have traded to a low of $9.66 today. The $1.05 Stop Limit on the remaining quarter of the trade triggered on test to $9.50 following a dip to $1.02.
Limelight Networks (LLNW, $2.95, up $0.04)
September 3 calls (LLNW140920C00003000, $0.35, flat)
Entry Price: $0.15 (6/4/2014)
Exit Target: $0.45
Stop Target: None
December 3 calls (LLNW141220C00003000, $0.45, flat)
Entry Price: $0.20 (6/4/2014)
Exit Target: $0.60
Stop Target: None
Action: A close above $3.25 should get shares rolling again. Support is at $2.75.
Shares traded to a high of $3.25 on 6/20 after Tuition Build offered roughly $645 million, or $6.55 a share, for Limelight. The company dismissed the Silicon Valley’s private-equity firm’s offer after basically saying they weren’t experienced enough to run the business.
I have been suggesting a buyout offer would come for Limelight Networks with the company’s cheap market cap and said they would make a very luscious takeover target.
Its litigation issues have decreased dramatically following their recent win against AKAM and they are open to a much bigger marriage.
Other 2014 Portfolio OPEN positions (2): 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 I would not open any new positions. I’m still keeping track of the trades and will record the results accordingly, when the trade closes or if the options expire. Click on the 2014 Portfolio link in the Members Area to view ALL open/ closed trades.
McDonald’s July 95 puts (from May 2014) – continue to hold
August 23 puts (from April 2014) earnings are due out Wednesday – continue to hold