1:15pm (EST)

The blue-chips needed to gain 100+ points today to break-even for  the week.  A good earnings report from Nike (NKE, $78.13, up $1.27) after Thursday’s close looked promising but futures were weak throughout the night.

Nike reported a profit of $0.78 a share on sales of $7.4 billion after Thursday’s close and beat estimates by 3 cents.  Shares have traded to a high of $79.15 and came within shouting distance of its 52-week high just north of $80.

I mentioned I’m usually pretty bullish on Nike when they report as they have waxed Wall Street’s estimates in seven of the past eight quarters.  However, the options premiums were expensive and the momentum wasn’t there to take a chance on the call options.

I have talked about a possible trading range forming this week and into next with lower lows but also mentioned the bears like to take the elevator down.

New highs are still possible next week and into July but the bears are dropping clues and pushing support which is causing Wall Street a little worry.

Monday is the last trading day for June and the second quarter.  While Tech and the small-caps are showing strong gains for the month, the Dow is in danger of giving back its gains if the index can’t hold 16,717.

I have also mentioned there are a ton of trades I’m looking at, both long and short, that I’m planning to use going into July, August and September.  With the portfolio light, there is no need to rush into new trades as the premiums will likely suffer if the trading range continues.

I have a good feeling higher highs are in store for July but I’m also prepared to go short if a top is in.  It just depends on the clues I get over the next week or so.

In the meantime, June has been an incredible month as the Daily portfolio is now showing a gain of nearly 150% on a $10,000 trading account.  The overall success rate is nearly 70% for all of my trades.  Knock on wood.

Heading into the second half of trading, the Dow is declining 37 points to 16,808 while the S&P 500 is off by 2 points to 1,955.  The Nasdaq is higher by 8 points to 4,387 and the Russell 2000 is gaining 4 points to 1,184.

Closed Trades for 2014: 63-33 – the Weekly Wrap is 18-4 (82%) for 2014 (103-11, 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, $36.96, up $0.06)

September 32 puts (GM140920P00032000, $0.35, flat)

Entry Price:  $0.40 (6/23/2014)
Exit Target:  $0.80- $1.20
Return:  -13%
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.

Limelight Networks (LLNW, $3.05, up $0.02)

September 3 calls (LLNW140920C00003000, $0.35, flat)

Entry Price:  $0.15 (6/4/2014)
Exit Target:  $0.45
Return:  125%
Stop Target:  None

December 3 calls (LLNW141220C00003000, $0.45, flat)

Entry Price:  $0.20 (6/4/2014)
Exit Target:  $0.60
Return:  133%
Stop Target:  None

Action:  A close above $3.25 should get shares rolling again.  Support is at $2.75.

Previous comments:

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
Apollo Group August 23 puts (from April 2014) – continue to hold

 

I will be back Sunday night with the Weekly Wrap and on Monday morning with the Daily.  Until then, have a great weekend everyone!