12:40 p.m. (EST)
The ECB (European Central Bank) was under pressure to do “something” with its initiatives to start a quantitative easing (QE) program of its own and they did by lowering the interest rates from 0.15% to 0.05%, or 10 basis points.
The technical jargon can be ignored because all that matters is that it was good for the market. Had no action been taken by the ECB, today might have played out differently.
Although there have been some bearish signals, the bulls cleared one of the biggest hurdles they were facing this week with the other being tomorrow’s Nonfarm Payrolls report.
The consensus is for 215,000 jobs being added to the economy but I wouldn’t be surprised to see a number north of 250,000.
There were a number of Profit Alerts yesterday (with another one today) and a ton of updates this morning for the current trades. I hope everyone is up to speed on switching over to the new website and if you have any issues, please call us.
I spent hours on the new site last night and quite frankly, I was blown away. The portfolios are in real-time and look slick. The Members Area is amazing and easy to navigate and the Special Reports I have written are included in there as well.
One of the BEST features starting next week is the text alerts. I know many of you are working professionals so I have done my best to model the newsletter to fit the needs for investors who can’t watch the stock market and their positions throughout the trading day. This is why I do the morning update and try to have the Mid-Market updates ready when people go to lunch.
However, I know the left coast is 3 hours behind the east and that some traders live overseas and around the world. As such, it makes it a little harder to trade. Hawaii is 6 hours behind eastern standard time.
The good news is I have made it easier for you to instantly know when the newsletter or updates come out.
In addition to the new site you can now sign up for text alerts. The alerts will be sent out whenever a new trade recommendation or other action is needed and will be sent to your smartphone or mobile device. (Make sure you tell your mobile carrier to allow texts from 31279 because some carriers may block our texts. Standard rates may apply.)
It will also take a few days to complete the registration, so sign up today and look for your first text alerts to begin Monday, September 8th.
I am expecting a super busy September and October and at times, I could have Trade Alerts or New Trades outside of my twice daily updates. By signing up for the text alerts, you will know the instant I am taking action. How cool is that, Jack!
I know I have rambled on but I wanted to share this great news and to encourage you to sign-up and to spend time in the Members Area. All of the Daily Track Records from 2008 to present are in there as well.
Heading into the second half of trading, the Dow is up 51 points to 17,129 while the S&P 500 is higher by 6 points to 2,007. The Nasdaq is advancing 19 points to 4,592 and the Russell 2000 is gaining 5 points to 1,177.
I am wrapping up some research on a New Trade and I’m running the numbers along with checking the option chains to find the best play. I could have action to take later this afternoon but for now, let’s go check on the current trades as I do have another Profit Alert for you.
Momentum Options Play List
Closed Trades for Momentum Options in 2014: 70-44 – the Weekly Wrap is 25-4 (86%) for 2014 (110-11, 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 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 I 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 9 a.m. and 12 p.m. – 1 p.m. 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.
Fortinet (FTNT, $26.40, down $0.07)
FTNT December 29 calls (FTNT141220C00029000, $1.00, flat)
Entry Price: $0.95 (9/2/2014)
Exit Target: $1.90
Stop Target: None
FTNT September 28 calls (FTNT140920C00028000, $0.20, flat)
Entry Price: $0.55 (6/30/2014)
Exit Target: $0.55 (Limit Order)
Stop Target: None
Action: Shares tested a low of $26.14 on Wednesday with support holding at $26 before rebounding to close in positive territory. My near-term target remains $28-$30.
AKS Steel Holding (AKS, $10.57, up $0.56)
AKS October 12 calls (AKS141018C00012000, $0.20, up $0.04)
Entry Price: $0.42 (8/26/2014)
Exit Target: $0.85-$1.70
Stop Target: None
AKS January 13 calls 2015 (AKS150117C00013000, $0.40, up $0.10)
Entry Price: $0.52 (8/26/2014)
Exit Target: $1.05-$1.50
Stop Target: None
Action: I would like to see $10.50 hold into the close.
Flextronics (FLEX, $11.32, down $0.20)
FLEX October 11 calls (FLEX141018C00011000, $0.60, down $0.10)
Entry Price: $0.33 (8/25/2014)
Exit Target: $1.00 (closed half at $0.80 on 9/3/14)
Stop Target: 40 cents (Stop Limit on remaining half)
Action: Support is at $11 but I’d like to see $11.25 hold today.
Shares got a nice pop after shareholders approved the company to purchase up to 20% of its stock, or up to $500 million. Over the past 4 years, Flextronics has spent $1.7 billion to buy back nearly 250 million of its shares.
Obviously, management and shareholders continue to see the hidden value I saw a few weeks ago. My near-term target has been $12 but I am raising it to $14.
More…Flextronics is an assembler of Apple’s (AAPL) Mac computers and could have a biiger hand in other products as Apple moves towards having more of its devices made here at home.
There is water-cooler talk Apple is working on a spiffy 12.9″ iPad that will likely be released next year. The current buzz is about the iPhone 6 but this bigger iPad screen will dwarf the current 9.7″ and 7.9″ models. They are in talks with suppliers about development of the future iPad and FLEX could be a candidate.
If shares trigger $12 by mid-October these options will be worth $1 for a 200% return. The trade has nearly 2 months to play out and by going with the October calls, I have given the action plenty of time for a massive payday.
Rubicon (RBCN, $6.30, up $0.17)
RBCN December 8 calls (RBCN141220C00008000, $0.40, flat)
Entry Price: $0.35 (8/25/2014)
Exit Target: $0.70
Stop Target: None
Action: There is a gap to fill to $7 and where the first level of resistance lies. A move above this level would be super bullish. Support is at $6 and a drop below this level would be bearish for the trade.
Sony (SNE, $19.67, down $0.04)
SNE September 19 calls (SNE140920C00019000, $0.70, down $0.10)
Entry Price: $0.45 (8/20/2014)
Exit Target: $0.90 (closed half at $0.60 on 9/2/14)
Stop Target: 60 cents (Stop Limit on remaining half)
SNE October 20 calls (SNE141018C00020000, $0.45, down $0.05)
Entry Price: $0.25 (8/20/2014)
Exit Target: $0.50-$0.75 (closed quarter at $0.50 on 9/3/14)
Return: 55% (trade closed)
Stop Target: 35 cents (Stop Limit on remaining 3/4 triggered)
SNE October 19 calls (SNE141018C00019000, $1.00, down $0.05)
Entry Price: $0.45 (8/18/2014)
Exit Target: $0.90 (closed third at $1.05 on 9/3/14)
Stop Target: 80 cents (Stop Limit on remaining 2/3rd)
Action: The Stop Limit of 35 cents on the October 20 calls triggered this morning as the market makers scalped us on the dip to $16.62. Unbelievable.
This happened to a profitable YHOO trade last week so I will have to be more careful with the Stop Limits. The other Stop Limits have held today and I would like to see shares hold $18.70 by the close.
Keryx Biopharmaceuticals (KERX, $18.03, down $0.05)
KERX September 18 calls (KERX140920C00018000, $1.90, flat)
Entry Price: $0.75 (8/20/2014)
Exit Target: $1.75-$2.00 (closed a quarter at $1.30 on 8/25/14, closed a quarter at $1.75 on 8/26/14, closed a quarter at $1.90 on 8/29/2014)
Stop Target: $1.25 (Stop Limit on remaining 1/4)
Action: The news concerning the company’s drug, Zerenex, and its fate is due out this upcoming weekend. I will be holding the last quarter of the trade open through next week. I have been closing quarter positions into strength and the trade will be profitable no matter what decision is made. Of course, I would love to see shares make a run past $20 and my original price target but any bad news could shave 10%-20% off the stock.
Yahoo (YHOO, $39.04, up $0.17)
YHOO October 43 calls (YHOO1018C00043000, $1.00, flat)
Entry Price: $0.80 (8/11/2014)
Exit Target: $1.20-$1.60
Stop Target: 85 cents (Stop Limit)
Action: Shares traded down to $38.69 but easily held support at $38. I’m still expecting a run past $40 but I have a Stop Limit in place to protect profits if there is continued weakness.
World Wrestling Federation (WWE, $14.71, up $0.25)
WWE September 15 calls (WWE140920C00015000, $0.35, up $0.10)
Entry Price: $0.50 (8/6/2014)
Exit Target: $1.00+
Stop Target: None
Action: I have been talking about another round of short-covering coming on a close above $15. There is a gap to fill up to $17 and the 200-day MA is at $17.44. Support is at $14. This trade is coming down to the wire.
CVS Caremark (CVS, $80.27, down $0.07)
CVS September 82.50 calls (CVS140920C00082500, $0.15, flat)
Entry Price: $0.45 (7/28/2014)
Exit Target: $0.45 (Limit Order)
Stop Target: None
Action: The break-even point is near $83, technically, as the entry price for the trade was 45 cents. Continued highs this week and next could get the trade back to even, quicker, and where I would like to exit.
Trades on Hold – 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.
S&P 500 Spiders September 180 puts (from August 2014) – continue to hold.
Pool October 50 puts (from July 2014) – The break-even point for the trade is at $48.90, technically, by mid-October. These options have nearly 2 months before they expire.