8:00 a.m. (EST)

The bulls failed to hold their opening gains on Thursday after the market reached fresh all-time intraday highs. The bears showed up in the final hour of trading to ruin the party, but the pullback into the close was a result of nervousness over this morning’s Nonfarm Payroll numbers.

The Dow fell 8 points, or 0.5%, to settle at 17,069. The blue-chips reached an all-time intraday peak of 17,161.55 and remain on track to challenge 17,350-17,500. Support at 17,000 has held for 10 straight sessions following a test to 17,030 into the close. Backup support is at 16,800.

The S&P 500 gave back 3 points, or 0.15%, to close at 1,997. The index traded to an all-time intraday high of 2,011.17 before fading below the 2,000 level. I have talked about continued fluff up to 2,025-2,050 as long as 2,000-1,995 holds. Yesterday’s low checked in at 1,992. There is additional support is at 1,975.

The Nasdaq dropped 10 points, or 0.2% to end at 4,562. Tech traded up to 4,603 before slipping back below the 4,600 level. The bears pushed a low of 4,553 after 4,575 failed to hold. I talked about additional risk to 4,550-4,500 on a break below this level, and today’s close could be a good clue on how next week plays out.

The Russell 2000 declined 5 points, or 0.4%, to finish at 1,167. The small-caps made a run to 1,180 but once again failed to hold this level for the third straight session. There is additional risk to 1,160-1,150. I would like to see the bulls regain 1,170-1,175 today.

The S&P Volatility Index ($VIX, 12.64, up 0.28) traded down to 11.70 on the open, but the bears held 11.50 while pushing a high of 12.99 by the bell. The close above 12.50 was concerning and a possible warning sign, but the bulls held 13.50, and the high was a lower low than Tuesday’s trip to 13.41. A close above 13.50 today would be bearish heading into next week.

Ahead of the Nonfarm Payrolls report, futures look like this: Dow (-56); S&P 500 (-7); Nasdaq 100 (-6.5).

Special Note: Today could be a super busy session with possible Profit Alerts and/or New Trades ahead of the normal Mid-Market Update, so stay close to your email inboxes (and make sure you sign up to start receiving text alerts to your mobile device, which are scheduled to start on Sept. 8) throughout the morning.

 

Momentum Options Play List

Closed Trades for Momentum Options in 2014: 71-44 – 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, $26.17, down $0.30)

FTNT December 29 calls (FTNT141220C00029000, $1.00, flat)

Entry Price: $0.95 (9/2/2014)

Exit Target: $1.90

Return: 5%

Stop Target: None

 

FTNT September 28 calls (FTNT140920C00028000, $0.15, down $0.05)

Entry Price: $0.55 (6/30/2014)

Exit Target: $0.55 (Limit Order)

Return: -73%

Stop Target: None

Action: Shares tested a low of $26.12 yesterday with support holding at $26. My near-term target remains $28-$30.

 

AKS Steel Holding (AKS, $10.34, up $0.33)

AKS October 12 calls (AKS141018C00012000, $0.20, up $0.05)

Entry Price: $0.42 (8/26/2014)

Exit Target: $0.85-$1.70

Return: -52%

Stop Target: None

 

AKS January 13 calls 2015 (AKS150117C00013000, $0.35, up $0.05)

Entry Price: $0.52 (8/26/2014)

Exit Target: $1.05-$1.50

Return: -33%

Stop Target: None

Action: Shares traded to a high of $12.64 before giving back some of their gains. I wanted to see $10.50 hold, and a close above this level would be bullish.

 

Flextronics (FLEX, $11.31, down $0.25)

FLEX October 11 calls (FLEX141018C00011000, $0.45, down $0.25)

Entry Price: $0.33 (8/25/2014)

Exit Target: $1.00 (closed half at $0.80 on 9/3/14)

Return: 89%

Stop Target: Lower from $0.40 to $0.35 (Stop Limit on remaining half)

Action: I want to give the other half of the trade a little wiggle room, as a back test to $11 could come. The trade will still be profitable, but I lowered the Stop Limit to 35 cents, down from 40 cents. I would like to see a close above $11.50 into the weekend.

I am also looking at some longer-term options that will allow more time for this trade to play out.

Previous Notes:

Shares got a nice pop on 9/3 after shareholders approved the company to purchase up to 20% of its stock, or up to $500 million. Over the past four 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 bigger 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 $1.00 for a 200% return. The trade has nearly two 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, $6.17, up $0.04)

RBCN December 8 calls (RBCN141220C00008000, $0.40, flat)

Entry Price: $0.35 (8/25/2014)

Exit Target: $0.70

Return: 14%

Stop Target: None

Action: There is a gap to fill to $7, which is 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, $19.62, down $0.09)

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)

Return: 44%

Stop Target: 60 cents (Stop Limit on remaining half)

 

SNE October 19 calls (SNE141018C00019000, $0.90 down $0.10)

Entry Price: $0.45 (8/18/2014)

Exit Target: $0.90 (closed third at $1.05 on 9/3/14)

Return: 117%

Stop Target: 80 cents (Stop Limit on remaining 2/3rd)

Action: There is risk to $19.50-$19.25 on further weakness, and a dip below this level will likely close the remaining halves of the trades. I would like to see a close above $19.75 today, which would keep $20+ in play.

 

Keryx Biopharmaceuticals (KERX, $17.99, down $0.09)

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)

Return: 128%

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 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, $39.19, up $0.32)

YHOO October 43 calls (YHOO1018C00043000, $1.05, up $0.05)

Entry Price: $0.80 (8/11/2014)

Exit Target: $1.20-$1.60

Return: 31%

Stop Target: 85 cents (Stop Limit)

Action: Shares regained the $39 level after trading to a high of $39.34 yesterday. I’m still expecting a run past $40.

 

World Wrestling Federation (WWE, $14.61, up $0.15)

WWE September 15 calls (WWE140920C00015000, $0.30, up $0.05)

Entry Price: $0.50 (8/6/2014)

Exit Target: $1.00+

Return: -40%

Stop Target: None

Action: Shares traded to a high of $14.75 yesterday. 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 moving average is at $17.44. Support is at $14. This trade is coming down to the wire.

 

CVS Caremark (CVS, $80.31, down $0.05)

CVS September 82.50 calls (CVS140920C00082500, $0.15, flat)

Entry Price: $0.45 (7/28/2014)

Exit Target: $0.45 (Limit Order)

Return: -67%

Stop Target: None

Action: Shares traded to another 52-week high of $81.16 yesterday but ended in negative territory. 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 two months before they expire — continue to hold.