The knee-jerk reaction to the Fed minutes on Wednesday was expected, but the bulls had to wait for Janet Yellen’s comments before they were allowed to roam.

The Dow gained 24 points, or 0.15%, to end at 17,156 on Wednesday. The blue-chips showed strength into the Fed minutes but tested a low of 17,089 before Janet came to the rescue. The index traded to an all-time intraday high of 17,221 and bested the previous closing high of 17,138. The next layers of fluff are at 17,350-17,500, with support holding at 16,900-16,800.

The S&P 500 advanced 2 points, or 0.1%, to finish at 2,001. The index opened higher and was holding the 2,000 level into the afternoon before a brief dip to 1,993. The bulls easily recovered and came within half of a point of triggering a fresh all-time high after pushing 2,010.74. The bulls are looking to trigger 2,025-2,050, while the bears are trying to get to 1,975.

The Nasdaq added 9 points, or 0.2%, to settle at 4,562. Tech held positive territory throughout the first half of trading before slipping to 4,539 late in the session. The rebound to 4,582 was nice, but it’s hard to get excited until 4,600 clears and holds. Support is at 4,525-4,500.

The Russell popped 3 points, or 0.25%, to close just under 1,154. The small-caps showed the most strength throughout the session and pushed 1,158 ahead of the Fed news. The dip to 1,149.93 was textbook, as fresh support at 1,150 held. The rebound to 1,159.85 was also classic, as resistance at 1,160 held into the close. There is 2% upside from here to 1,170-1,175, but the bulls need to clear and hold 1,180 to get the flood gates opened.

The S&P 500 Volatility Index ($VIX, 12.65, down 0.08) finished flat following a bear run to 14.53 ahead of the Fed minutes. The bulls roared back after a “considerable time” on the sidelines and pushed a low of 11.73. They missed getting the close below 12.50 and came close to triggering 11.50. Finishes below these levels would suggest higher highs are in store.

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Ahead of the open, futures look like this: Dow (+56); S&P 500 (+8); Nasdaq 100 (+16).

Momentum Options Play List

Closed Momentum Options Trades for 2014: 70-41 (63%). 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.

 All prices given in this update are current as of 9:00 a.m. EST.

Every new Momentum Options recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.

 

Freeport-McMoRan (FCX, $34.51, down $0.38)

FCX October 35 calls (FCX141018C00035000, $0.55, down $0.20)

Entry Price: $0.75 (9/16/2014)

Exit Target: $1.10-$1.50

Return: -27%

Stop Target: None

 

FCX November 36 calls (FCX141122C00036000, $0.55, down $0.15)

Entry Price: $0.70 (9/16/2014)

Exit Target: $1.05-$1.40

Return: -21%

Stop Target: None

Action: The next level of resistance is at $35.50. Support is at $34.50 and the 200-day moving average.

 

Sony (SNE, $18.88, down $1.37)

SNE October 20 calls (SNE141018C00020000, $0.20, down $0.50)

Entry Price: $0.40 (9/15/2014)

Exit Target: $0.80-$1.20

Return: -50%

Stop Target: 10 cents (Stop Limit)

 

SNE January 20 calls (SNE150117C00020000, $0.70, down $0.65)

Entry Price: $1.05 (9/15/2014)

Exit Target: $2.10

Return: -33%

Stop Target: 50 cents (Stop Limit)

Action: Sony had so much momentum going, and yesterday’s announcement of a $2 billion write-off on smartphones was inexcusable. With a decent studio business, a hot-selling gaming console and a growing ecosystem, Sony blew it with the mismanagement of their mobile business.

I was playing shares on momentum and fundamentals, and both of them have changed dramatically. It was a frustrating trade, as I did predict the pop past $20, and the October calls nearly doubled, which is where we would have cashed profits on half of the position. In any event, I have set new Stop Limits of 10 cents on the SNE October 20 calls and 50 cents on the SNE January 20 calls.

 

World Wrestling Federation (WWE, $14.62, down $0.18)

WWE October 16 calls (WWE141018C00016000, $0.30, down $0.05)

Entry Price: $0.45 (9/11/2014)

Exit Target: $0.90

Return: -33%

Stop Target: None

Action: Shares were pushing $15 again in after-hours trading last night. Support is at $14.75-$14.50, and a close below the latter might force me out of the trade. I would like to see shares regain $15 this week.

 

MGM Resorts International (MGM, $22.84, up $0.02)

MGM November 22 puts (MGM141122P00022000, $0.70, down $0.05)

Entry Price: $0.40 (9/10/2014)

Exit Target: $0.60-$0.80 (closed half at $0.60 on 9/15/2014)

Return: 63%

Stop Target: 60 cents, raise to 65 cents (Stop Limit)

Action: Shares traded up to $23.12, while the options reached a low of 68 cents. I have raised the stop by a nickel, from 60 cents to 65 cents.

 

Flextronics (FLEX, $10.84, down $0.05)

FLEX October 12 calls (FLEX141018C00012000, $0.04, flat)

Entry Price: $0.07 (9/5/2014)

Exit Target: $0.15-$0.25

Return: -43%

Stop Target: None

 

FLEX January 11 calls (FLEX150117C00011000, $0.60, down. $0.05)

Entry Price: $0.68 (9/5/2014)

Exit Target: $1.50+

Return: -10%

Stop Target: None

Action: The company’s management team is meeting with analysts this Friday, so an upgrade could be coming.

Support is at $10.75. Near-term resistance is at $11.25. If cleared, shares could make another run at $11.75 and fresh 52-week peaks again.

I believe shares are going to make a strong move past $12 in the coming weeks and $14 by year-end.

 

Fortinet (FTNT, $26.28, up $0.18)

FTNT December 29 calls (FTNT141220C00029000, $0.95, up $0.10)

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

Exit Target: $1.90

Return: 0%

Stop Target: None

Action: The 52-week high is $26.80. Yesterday’s peak was $26.76. If cleared, a run to $28-$30 could come. Support is at $26-$25.50.

 

Rubicon (RBCN, $5.32, up $0.12)

RBCN December 8 calls (RBCN141220C00008000, $0.20, flat)

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

Exit Target: $0.70

Return: -43%

Stop Target: None

Action: Shares traded up to $5.69 on Wednesday before fading. I still like the trade, as open interest is massive in these call options. The short-interest is also ballooning, with 30% of the float sold short. Analysts are expecting a terrible quarter, but the company has beaten estimates two of the past four quarters.

This is a sapphire play that has until December before the trade expires. These were “cheap” options, so stay patient, as a big payday could be coming.

 

Trades on Hold — other 2014 Portfolio Open positions (3): 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 Open Trades and Closed Trades pages to see all open and closed positions.

S&P 500 Spiders September 180 puts (from August 2014) — Continue to hold.

AKS Steel Holding October 12 calls (from August 2014) and the January 13 calls (from August 2014) — Continue to hold. Shares traded up to $10.31 on Wednesday.

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 a month before they expire.