Futures were showing a very strong open throughout the night and into this morning’s open despite the nervousness from around the globe.

The 307-year marriage between Scotland and England continued and, while Alibaba’s (BABA, $92.34, up $24.34) debut on the New York Stock Exchange (NYSE) appears to be a success, I warned of an opening pop and drop.

The extra homework from last weekend was worth the effort, as the indexes did test support before the strong rebound that started immediately afterwards. I was somewhat surprised by the “quickness” of the rebound, but I quickly recognized the clues the bulls were sending that they weren’t done pushing higher highs.

I also warned that the Nasdaq needed to clear and hold 4,600 today and the small-caps needed to punch through 1,160. That happened, but the slippage from here could favor the bears into the close and next week.

I have been recommending call options throughout the week and September, and I have used a mixture of near- and longer-term options to play the run to higher highs. The charts from last week and early February showed a clear picture on where the market has come from and where it’s headed. If you are a new subscriber, please check out Monday’s Pre-Market Update to get a quick snapshot. Also, make sure you sign up for the text alerts that let you know the instant any portfolio changes hit the press.

Despite the mixed week (2-3) for Daily trades on a Sony (SNE, $17.69, down $0.35) curveball, the track record since early May has been short of stunning. I have been fortunate to go 41-14 over the past 4 months with 10 triple-digit winners, 5 trades that returned between 75%-90% and 9 trades that returned over 50%.

I say this not to be arrogant or brag but to show that it really does take hard work to stay ahead of the bulls and bears. I’m not worried about Wall Street does, just my trades and track record and if I am making money for the year. There are still times when the market will humble and humiliate me, and I will have choppy and losing trade streaks but I try to keep them limited.

As I wind down the last remaining trades from the summer, I have started opening new trades to play into November, December and January. It is still a stock picker’s market, as there are still shorting opportunities to go along with bullish positions. The longer-dated options will give us time to get through some short-term choppiness that might lie ahead.

The Dow is up 28 points to 17,294, while the S&P 500 is flat at 2,011. The Nasdaq is down 23 points to 4,570, while the Russell 2000 is lower by 11 points to 1,148 and back below 1,150.

I have current trades to catch you up on ahead of the weekend, and I will be watching the close in case there is additional action to take, or perhaps a new trade.

If you do not hear from me, I will be back Monday morning with a full update and the near-term outlook. Until then, have a great weekend everyone!

Momentum Options Play List

Closed Momentum Options Trades for 2014: 71-43 (62%). 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 12:40 p.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.


Aruba Networks (ARUN, $22.95, down $0.02)

ARUN October 23 calls (ARUN141018C00023000, $0.85, flat)

Entry Price: $0.75 (9/18/2014)

Exit Target: $1.50

Return: 13%

Stop Target: None

Action: I’m looking for shares to make a run at $24 over the near-term, possibly $26 on a breakout. Shares have traded to a high of $23.61 today, and the 52-week peak is at $23.90. Support is at $22-$21.50.


Staples (SPLS, $13.05, up $0.01)

SPLS December 14 calls (SPLS141220C00014000, $0.45, flat)

Entry Price: $0.45 (9/18/2014)

Exit Target: $0.70-$0.90

Return: 0%

Stop Target: None

Action: I have a near-term target of $14. The 52-week high is at $16.67. The open interest in these call options is well north of 16,000 contracts. The 50-day moving average (MA) recently crossed over the 100-day MA and shares are in a nice uptrend. Support is at $12.60-$12.40 and the 200-day MA.


Freeport-McMoRan (FCX, $34.15, down $0.16)

FCX October 35 calls (FCX141018C00035000, $0.35, down $0.10)

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

Exit Target: $1.10-$1.50

Return: -53%

Stop Target: None


FCX November 36 calls (FCX141122C00036000, $0.45, down $0.05)

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

Exit Target: $1.05-$1.40

Return: -36%

Stop Target: None

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


World Wrestling Federation (WWE, $14.60, down $0.38)

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

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

Exit Target: $0.90 (Limit Order on half)

Return: -33%

Stop Target: None

Action: There is a chance for a breakout to $17 if the shorts start to cover again. Support is at $14.75-$14.50.


Flextronics (FLEX, $10.85, down $0.12)

FLEX October 12 calls (FLEX141018C00012000, $0.05, flat)

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

Exit Target: $0.15-$0.25

Return: -29%

Stop Target: None


FLEX January 11 calls (FLEX150117C00011000, $0.65, flat)

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

Exit Target: $1.50+

Return: -3%

Stop Target: None

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

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, $26.35, down $0.42)

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

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

Exit Target: $1.90

Return: 0%

Stop Target: None

Action: Support is at $26.


Rubicon (RBCN, $5.01, down $0.11)

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: Support is at $5.25-$5. Resistance is at $6.

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) — These puts expire today.

AKS Steel Holding October 12 calls (from August 2014) and January 13 calls (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 a month before they expire — Continue to hold.