Dear Momentum Options Subscriber,

It was nice to wake up and see futures solidly in the green following Friday’s action and the headlines over the weekend.

Greece is making one last pitch to its creditors, comprised of tax increases on its citizens (imagine that) and spending cuts, to avoid a pending default. The country is hoping that its new round of proposals will appease the budget targets required by its lenders.

I can’t count how many times over the months (and years) I have heard that this would be the country’s “last chance” to avoid a debt default, but today’s gains are hinting that it will beat the current deadline.

The bailout of a bailout of a bailout can’t be blamed on Wall Street or the European markets, as it is the governments involved in the crisis that are at fault. They can’t blame you or I or the citizens of the countries involved, which just shows that nothing is really getting accomplished.

Aside from the headlines that remain in June, it is important to remember that second-quarter earnings season starts in July. I often mention that companies report earnings nearly every single day that Wall Street is open. Until then, there will be some notable earnings reports, starting with Lifeway Foods (LWAY) and Sonic (SONC) after today’s close.

Blackberry (BBRY), Carnival (CCL) and Darden Restaurants (DRI) will headline Tuesday’s session, while Bed, Bath & Beyond (BBBY), Lennar (LEN) and Monsanto (MON) will confess their quarterly results on Wednesday.

Barnes & Noble (BKS), Micron Technology (MU), Nike (NKE) and Winnebago Industries (WGO) are expected to report on Thursday, while Finish Line (FINL) wraps up the week with its numbers on Friday.

As far as the market, the Dow is currently up 105 points to 18,121, while the S&P 500 is higher by 13 points to 2,123. The Nasdaq is jumping 30 points to 5,147, and the Russell 2000 is climbing 4 points to 1,289.

I’ve updated our current trades below, so let’s go check the action.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 65-20-1 (76%). 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 1:00 p.m. EST.

I hereby disclose that I will be participating in the following trade(s). 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 portfolio.

 

S&P 500 SPDR ETF (SPY, $211.88, up $1.07)

SPY July 200 weekly puts (SPY150710P00200000, $0.26, down $0.21)

Entry Price: $0.45 (6/19/2015)

Exit Target: $0.90-$1.20 (Limit Order at $0.90 on first half)

Return: -42%

Stop Target: None

Action: I mentioned that this trade was market insurance, and these options won’t expire until the second week of July. Although the options are taking a hit today, I felt safe holding them over the weekend, as it was the first time this year that I thought we may need put protection.

I normally don’t buy into put protection. However, with seven bullish trades open, I wanted the insurance, and I didn’t like the way the VIX was acting on Friday.

Resistance at $213. A close below $210 and the 50-day moving average would be bearish. Additional help is at $208 and the 100-day moving average.

You can read my full update on SPY and view the chart work in this morning’s Pre-Market Update.

 

Rambus (RMBS, $14.98, flat)

RMBS August 16 calls (RMBS150821C00016000, $0.50, flat)

Entry Price: $0.55 (6/19/2015)

Exit Target: $1.40

Return: -9%

Stop Target: None

Action: Support is at $14.50 and the 50-day moving average on a drop below $14.75. Resistance is at $15.25-$15.50, and a close above the latter would be bullish.

You can read my full update on RMBS and view the chart work in this morning’s Pre-Market Update.

 

Microsoft (MSFT, $46.35, up $0.25)

MSFT July 47 calls (MSFT150717C00047000, $0.54, up $0.04)

Entry Price: $0.73 (6/18/2015)

Exit Target: $1.50

Return: -26%

Stop Target: None

Action: Resistance is at $47-$48. Support is at $45.50-$45 and the 50-day moving average.

 

United Parcel Service (UPS, $101.59, up $0.75)

UPS July 105 calls (UPS150717C00105000, $0.30, flat)

Entry Price: $0.53 (6/11/2015)

Exit Target: $1.05

Return: -43%

Stop Target: None

 

UPS October 110 calls (UPS151016C00110000, $0.50, flat)

Entry Price: $0.70 (6/11/2015)

Exit Target: $1.40

Return: -29%

Stop Target: None

Action: Resistance is at $102. Support is at $101 and the 200-day moving average, followed by $99 and the 100- and 50-day moving averages.

You can read my extended write-up on UPS in the June 12 Pre-Market Update.

 

Wells Fargo (WFC, $57.05, down $0.65)

WFC July 60 calls (WFC150717C00060000, $0.15, up $0.03)

Entry Price: $0.20 (6/5/2015)

Exit Target: $0.50

Return: -25%

Stop Target: None

Action: Resistance is at $58. Support is at $56.50-$56 on a close below $57.

 

Trades on Hold — other 2015 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 Open Trades and Closed Trades pages to see all open and closed positions.

Sony (SNE) July 33 calls (from 6/1/2015) — Continue to hold.

Rigel Pharmaceuticals (RIGL) September 5 calls (from 6/4/2015) — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options