Dear Momentum Options Subscriber,

Wall Street was giddy on Walt Disney (DIS, $111.05, down $10.64) ahead of its earnings announcement Tuesday afternoon, as most analysts were banking on a solid quarter and continued momentum. The headline numbers read as if Disney topped expectations, but the devils in the details were the revenue miss and concern over cord-cutting.

Disney reported a profit of $1.45 a share on revenue of $13.1 billion. Analysts were looking for $1.42 a share on revenue of $13.2 billion. It was the 11th-straight time that the company beat on the top line, but the slight revenue shortfall was unforgiving.

The pullback in the stock has accounted for a loss of 68 Dow points and, after trading higher this morning, the overall index is now flat. Today’s gains in the other major indices are being attributed to a weaker-than-expected ADP report that showed that private payrolls rose by just 185,000 in July. Expectations were for 215,000 job additions. The miss is leading to speculation that the Fed will hold off on raising rates in September, which sparked the rally today.

While the opening rally has lost some of its luster, the major indexes are pushing short-term resistance. The Dow is currently down 8 points to 17,542, while the S&P 500 is gaining 7 points to 2,100. The Nasdaq is higher by 39 points to 5,145, and the Russell 2000 is adding 5 points to 1,234.

I’m still doing research on a possible New Trade, and I could have it ready later this afternoon. In the meantime, let’s go check on our current positions.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 76-25-2 (74%). 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 12:45 p.m. EST.

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

 

SPDR S&P 500 ETF (SPY, $210.17, up $0.79)

SPY August 205 puts (SPY150821P00205000, $0.51, down $0.39)

Entry Price: $0.90 (8/3/2015)

Exit Target: $1.35-$1.80 (Limit Orders on half)

Return: -43%

Stop Target: None

Action: I would like to see resistance at $210 hold into the close. Support is at $208.

 

PowerShares QQQ Trust (QQQ, $111.39, down $0.21)

QQQ August 110 puts (QQQ150821P00110000, $0.43, down $0.35)

Entry Price: $0.72 (7/30/2015)

Exit Target: $1.45

Return: -40%

Stop Target: None

Action: Support is at $110. Near-term resistance is at $112.

 

SPDR Gold Trust ETF (GLD, $104.03, down $0.28)

GLD September 98 puts (GLD150918P00098000, $0.69, up $0.06)

Entry Price: $0.82 (7/28/2015)

Exit Target: $1.65

Return: -16%

Stop Target: None

Action: Resistance is at $106. A move below $104-$103.50 should get $100 and below in play.

 

United Parcel Service (UPS, $102.64, down $0.11)

UPS October 110 calls (UPS151018C00110000, $0.48, up $0.08)

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

Exit Target: $0.70+

Return: -31%

Stop Target: $0.20 (Stop Limit)

Action: Resistance is at $103-$105. A move above the latter should get the trade back to even or better. Support is at $102-$101 and the 200-day moving average. A close below the latter will likely trip our Stop Limit.

 

Trades on Hold — other 2015 Portfolio Open positions (1): 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.

Rigel Pharmaceuticals (RIGL) September 5 calls (from 6/4/15) — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options