Dear Momentum Options Subscriber,
Today’s nonfarm payrolls report showed that 215,000 jobs were added in July and that the unemployment rate held steady at 5.3%. This matched Wall Street’s expectations and set in motion more talk of an interest-rate hike in September.
The market has pulled back on these concerns, or so the talking heads are saying, but the technical damage was already pointing towards a flush to lower levels. I have talked about the weakness that we have seen on past Fridays and Mondays over the past few months, and the same pattern could play out into next week.
The Dow is currently declining 128 points to 17,291, while the S&P 500 is lower by 13 points to 2,069. The Nasdaq is tumbling 42 points to 5,014, and the Russell 2000 is off 11 points to 1,204.
With the weekend upon us, we have a few trades in play, as I’m electing to take profits in our remaining half-positions in the SPDR S&P 500 ETF (SPY) and the PowerShares QQQ Trust (QQQ). Our United Parcel Service (UPS) trade was also closed today when the Stop Limit triggered.
I will be watching the action into the close for a possible New Trade as I start on my weekend homework. If you don’t hear from me, however, have a great weekend, and I will be back on Monday with a full report.
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 1:35 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.
Krispy Kreme Doughnuts (KKD, $17.58, down $0.06)
KKD November 16 puts (KKD151120P00016000, $0.75, up $0.05)
Entry Price: $0.60 (8/6/2015)
Exit Target: $1.20
Stop Target: None
Action: Near-term support is at $17.50. A close below this level will likely get $17-$16.75 in play. Resistance is at $18, followed by $18.50-$18.75.
SPDR S&P 500 ETF (SPY, $207.03, down $1.32)
SPY August 205 puts (SPY150821P00205000, $1.46, up $0.35)
Entry Price: $0.90 (8/3/2015)
Exit Target: $1.80 (Limit Order) (closed first half at $1.30 on 8/6/15)
Stop Target: $0.85 (Stop Limit)
Action: Take profits and sell to close the second half of the SPY August 205 puts at current levels.
PowerShares QQQ Trust (QQQ, $109.49, down $0.96)
QQQ August 110 puts (QQQ150821P00110000, $1.52, up $0.32)
Entry Price: $0.72 (7/30/2015)
Exit Target: $2.00 (Limit Order) (closed first half at $1.32 on 8/6/15)
Stop Target: $1.00 (Stop Limit)
Action: Take profits and sell to close the second half of the QQQ August 110 puts at current levels.
SPDR Gold Trust ETF (GLD, $104.90, up $0.51)
GLD September 98 puts (GLD150918P00098000, $0.49, down $0.10)
Entry Price: $0.82 (7/28/2015)
Exit Target: $1.65
Stop Target: None
Action: Resistance at $105 is holding. A move below $104-$103.50 should get $100 and below in play.
United Parcel Service (UPS, $101.85, down $0.58)
UPS October 110 calls (UPS151018C00110000, $0.28, down $0.08)
Entry Price: $0.70 (6/11/2015)
Exit Target: $0.70+
Stop Target: $0.30 (Stop Limit)
Action: The Stop Limit of $0.30 triggered on today’s pullback, and we are now out of the position.
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.
Editor and Chief Options Strategist