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 we list one. We will send out a “Profit Alert” or “New Trade” if we want you to close a position OR if a new trade comes out. Otherwise, follow instructions at all times in the 9am and 1pm updates. Also, we will usually give you a heads-up if we think we are going to send an email outside of these time frames. Closed Trades for 2013: 20-7, for a 74% win rate, including the Weekly Wrap that is 6-1).
12:45pm (EST)
Potash (POT, $38.75, up $0.15)
March 38 puts (POT130316P00038000, $0.50, down $0.08)
Entry Price: $0.50 (2/26/13)
Exit Target: $1.00
Return: 0%
Stop Target: None
Action: We have a near-term price target of $36 for Potash. If reached, these put options would be worth at least $2. These options expire in 17 days so we would like to see a close below $38 this week.
Cyberonics (CYBX, $46.30, up $0.10)
April 40 puts (CYBX130420P00040000, $0.85, up $0.20)
Entry Price: $0.75 (2/26/13)
Exit Target: $1.50
Return: 13%
Stop Target: None
Action: Our auto-trading buddies did a good job on the fill as we were able to get in these puts for 75 cents. We have a near-term target of $40 for the stock with a shot at the mid-$30’s coming into play.
Allstate (ALL, $45.41, up $0.30)
April 43 puts (ALL130420P00043000, $0.60, up $0.10)
Entry Price: $0.60 (2/26/13)
Exit Target: $1.20
Return: 0%
Stop Target: None
Action: We have a near-term target of $42 for shares which should get us a double on the put options.
Powershares QQQ (QQQ, $66.10, down $0.21)
April 65 puts (QQQ130420P00065000, $1.35, up $0.05)
Entry Price: $1.00 (2/21/13)
Exit Target: $1.50-$2.00
Return: 30%
Stop Target: 75 cents, raise to $1.10 (Hard Stop)
Action: Set limit orders to close HALF of the trade at $1.50. The puts have traded to a low of $1.12 today so we are going to move our Stop target up to $1.10 and make it a Hard Stop.
Spider S&P 500 (SPY, $149.12, up $0.12)
April 142 puts (SPY130420P00142000, $1.70, flat)
Entry Price: $1.15 (2/21/13)
Exit Target: $1.80-$2.30
Return: 48%
Stop Target: $1, raise to $1.35 (Hard Stop)
Action: Set limit orders to exit HALF of the trade at $1.80 or better today. We have raised the Stop Target from $1 to $1.35 and made it a Hard Stop.
Cree (CREE, $43.58, up $0.11)
March 42 puts (CREE130316P00042000, $0.85, down $0.05)
Entry Price: $0.85 (2/21/13)
Exit Target: $1.70
Return: 0%
Stop Target: None
Action: We are looking for a back test to $38 and the 50-day MA. A break below $38 would get $34 in play as there is a huge gap to fill following the breakout in January. We would like to see a close below $42.50 today.
Baidu (BIDU, $89.07, up $1.06)
April 80 puts (BIDU130420P00080000, $1.60, down $0.20)
Entry Price: $1.20 (2/20/13)
Exit Target: $2.40 (closed half @ $1.80 on 2/22/13)
Return: 42%
Stop Target: $1.20
Action: Close the other half of the trade at current levels.
Keryx Biopharmaceuticals (KERX, $6.46, down $0.16)
June 10 calls (KERX130622C00010000, $0.40, flat)
Entry Price: $0.70 (2/12/13)
Exit Target: $1.50
Return: -43%
Stop Target: None
Action: Support is trying to hold at $6.50 but is being tested today. We are expecting a move up to $8 over the near-term but there is risk down to $4.50. Earnings are due out on Wednesday and will be the next catalyst that takes shares higher or lower.
Taiwan Semiconductor (TSM, $17.73, down $0.52)
April 20 calls (TSM130420C00020000, $0.15, down $0.05)
Entry Price: $0.25 (1/3/13)
Exit Target: $0.75
Return: -40%
Stop Target: None
Action: We are looking for $17.50 to hold.
Other 2013 Portfolio OPEN positions (4): 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 we would not open any new positions. We are still keeping track of the trades and we will record the results, accordingly, when we close them or if the options expire. Click on the 2013Portfolio link in the Members Area to view ALL open/ closed trades.
Vivus March 17 calls (from January 2013) – Continue to hold
Apache March 90 calls (from February 2013)– Continue to hold
ADT March 50 calls (from January 2013)– Continue to hold
MGM Resorts International June 15 calls (from January 2012)
WATCH LIST SECTION
These trades are NOT recommendations. They are trades that we like but have not added to the portfolio as an official recommendation because of market conditions or because we are waiting for better entry prices. We try not to have more than 12-15 open trades at any one time which is why we created a Watch List. We will not list entry prices because these stocks are on the verge of breaking out or they could sell off but these are the trades we are watching as new candidates.
We will update this section in the morning.
********************************
11:00am (EST)
NEW TRADES!!!
Potash (POT, $38.72, up $0.12)
Buy to OPEN March 38 puts (POT130316P00038000, $0.50, down $0.08)
Action: We like these options at current levels for a possible double. Use limit orders to get the best fills.
Cyberonics (CYBX, $46.28, up $0.08)
Buy to OPEN April 40 puts (CYBX130420P00040000, $0.65, flat)
Action: Use limit orders up to 75-80 cents but do not pay over 85 cents to establish positions. We may or may not get filled at these prices but we are counting on our autotrading partners to work the spread for us.
Allstate (ALL, $45.28, up $0.17)
Buy to OPEN April 43 puts (ALL130420P00043000, $0.60, up $0.10)
Action: We like these options at current prices.
*************************
9:00am (EST) continued…
The S&P 500 declined 28 points, or 1.8%, to settle at 1,487. The index traded up to 1,525.84 and we said the bears needed to hold 1,525 to start the week. The bulls were looking for a push 1,550 but struggled matching last week’s high of 1,530 before the roof caved in. We specifically said the bulls needed to hold 1,495 or they faced risk down to 1,475 and the 50-day MA and possibly 1,450 this week. Yesterday’s 38-point swing was nearly 3% from the high to the low.
The Nasdaq got pounded for 45 points, or 1.3%, to end at 3,113. Tech made a run past 3,175, a level we said the bears need to defend, and after letting the bulls race to 3,186 the bears threw up a roadblock. The bulls needed to hold 3,150 but they couldn’t as the index closed below 3,125 which opened the door for a test to 3,100 and possibly 3,050 on continued weakness. Resistance remains strong at 3,175-3,200.
The Russell 2000 sank 20 points, or 1.9% to finish at 895. The small-caps made a push to 919 but couldn’t clear 920 and the close below 900 was super bearish. There is a chance 875 comes into play if the bulls cannot reclaim 900 this week. Meanwhile, the S&P 500 Volatility Index ($VIX, 18.89, up 4.82) jumped a whopping 34% and easily cleared 15 and 17.50. Hello 20.
There are a few more trades we have added to the Watch List and we may try to take one or two of them today if we can get good entry prices. We have also updated our current trades which got nice pops on yesterday’s pullback.
As we head to press, futures look like this: Dow (+19); S&P 500 (+2); Nasdaq 100 (+3).
Subscribers, check the Members Area for the updates and stay locked-and-loaded in case we add new trades after the open.
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 we list one. We will send out a “Profit Alert” or “New Trade” if we want you to close a position OR if a new trade comes out. Otherwise, follow instructions at all times in the 9am and 1pm updates. Also, we will usually give you a heads-up if we think we are going to send an email outside of these time frames. Closed Trades for 2013: 20-7, for a 74% win rate, including the Weekly Wrap that is 6-1).
9:00am (EST)
Powershares QQQ (QQQ, $66.31, down $0.83)
April 65 puts (QQQ130420P00065000, $1.30, up $0.40)
Entry Price: $1.00 (2/21/13)
Exit Target: $1.50-$2.00
Return: 30%
Stop Target: 75 cents
Action: We got our close below $67 and $65 s up next. From there, we expect a test support at $63.50 and where we will close half or all of the trade. We have a stop target listed but it is not a Hard Stop.
Spider S&P 500 (SPY, $149.00, down $2.89)
April 142 puts (SPY130420P00142000, $1.70, up $0.85)
Entry Price: $1.15 (2/21/13)
Exit Target: $1.80-$2.30
Return: 48%
Stop Target: $1
Action: The close below $150 was beautiful and we believe a quick test to the 50-day MA or $147 (1,475 on the S&P 500) is coming. There is a chance $145 trips on continued weakness.
Cree (CREE, $43.47, down $1.28)
March 42 puts (CREE130316P00042000, $0.90, up $0.25)
Entry Price: $0.85 (2/21/13)
Exit Target: $1.70
Return: 6%
Stop Target: None
Action: We are looking for a back test to $38 and the 50-day MA. A break below $38 would get $34 in play as there is a huge gap to fill following the breakout in January. We would like to see a close below $42.50 today.
Baidu (BIDU, $88.01, down $1.17)
April 80 puts (BIDU130420P00080000, $1.80, up $0.35)
Entry Price: $1.20 (2/20/13)
Exit Target: $2.40 (closed half @ $1.80 on 2/22/13)
Return: 50%
Stop Target: $1.20
Action: We have a near-term target of $85 for Baidu but we aren’t ruling out a drop to $60 over the next few months. We are trying to add to this position on further weakness and we are watching the March 82.50 puts (BIDU130316P00082500, $0.95, up $0.15).
Keryx Biopharmaceuticals (KERX, $6.62, down $0.08)
June 10 calls (KERX130622C00010000, $0.40, flat)
Entry Price: $0.70 (2/12/13)
Exit Target: $1.50
Return: -43%
Stop Target: None
Action: Support is trying to hold at $6.50 and yesterday’s low was $6.54. We are expecting a move up to $8 over the near-term but there is risk down to $4.50. Earnings are due out on Wednesday and will be the next catalyst that takes shares higher or lower.
Taiwan Semiconductor (TSM, $18.25, down $0.65)
April 20 calls (TSM130420C00020000, $0.20, down $0.10)
Entry Price: $0.25 (1/3/13)
Exit Target: $0.75
Return: -20%
Stop Target: None
Action: Shares closed right at $18.25 and where we said we may exit. This has been one of our longest running trades this year and we wished we would have went with the march options as we would likely be showing a profit. These options are still “cheap” so we may leave them open depending on where we are at this afternoon. We do believe a “relief” rally could come on positive developments on the sequester but we aren’t holding our breath. We still think shares will trip $20 this year but there may be a back test to $17.50 on continued weakness.
MGM Resorts International (MGM, $12.19, down $0.23)
June 15 calls (MGM130622C00015000, $0.25, flat)
Entry Price: $0.40 (1/2/13)
Exit Target: $0.80
Return: -38%
Stop Target: None
Action: There is risk down to $11.50-$11 on further weakness and we will need shares to clear $13 before we can say they have momentum. We are using MGM as an online poker play and we have a $20 price target for the stock over the next 6-12 months. We may have to put the trade on hold but we are leaving it open for the time being.
Other 2013 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 we would not open any new positions. We are still keeping track of the trades and we will record the results, accordingly, when we close them or if the options expire. Click on the 2013Portfolio link in the Members Area to view ALL open/ closed trades.
Vivus March 17 calls (from January 2013) – Continue to hold
Apache March 90 calls (from February 2013)– Continue to hold
ADT March 50 calls (from January 2013)– Continue to hold
WATCH LIST SECTION
These trades are NOT recommendations. They are trades that we like but have not added to the portfolio as an official recommendation because of market conditions or because we are waiting for better entry prices. We try not to have more than 12-15 open trades at any one time which is why we created a Watch List. We will not list entry prices because these stocks are on the verge of breaking out or they could sell off but these are the trades we are watching as new candidates.
iShares Russell 2000 (IWM, $89.02, down $2.01)
March 89 puts (IWM130328P00089000, $2.00, up $0.85)
March 87 puts (IWM130322P00087000, $1.00, up $0.45)
Thoughts: We may add the March 87 puts on further weakness on the Russell 2000. They are WEEKLY options so if we do add them make sure you add the ones that expire on March 22. For those of you in the 89’s, start protecting profits.
Potash (POT, $38.60, down $0.55)
March 38 puts (POT130316P00038000, $0.58, up $0.21)
Action: We wanted to get into some puts on the break below $40 last week but we went with the index plays instead. Potash could be headed for new 52-week lows and a break below $37 would get us there.
Mellanox Technologies (MLNX, $51.56, down $1.29)
March 47 puts (MLNX130316P00047000, $0.55, up $0.10)
Thoughts: A break below $50 would be bearish for a trip to the mid to low $40’s.
Cyberonics (CYBX, $46.20, down $0.45)
April 40 puts (CYBX130420P00040000, $0.65, up $0.10)
Thoughts. We believe shares are on their way for a test to $40.
Allstate (ALL, $45.36, down $1.38)
March 45 puts (ALL130316P00045000, $0.65, up $0.33)
April 44 puts (ALL130420P00044000, $0.90, up $0.30)
Thoughts: We are now following the March 45 puts as the March 46 puts got a nice pop yesterday. The April 45 puts were up 70% yesterday so we are following the April 44’s.
DeVry (DV, $30.61, down $0.71)
March 30 puts (DV130316P00030000, $0.50, up $0.10)
Thoughts: The open interest in te March 30 puts have exploded over the past few weeks and are above 10,000 contracts.
Caterpillar (CAT, $89.16, down $2.38)
March 90 puts (CAT130316P00090000, $2.30, up $1.15)
March 87.50 puts (CAT130316P00087500, $1.35, up $0.75)
April 80 puts (CAT130420P00080000, $0.80, up $0.30)
Thoughts: We said last week if $90 cracks, shares could test $85 if the 100-day and 200-day MA’s start to fall.
Ironwood Pharmaceuticals (IRWD, $14.50, flat)
May 15 calls (IRWD130518C00015000, $1.05, flat)
Thoughts: We have been mentioning shares could retest resistance at $15 and a break above this level could lead to $20 down the road.