9:00am (EST) continued...
The Dow gained 23 points, or 0.15%, to settle at 15,639. The dip to 15,588 and below 15,600 was as far as the bears got as the bulls pushed a peak of 15,658. The 52-week and all-time high is at 15,721 and we would like to see a push to 15,800 this week. A close below 15,600 keeps 15,400-15,350 in play.
The S&P 500 added a 6-pack, or 0.4%, to end a shade under 1,768. The low of 1,761 came a little over an hour into the session but the index went out near its high of 1,768.78. Support at 1,750 continues to build a solid base as the S&P has held this level by the close in 9 the last 10 sessions and 8-straight. A close above the all-time intraday high of 1,775 gets 1,800 in play.
The Nasdaq jumped 14 points, or 0.4%, to finish at 3,936. Tech traded down to 3,919 after the open but the 3-point loss was brushed off quickly as the index reached a peak of 3,937.50. Support at 3,900 has been holding since mid-October and a break above 3,950 should get 4,000 on the bulls radar again.
The Russell 2000 zoomed a dozen points, or 1.1%, to close at 1,108. We said a test to 1,075 could come to shake out the weaker hands but the small-caps held green from start to finish and easily regained the 1,100 level while going out near their high. There is a hurdle at 1,110 and a close above resistance at 1,125 would be bullish for a continued run to fresh all-time highs.
The S&P 500 Volatility Index ($VIX, 12.93, down 0.35) kissed a high of 13.67 on the slight pullback after the open but dropped below 13 by the close and touched 12.91. We have said the bulls are looking to get the VIX below 12.50 and if they do a test to 10 could be in the cards. A close above 15 continues to be our warning sign a top is in but 14.50 would be the smoke signal.
MEMBERS AREA
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 tradesor “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: 124-63 – the Weekly Wrap is 40-4 for 2013 (84-6 since 2011) and is designed for traders that want to use options with less risk.
Special Update – Boston Scientific November 12 calls are “at-the-money” and our breakeven point is $12.55. This level is also resistance. These options are down a little over 50% and we will be bringing back coverage, hopefully, this afternoon, as we try to get back to even. There is still a chance we squeeze a profit out but they expire in 11 days so we need a breakout as well.
Kodiak Oil & Gas (KOG, $13.04, up $0.66)
December 13 calls (KOG131221C00013000, $0.85, up $0.30)
Entry Price: $0.65 (11/4/13)
Exit Target: $1.30
Return: 31%
Stop Target: None
Action: We said shares were showing strength and could trip $13. Yesterday’s high was $13.07 and the close above $13 was bullish as it sets up a run to $13.50-$14.
Cliff’s Natural Resources (CLF, $28.70, up $1.36)
November 25 calls (CLF131116C00025000, $3.75, up $1.30)
Entry Price: $0.95 (10/21/13)
Exit Target: $5 (closed half @ $1.25 on 10/31/13)
Return: 163%
Stop Target: $2.50, raise to $3 (Stop Limit)
December 30 calls (CLF131221C00030000, $1.30, up $0.45)
Entry Price: $0.70 (11/1/13)
Exit Target: $1.40
Return: 86%
Stop Target: $0.50, raise to $0.75
Action: Shares traded to a high of $28.98 and we mentioned a close above $29 should get the low $30’s in play. We have raised the stops to protect profitsin case tesistance holds and there is a pullback.
H&R Block (HRB, $29.43, up $0.54)
December 30 calls (HRB131221C00030000, $0.90, up $0.20)
Entry Price: $0.60 (10/29/13)
Exit Target: $1.20
Return: 50%
Stop Target: None
Action: Resistance at $29 cleared and a close above this level should get the low $30’s in play. Support is at $28 but will now try to hold at $29.
Millennial Media (MM, $7.01, down $0.03)
December 7.50 calls (MM131221C00007500, $0.75, flat)
Entry Price: $0.65 (10/25/13)
Exit Target: $1.30
Return: 15%
Stop Target: None
Action: Shares are hovering around the 50-day MA with resistance at $7.25. A close above this level could lead to a run to $8 and we have a longer-term target of 10+. Support is at $6.75-$6.50.
DuPont (DD, $60.31, down $0.78)
December 62.50 calls (DD131221C00062500, $0.45. down $0.25)
Entry Price: $0.60 (10/24/13)
Exit Target: $1.20
Return: -25%
Stop Target: 60 cents
Action: Shares held $60 by the close and we would like to see some momentum return this week. Resistance is at $62-$63.
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.
Boston Scientific November 12 calls (from October 2013) – HOLD
Aruba Networks November 20 calls (from October 2013) – HOLD
Catamaran November 52.50 calls (from October 2013) – 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.
AOL (AOL, $38.72, up $2.04)
November 40 calls (AOL131116C00040000, $1.40, up $0.60)
November 34 puts (AOL131116P00034000, $0.45, down $0.45)
Thoughts: Earnings are out this morning and the CEO will be on the tube. We profiled this as strangle trade for our Weekly Wrap and the calls opened at $1.10 while the puts opened at $0.80.
Fossil (FOSL, $130.20, up$1.54)
November 155 calls (FOSL131116C00155000, $0.60, up $0.15)
November 100 puts (FOSL131116P00100000, $0.40, down $0.05)
Thoughts: The calls opened at 45 cents, the puts at 40 cents.
Coors Brewing (TAP, $54.21, up $0.22)
November 55 calls (TAP131116C00055000, $0.70, up $0.05)
Thoughts: A run past double-nickels could come on an earnings beat.
Cedar Fair (FUN, $45.60, up $0.11)
December 40 puts (FUN131221P00040000, $0.25, down $0.10)
Thoughts: We love the risk/ reward these options offer and if we take action it will likely be Tuesday or Wednesday. We will send out a Trade Alert if we do.
ViroPharma (VPHM, $39.00, flat)
December 45 calls (VPHM131221C0004500, $0.70, flat)
Thoughts: We could add these call on a pop past $40.
Annie’s (BNNY, $48.62, up 1.09)
November 50 calls (BNNY131116C00050000, $0.90, up $0.20)
Thoughts: The bid/ ask is a little wide and while puts might be the better option, these calls could do well if revenues come in above expectations.
AbbVie (ABBV, $48.76, down $0.20)
December 50 calls (ABBV131221C00050000, $0.90, down $0.15)
Thoughts: We could get into these call options on a move past $50.
Opko Health (OPK, $10.75, up $0.73)
December 11 calls (OPK131221C00012000, $0.90, up $0.30)
January 12 calls (OPK140118C00012000, $0.85, up $0.25)
Thoughts: The December 11’s opened at 65 cents, the January 12’s at 80 cents.
There is risk down to $9.50 and we will likely wait for $11 to clear before getting back into this name. We made some huge profits on the run to $13 last month and shares are volatile which is what we like to see.
Keryx Biopharmaceuticals (KERX, $11.10, up $0.46)
December 13 calls (KERX131221C00013000, $1.05, up $0.20)
Thoughts: Support at $10 has been holding strong and a run to the mid-teens could be coming over the next 3-6 months. These options opened at $1 on Monday.
iShares Russell 2000 (IWM, $109.97, up $1.26)
December 114 calls (IWM131221C00114000, $0.75, up $0.20)
December 102 puts (IWM131221P00102000, $0.55, down $0.25)
Thoughts: We could go long on a pop above $111 or short on a close below $108.
Salesforce.com(CRM, $55.58, up $1.62)
December 60 calls (CRM131221C00060000, $1.50, up $0.45)
Thoughts: We believe shares will make a run past $60 as long as $50 holds and $55 is cleared. These options opened at $1.20 on Monday.