1:40 p.m. (EST)
Wall Street rolled out the red carpet for Janet Yellen and she said all the right things to keep Friday’s action tame. While the possibility for volatility is there into the close, the tight action has been bullish although the indexes are currently mixed.
The Dow is down 11 points to 17,028 while the S&P 500 is off a point to 1,991. The Nasdaq is higher by 11 points to 4,543 and the Russell 2000 is gaining 2 points to 1,162.
Friday’s have been weak for a month but if the bulls can turn the blue-chips into green by the close, it would be a bullish sign for next week. This along with the VIX staying below 12.50. The game plan I outlined for the week has gone swimmingly well.
I would like to take a moment to break away from the market and trading as I have a Special Announcement to make and some cool stuff to talk about.
I want to update everyone on the current portfolios and give you a quick snapshot of the market, and more importantly, let you in on a little news about Momentum Options Trading.
The Daily Portfolio went into Thursday’s action on a 10-trade winning streak since mid-July and there were 3 winning trades for the Weekly Wrap over the same time period. This put me on a 13-trade win streak before I got Fossil-ed, literally.
Overall, since the beginning of July, the portfolios have gone 14-of-16. This is a success rate of 88%.
In 2012, I went unconscious from late March through mid-May as I recommended an incredible 33 of 34 and 40 of 42 winning trades by the end of May.
I am hoping to match that streak right now but every market is different and this has been a much harder market to trade than prior years. However, I am hitting on nearly 70% of my trades for 2014 and right at my 7-year Track Record on over 1,000 trades.
There are some options and investment newsletters with success rates under 25%, meaning 3 of 4 losers, and most option newsletters average less than a 40% win rate. More importantly, most “investment” newsletters don’t provide Track Records and don’t take the trades they “recommend”.
Wall Street often refers to the aforementioned time frame as the “summer doldrums” as many of them often take extended vacations and long 3 and 4-day weekends during the hot summer months.
Most of the suit-and-ties believe they deserve these luxury perks in life but it’s also why many of them have underperformed the market this year.
I have taken a “mini vacation” this summer but trading the stock market is a full-time job for me. I don’t take many vacations and they are working get-aways since I still work even if I’m at the beach. However, don’t think that is weird because I really love what I do and when I’m away and need to unwind, I do. I may also work shorter days when I’m on vacation but when you have money in the market, the natural urge to check positions or to take new trades is there no matter where you may be.
Fortunately, Momentum Options Trading is having another incredible year and I’m on track to make 2014 my 7th-straight year of profitable stock and option trades for my subscribers. Over this timeframe, I have navigated incredible market environments from the nasty 2008 market crash to the current bull run.
People called me crazy when I said the Dow would gain 3,000 points in 2013 (which happened) and called for the S&P to trigger 2,100 this year (still to be determined) but smelling like a rose.
The hard work has paid off and even better, my life and trading world have become so much easier.
As many of you know who have been with me through the years, I have built a loyal following by keeping a tight schedule with honest track records and I couldn’t have built MomentumOptionsTrading.com without your support. For that I am very grateful from the bottom of my heart. Seriously, cheers to you!
Some of you may not know that I also taught myself how to build a website not to mention the other complicated pieces that go along with starting a business (also being handled by Cat).
Despite the chaos of my busy life, the Daily closed trades 2014 Track Record is up an amazing 178% on nearly 100 trades while the Weekly Wrap is up 30% on 26 trades.
My success hasn’t gone unnoticed.
As many of you may know by now, I have been in talks with a major publisher about their interest in my option trades and market commentary. I have been working with my “new team” to ensure a smooth transition prior this announcement.
I’m now very happy to announce that, beginning September 1st, my partnership with InvestorPlace Media (www.investorplace.com) to bring you Momentum Options Trading under its new name, Momentum Options will be official.
This is a welcome step in my effort to make Momentum Options Trading better for you. It’s going to allow me the time to focus more intently on the research and analysis required to continue to bring you daily trades that have the potential to capture 100% profits or more.
InvestorPlace Media is the best and most established publisher of its kind, with more than 35 years in the business; they specialize in providing self-directed individual investors with the highest level of quality leadership and advice.
They presently manage advisory services for some of the brightest names in the financial field and I’m certainly pleased to be joining this group of world-class financial advisors.
They have a great customer support team with a 1-800 number and associates to help you with any and all questions you might have on the transition, billing, current memberships (which are being honored), and special offers.
I made it a policy of mine when I opened MOT to not answer emails or the phone while the market is open. I knew that if I did, I would distract myself from what I do best.
From Monday through Friday, every week and every day, I work when Wall Street is open. If they are closed for a holiday, I get a 3-day weekend or a bonus day off here and there.
Technology has made it possible for writing and trading to be my sole focus and now I have an entire team in place to launch Momentum Options to the next level.
My success has been built on a foundation of hard work, dedication and most importantly, integrity and honesty. I created this newsletter to prove that someone without a college degree, a blue-collar worker for much of my life, can conquer the stock market and options trading.
I taught myself how to do chart work, do fundamental AND technical analysis, how to use options to make mind-boggling profits and how to play the stock market consistently well whether it’s going UP or DOWN.
I learned HOW to trade the market when the Dow was tanking 500 points a day because EVERYONE will tell you when there is a correction, or one is coming as they have been hinting all this year and last, not to buy stocks.
The problem with this “strategy” is that as an investor, by not knowing how to trade the market when it is falling, or how to short a stock when it is tanking – it eliminates HALF of your playbook. You think Peyton Manning would use a half a playbook?
When there is a massive pullback, I will be fully prepared to handle it as I track the markets every single day.
I am a grinder, I hunt for research, I don’t take short cuts and I don’t know anyone on Wall Street. I have time-stamped and dated ALL of my trades from winning streaks to losing streaks and everything in between.
My goal is to teach you how to make money in the market and it requires a commitment from you as well. If you read me twice a day, you too will become a market guru. Repeat. If you read my Daily newsletter twice a day, 5 days a week, you will become a successful trader.
You will know when the market is on the verge of breaking out or breaking down or if it’s in a trading range – providing you take 20 minutes a day and to read my 2 quick updates. They come out at 9am and 12pm-1pm every day but the best past is I do the homework for you.
I know I have Rambled On and I have sung my song so it is time to get to the current trades. In closing, I do thank all of you that have been on board with me since this journey and welcome to those of you coming aboard.
I will be watching the market’s close, intently, to see what further clues the bulls might be offering or what traps the bears might be laying.
There could be a Trade Alert or Profit Alert ahead of the bell but I will likely stay pat. If you do not hear from me, I will be back Sunday night with the Weekly Wrap and Monday morning with the Daily. Until then, have a great weekend, everyone!
Momentum Options Play List
Closed Trades for 2014: 83-40 – the Weekly Wrap is 22-4 (85%) for 2014 (107-11, or 91% win rate, since 2011) and is designed for traders that want to use options with less risk. 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 9am and 12pm-1pm 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.
Sony (SNE, $18.91, up $0.09)
September 19 calls (SNE140920C00019000, $0.40, flat)
Entry Price: $0.45 (8/20/2014)
Exit Target: $0.90
Return: -11%
Stop Target: None
October 20 calls (SNE141018C00020000, $0.30, flat)
Entry Price: $0.25 (8/20/2014)
Exit Target: $0.50-$0.75
Return: 20%
Stop Target: None
October 19 calls (SNE141018C00019000, $0.55, flat)
Entry Price: $0.45 (8/18/2014)
Exit Target: $0.90
Return: 22%
Stop Target: 45 cents (Stop Limit)
Action: I would like to see a close above $19 today which should get $20 in play. Support is at $18.75.
Keryx Biopharmaceuticals (KERX, $15.91, up $0.28)
September 18 calls (KERX140920C00018000, $0.70, up $0.10)
Entry Price: $0.75 (8/20/2014)
Exit Target: $1.50
Return: -7%
Stop Target: None
Action: Keryx has a Phase 3 drug, Zerenex, that could gain FDA approval at some point this year or next. News could be coming in the next few weeks and I will give you the full scoop on Monday morning of what I am expecting over the next week or two.
Yahoo (YHOO, $37.96, up $0.32)
September 38 calls (YHOO140920C00038000, $1.75, up $0.10)
Entry Price: $1.25 (8/11/2014)
Exit Target: $1.90-$2.50 (Limit Order to close half at $1.90)
Return: 40%
Stop Target: $1.40 (Stop Limit)
October 43 calls (YHOO1018C00043000, $1.00, up $0.10)
Entry Price: $0.80 (8/11/2014)
Exit Target: $1.20-$1.60
Return: 25%
Stop Target: 80 cents (Stop Limit)
Action: I would like to see $37-$36.75 hold on any pullback but this would likely trigger the Stop Limits. A close back above $37.75-$38 keeps $40 in play.
World Wrestling Federation (WWE, $14.44, down $0.07)
September 15 calls (WWE140920C00015000, $0.50, up $0.15)
Entry Price: $0.50 (8/6/2014)
Exit Target: $1.00+
Return: 0%
Stop Target: None
Action: A close above $14.75 would be bullish.
The 2 prior WWE trades made 203% (in early March) and 133% (in early August). This is a piggy-back trade that I’d like to see perform just as well and only cost 50 cents.
Pool (POOL, $56.50, up $0.34)
October 50 puts (POOL141018P00050000, $0.45, flat)
Entry Price: $1.10 (7/16/2014)
Exit Target: $2.20-$3.30
Return: -59%
Stop Target: None
Action: A break below the July low of $54.16 would be bearish and could lead to $50 and fresh 52-week lows. Longer-term resistance is at $57 along with the 200-day MA.
The break-even point for the trade is at $48.90, technically, by mid-October. These options have over 2 months before they expire.
Trades on Hold – other 2014 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 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 2014 Portfolio link in the Members Area to view ALL open/ closed trades.
Fortinet September 28 calls (from June 2013) – The 52-week high is at $26.23 and shares are acting like they want to clear $26 and make a run at fresh highs – continue to hold.
CVS Caremark September 82.50 calls (from July 2014) – Shares are still trying to crack $80 and the trade is down 56%. I will bring back coverage once cleared – continue to hold.
S&P 500 Spiders September 180 puts (from August 2014) – Like blackjack, I’m considering this trade as “insurance” as the puts still have a month before they expire. Perhaps they pay off, maybe not but the tremendous gains in the other trades makes me feel comfortable holding the trade open. Remember, the bulls like taking the stairs higher. The bears love taking the elevator – continue to hold.