1:10 p.m. (EST)
The bulls are trying to extended their Friday win streak to 9-straight following yesterday’s pullback. If you include the Thursday ahead of the July 4 holiday, it would be 10-straight to end the week if the bulls hold their gains into the close.
Needless to say, it has been a volatile week but if the current gains do hold, the bulls will get the weekly win by taking three of the four major indexes. The exception being the small-caps.
Earnings will continue to gain traction along with geopolitical events and weekend news could weigh on Monday’s open, good or bad.
The Dow is up 98 points to 17,075 and the S&P 500 is gaining 16 points to 1,974. The Nasdaq is higher by 55 points to 4,418 while the Russell 2000 is advancing 17 points to 1,150. The VIX is at 12.05, down 2.49, or 17%.
Next week promises to be just as exciting and I can’t wait to do the weekend homework and chart work to see where the action could be headed.
There are a few last minute updates I have for you ahead of the weekend and I will be watching the close for important clues on how next week shakes out. While I don’t like opening new positions on Friday’s, there could be an exception as the current volatility is creating some incredible strangle option trades.
If you don’t hear from me ahead of the closing bell, I will be back Sunday night with the Weekly Wrap and on Monday morning with the Daily. Until then, have a great weekend everyone!
Closed Trades for 2014: 67-35 – the Weekly Wrap is 20-4 (83%) for 2014 (105-11, 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 we 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.
Pool (POOL, $56.27, up $0.62)
October 50 puts (POOL141018P00050000, $0.65, down $0.10)
Entry Price: $1.10 (7/16/2014)
Exit Target: $2.20-$3.30
Return: -41%
Stop Target: None
Action: Resistance holding at $57. I would like to see shares finish below $55 today but would be happy with a close below $56.
Alexza Pharmaceuticals (ALXA, $5.02, flat)
January 5 (2015) (ALXA150117C00005000, $0.90, flat)
Entry Price: $0.75 (7/14/2014)
Exit Target: $1.50
Return: 20%
Stop Target: None
Action: The 52-week high is at $5.93. I would like to see $5 hold on any pullback and a new floor of support form.
Fortinet (FTNT, $23.84, up $0.15)
September 28 calls (FTNT140920C00028000, $0.40, flat)
Entry Price: $0.55 (6/30/2014)
Exit Target: $1.10
Return: -27%
Stop Target: None
Action: A close below $23.50 could lead to $23. I would like to see $24 clear by today’s close. These are September options and they have 2 months before they expire. This gives the trade plenty of time to ride out the near-term volatility. Earnings are due on July 23rd and I believe they will announce a blowout quarter.
Rambus (RMBS, $13.58, up $0.02)
August 15 calls (RMBS140816C00015000, $0.25, flat)
Entry Price: $0.60 (6/30/2014)
Exit Target: $1.20
Return: -58%
Stop Target: None
August 16 calls (RMBS140816C00016000, $0.20, flat)
Entry Price: $0.33 (6/30/2014)
Exit Target: $0.65-$1
Return: -39%
Stop Target: None
Action: Resistance is at $13.75-$14. The company will announce earnings on Monday.
General Motors (GM, $37.25, up $0.15)
September 32 puts (GM140920P00032000, $0.25, flat)
Entry Price: $0.40 (6/23/2014)
Exit Target: $0.80-$1.20
Return: -38%
Stop Target: None
Action: Resistance is at $38. I would like to see a break below $37 ahead of the weekend.
Limelight Networks (LLNW, $2.87, up $0.06)
September 3 calls (LLNW140920C00003000, $0.30, flat)
Entry Price: $0.15 (6/4/2014)
Exit Target: $0.45 (closed 1/4 at $0.35 on 7/8/14)
Return: 117%
Stop Target: None
December 3 calls (LLNW141220C00003000, $0.40, flat)
Entry Price: $0.20 (6/4/2014)
Exit Target: $0.60 (closed 1/4 at $0.45 on 7/8/14)
Return: 113%
Stop Target: None
Action: I would like to see shares reclaim $2.90-$3 today. A close below $2.75 could lead to $2.50. The company will announce earnings on August 4th.
Other 2014 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 2014 Portfolio link in the Members Area to view ALL open/ closed trades.
Apollo Group August 23 puts (from April 2014) – continue to hold – shares are below $30 and a drop under $28 would help get this trade rolling again.