9:00am (EST)
The Dow fell 80 points, or 0.5%, to finish at 15,307. The blue-chips made a run to 15,542 and right between our 15,500-600 target before pulling back to a low of 15,265. We said near-term support was at 15,300 and there could be help at 15,100 but a close below this level could lead to a test down to 15,000-14,800. The 300-point swing from high to low is a warning sign volatility could be picking up.
The S&P 500 sank 14 points, or 0.8%, to settle at 1,655. The index cleared our 1,675 target after reaching a peak of 1,687 before slipping to 1,648.86. We mentioned support at 1,650 was crucial in holding on any pullback and a close below this level could lead to 1,625-1,600.
The Nasdaq dropped 39 points, or 1.1%, to end at 3,463. Tech had already cleared our 3,500 target earlier this week and we said there could be some fluff up to 3,600 but the best the bulls could do was 3,532 yesterday. This was still a fresh 52-week and 13-year high but the break below 3,450 to 3,446 opened the door for a possible back test to 3,400.
The Russell 2000 tanked 16 points, or 1.7%, to close at 982. The small-caps reached 1,008 and looked great until folding like a cheap lawn chair to a low of 977. Support at 975 held and was prior resistance but a close below this level could get 950 back in the mix.
The S&P 500 Volatility Index ($VIX, 13.82, up 0.45) closed above 13.50 after kissing 14.45. The VIX held 15 but we said to watch 13.50 and then a close above 15 as possible warnings signs a pullback could be near.
Futures are showing a nasty open following some weaker-than-expected economic news from China late last night: Dow (-121); S&P 500 (-16); Nasdaq 100 (-30).
The first wave of support could be tested.
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 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: 60-33, including the Weekly Wrap that is 17-1).
Clean Energy Fuels (CLNE, $13.32, down $0.98)
July 16 calls (CLNE130720C00016000, $0.20, down $0.15)
Entry Price: $0.25 (5/22/13)
Exit Target: $0.50
Return: -20%
Stop Target: None
Action: Yesterday’s low was $13.25 and the major MA’s (50, 100, 200) are at $13.13 and $13.15. We would like to see $13 hold on further weakness and there is further support at $12.50. These are “cheap” July call options we picked up for a quarter and we have a mid-summer target of $17-$18
Solazyme (SZYM, $10.81, down $0.72)
June 12.50 calls (SZYM130622C00012500, $0.20, down $0.20)
Entry Price: $0.30 (5/20/13)
Exit Target: $0.75
Return: -33%
Stop Target: None
Action: We closed the June 10 calls to lock-in a triple digit profit of 300% and we still believe shares can make a run to $15. However, we didn’t like the close below $11 and we need $10 to hold on further weakness.
Petrobras (PBR, $18.36, down $0.61)
June 20 calls (PBR130622C00020000, $0.15, down $0.10)
Entry Price: $0.25 (5/17/13)
Exit Target: $0.50+
Return: -40%
Stop Target: None
July 20 calls (PBR130720C00020000, $0.30, down $0.20)
Entry Price: $0.45 (5/17/13)
Exit Target: $1.00+
Return: -33%
Stop Target: None
Action: Shares traded to a low of $18.21 and support is at $18. There is further risk down to $17 if this level fails to hold. A close above $19 keeps $20 in the mix and a possible run to $22-$24.
Beam (BEAM, $67.64, down $0.73)
June 72.50 calls (BEAM130622C00072500, $0.30, down $0.10)
Entry Price: $0.60 (5/16/13)
Exit Target: $1.20
Return: -33%
Stop Target: None
Action: If shares fall below $66 today, close the trade.
Goodyear Tire & Rubber (GT, $14.50. down $0.30)
June 14 calls (GT130622C00014000, $0.85, down $0.15)
Entry Price: $0.45 (5/16/13)
Exit Target: $0.90
Return: 100%
Stop Target: 90 cents (Hard Stop)
June 13 calls (GT130622C00013000, $1.60, down $0.30)
Entry Price: $0.45 (5/14/13)
Exit Target: $0.90 (5/16/2013 closed half @ $1.05)
Return: 206%
Stop Target: $1.70 (Hard Stop)
July 13 calls (GT130720C00013000, $1.70, down $0.25)
Entry Price: $0.60 (5/14/13)
Exit Target: $1.20 (5/16/2013 closed half @ $1.20)
Return: 146%
Stop Target: $1.75 (Hard Stop)
Action: Shares traded to a low of $14.28 and our Hard Stop of 90 cents on the June 14 calls was triggered. The June 13 calls traded to a low of $1.45 so the Hard Stop of $1.70 was also hit. The July 13 calls traded down to $1.65 so they were closed as well after the $1.75 Hard Stop triggered. We will keep GT on our Watch List and will likely get back in if and when shares close above $15.
MGM Resorts International (MGM, $15.08, down $0.46)
July 17 calls (MGM130720C00017000, $0.20, down $0.10)
Entry Price: $0.40 (5/10/13)
Exit Target: $0.80
Return: -50%
Stop Target: None
Action: Short-term support is at $14.50 and we like this trade as long as it holds. If this levels is triggered today, close the trade.
Yahoo (YHOO, $26.54, down $0.46)
July 28 calls (YHOO130720C00028000, $0.60, down $0.20)
Entry Price: $0.75 (5/8/13)
Exit Target: $1.50 (5/15/2013 closed half @ $1.20)
Return: 20%
Stop Target: 60 cents (Hard Stop)
January (2014) 31 calls (YHOO140118C00031000, $1.05, down $0.20)
Entry Price: $1.05 (5/8/13)
Exit Target: $2.10
Return: 19%
Stop Target: $1.05, lower to 80 cents (Hard Stop)
Action: Our Hard Stop of 60 cents was triggered on the July 28 calls after they traded down to 59 cents yesterday. The Stop Target of $1.05 is not a Hard Stop but we have lowered it to 80 cents and have made it one in case there is further weakness in Yahoo.
Financial Select Sector Spiders (XLF, $19.83, down $0.21)
June 19 calls (XLF130622C00019000, $0.90, down $0.20)
Entry Price: $0.50 (5/8/13)
Exit Target: $1.00 (5/15/2013 closed a third @ 90 cents)
Return: 80%
Stop Target: 90 cents (Hard Stop)
Action: The calls traded to a high of $1.37 as shares reached a peak of $20.35 but the drop back below $20 knocked us out of the other half of this trade after the calls traded to a low of 87 cents. We will keep the Financial Spiders on our Watch List.
Other 2013 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 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.
Keryx Biopharmaceuticals June 10 calls (from February 2013)
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.
Walter Energy (WLT, $19.37, up $0.41)
June 22.50 calls (WLT130622C00022500, $0.75, up $0.10)
July 22.50 calls (WLT130720C00022500, $1.30, up $0.15)
Thoughts: These options are expensive but there looks to be a good chance shares will test $25, possibly $28 on a takeover bid.
Financial Select Sector Spiders (XLF, $19.83, down $0.21)
July 20 calls (XLF130720C00020000, $0.40, down $0.10)
Thoughts: If support at $19 holds we may get back in Financial Spiders with these July call options.
Sony (SNE, $22.15, down $0.76)
July 25 calls (SNE130722C00025000, $0.60, down $0.20)
Thoughts: If $22 holds and shares cross back over $23 we can use these options to play a continued push higher.
Goodyear Tire & Rubber (GT, $14.50. down $0.30)
July 15 calls (GT130720C00015000, $0.55, down $0.15)
Thoughts: If we get back into GT these are the calls we are planning to use.
Rambus (RMBS, $7.80, down $0.22)
July 9 calls (RMBS130720C00009000, $0.20, down $0.05)
August 9 calls (RMBS130817C00009000, $0.30, down $0.05)
Thoughts: Shares could make a run at $10.
Apple (AAPL, $441.35, up $1.69)
June 475 calls (mini) (AAPL7130622C00475000, $3.20, up $0.10)
Thoughts: Weare watching these mini options for a possible rebound in Apple and a run past $450.
Spiders Gold Shares (GLD, $131.94, down $0.94)
June 125 puts (GLD130622P00125000, $1.50, up $0.15)
Thoughts: We would like to see a push back to $135 one more time and where we might add these put options.
SAIC (SAI, $15.26, down $0.23)
June 15 calls (SAI130622C00015000, $0.60, down $0.10)
Thoughts: We still like this stock for a run to $17 and we may have to start following the July calls.
Michael Kors Holdings (KORS, $60.46, down $0.77)
June 65 calls (KORS130622C00065000, $1.90, down $0.10)
Thoughts: Earnings are due out next week.
Regeneron Pharmaceuticals (REGN, $262.42, up $2.46)
June 310 calls (REGN130622C00310000, $2.30, up $0.15)
Action: Shares could test $250. A close back above $280 should get our $300 target in play.
Boeing (BA, $97.93, down $0.82)
June 100 calls (BA130622C00100000, $1.40, down $0.30)
Thoughts: We like these calls for a possible push past $100 as lomng as $95 holds.
JPMorgan Chase (JPM, $53.63, up $0.61)
June 55 calls (JPM130622C00055000, $0.70, up $0.25)
Thoughts: Shares could make a run at $55 as long as $50 holds. The options kissed $1.22 after shares reached a peak of $54.96.
Nasdaq OMX Group (NDAQ, $30.98, down $0.21)
June 31 calls (NDAQ130622C00031000, $0.80, down $0.15)
June 32 calls (NDAQ130622C00032000, $0.40, down $0.10)
Thoughts: We are expecting a push to $32 as long as short-term support at $30 holds.
Spider S&P 500(SPY, $165.93, down $1.24)
June 160 puts (SPY130622C00160000, $0.85, up $0.15)
Thoughts: Just in case we need a short-term put trade.