9:00am (EST) continued…
The Dow jumped 128 points, or 0.8%, to end at 15,746 on Wednesday. The blue-chips opened at 15,628 and never looked back as they reached an all-time intraday peak of 15,750 and came within a Jackson of triggering our 15,800 target that sets up the run to 16,000. Support will now try to hold at 15,600 that served as prior resistance with 15,400-15,350 proving backup.
The S&P 500 added 7.5 points, or 0.4%, to finish at 1,770. The index opened at 1,765 and made another run at 1,775 with a push to 1,773 but failed to clear and hold this level. If it can, hello 1,800. The bulls now have a 1% cushion above support at 1,750 and this level will be a clear signal on when to go short if it cracks.
The Nasdaq slipped 8 points, or 0.2%, to settle at 3,931. We have been mentioning a close above 3,950 should get 4,000 in play and Wednesday’s high reached 3,955 before the pullback to 3,920. The dip below 3,925 still keeps 3,900 in play but the close above it was bullish.
The Russell 2000 declined 5 points, or 0.45%, to close at 1,098. The small-caps were up a 6-pack on the open to 1,109 but slipped below 1,100 soon afterwards. The low was a point below the close with risk down to 1,075. We have said a close above 1,110 gets 1,125 back in the mix and today could give us a clue which was the recent see-saw battle will break.
The S&P Volatility Index ($VIX, 12.67, down 0.60) stayed in negative territory following a brief pop to 13.33 on the open and went out at its low for the session. A dip below 12.50 would signal the next leg up is underway as the VIX could test 11-10 on a continued rally.
Twitter (TWTR) is coming public today and announced after last night’s close the final offering price would be $26. We expect shares to trade within an hour after the open and if take a trade for our Weekly Wrap we will send out a Trade Alert. We will certainly take a look at the options once they are available to trade and we will keep you updated when they list.
As we head to press, futures look like this: Dow (+80); S&P 500 (+7); Nasdaq 100 (+9).
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: 126-63 – 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.
Kodiak Oil & Gas (KOG, $12.30, down $0.23)
December 13 calls (KOG131221C00013000, $0.45, down $0.15)
Entry Price: $0.65 (11/4/13)
Exit Target: $1.30
Return: -31%
Stop Target: None
Action: Shares tagged a 52-week high of $12.82 before falling 2% by the close. The low checked in at $12.20 and there is risk down to $12. Resistance is at $13.
H&R Block (HRB, $28.64, down $0.98)
December 30 calls (HRB131221C00030000, $0.55, down $0.35)
Entry Price: $0.60 (10/29/13)
Exit Target: $1.20
Return: -8%
Stop Target: 60 cents
Action: Support is at $28. Resistance at $30 and if cleared the 52-week high of $32.09 should come into play.
Millennial Media (MM, $7.09, up $0.07)
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, $60.77, up $0.47)
December 62.50 calls (DD131221C00062500, $0.50, up $0.05)
Entry Price: $0.60 (10/24/13)
Exit Target: $1.20
Return: -17%
Stop Target: None
Action: Support at $60. 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.
Cliff’s Natural Resources (CLF, $27.98, down $0.21)
December 31 calls (CLF131221C00031000, $0.75, down $0.15)
Thoughts: We could go long on a break above $29 with these call options.
Cedar Fair (FUN, $45.47, up $0.02)
December 40 puts (FUN131221P00040000, $0.25, flat)
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, $38.53, down $0.89)
December 45 calls (VPHM131221C0004500, $0.40, down $0.35)
Thoughts: We could add these calls on a pop past $40.
Annie’s (BNNY, $48.00, down $0.70)
November 50 calls (BNNY131116C00050000, $0.65, down $0.30)
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, $48.05, down $0.12)
December 50 calls (ABBV131221C00050000, $0.65, down $0.05)
Thoughts: We could get into these call options on a move past $50.
Opko Health (OPK, $10.31, down $0.41)
December 11 calls (OPK131221C00012000, $0.70, down $0.20)
January 12 calls (OPK140118C00012000, $0.70, down $0.15
Thoughts: There is risk down to $9.50 and we will likely wait for $11 to clear before getting back into this name. The December 11’s opened at 65 cents, the January 12’s at 80 cents on Monday.
Keryx Biopharmaceuticals (KERX, $14.28, up $1.10)
December 13 calls (KERX131221C00013000, $2.10, up $0.80)
Thoughts: We said a run to the mid-teens could be coming and shares reached a high of $14.49 yesterday. These options opened at $1 on Monday.
iShares Russell 2000 (IWM, $109.12, down $0.47)
December 113 calls (IWM131221C00113000, $0.80, down $0.20)
December 102 puts (IWM131221P00102000, $0.60, up $0.05)
Thoughts: We could go long on a pop above $111 or short on a close below $108.
Salesforce.com(CRM, $55.23, down $0.46)
December 60 calls (CRM131221C00060000, $1.40, down $0.15)
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.