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 “Trade Update” 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 but it is rare that we do.
1:15pm (EST)
Special Notice: We do have 2 put option trades that are open but they are still down over 50%. We will bring back coverage if they make a comeback this week or if we take action.
As far as our current trades, we said we will lose some March plays but the April and longer-term options on some of our other trades should be okay although they are suffering today.
We mentioned how February would be a choppy market and while we will close some losers, we also have two huge winners we are currently managing which has given us a decent February, overall. We said coming into the month that you never want to be out of the market because one good option trade of 200% or 300% will finance a lot of other trades and will allow you to take some risk with lower priced options or “cheap” out-of-the-money” calls.
While we are eagerly awaiting our remaining positions to square up, we should be at a point next week to reload our portfolio for a continued downside move or the mother of all rebounds starting with today’s 2 new trades. Fund managers are getting a second chance to make their clients some money this year so at some point they will buy the dip.
Our current Track Record for 2012 is 30-3 for the Daily and 12-0 for the Weekly Wrap. While we always hate losing trades, we will be in the neighborhood of 50-10 after the March batch of trades run their course so we can’t beat ourselves up to bad. Plus the Daily portfolio is up 170% in just 2 months. We have turned $10,000 into $30,000. However, we do get nasty emails from time-to-time because new subscribers may join us in choppy markets. If you joined us in February then chances are you aren’t too happy, because the market has been in a tight range which hurts options premiums.
We do have a long-term 5-year track record of over a 70% success rate for all of our trades and while most of you new subscribers seem frustrated and have asked why we aren’t buying puts today then hopefully some of today’s shop-talk will help.
We are expecting our next 50 trades to do just as well as our first 50 so relax and enjoy the ride. We are winding down the current cycle and the market should be at a make-or-break point when we go on the attack again.
NEW TRADES!!!
Pepsico (PEP, $62.29, down $0.50)
Buy to OPEN July 65 calls (PEP120721C00065000, $0.95, down $0.15)
Action: Use limit prices up to $1 but do not pay more than $1.05 to establish positions. Also trade half the numbers of contracts you would normally trade.
Clean Energy Fuels (CLNE, $19.16, down $0.29)
Buy to OPEN June 25 calls (CLNE120616C00025000, $0.50, down $0.05)
Action: Use limit prices up to 55 cents but do not pay more than 60-65 cents to establish positions. Same deal here. If you normally buy 20 contracts, do 10.
CURRENT TRADES
Silver Wheaton (SLW, $34.89, down $1.82)
April 42 calls (SLW120421C00042000, $0.30, down $0.15)
Entry Price: $1.00 (3/1/12)
Exit Target: $1.50-$2.00
Return: -70%
Stop Target: 50 cents
Action: The April options have 45 days before they expire. Repeat, the April options have 45 days before they expire. We do expect QE3 to become a reality and we do expect silver to break $40 an ounce in 6 weeks. Continue to hold.
Adobe Systems (ADBE, $32.35, down $0.87)
April 35 calls (ADBE120421C00035000, $0.55, down $0.25)
Entry Price: $0.75 (2/28/12)
Exit Target: $1.50
Return: -27%
Stop Target: None
July 38 calls (ADBE120721C00038000, $0.60, down $0.20)
Entry Price: $0.70 (2/28/12)
Exit Target: $1.40
Return: -14%
Stop Target: None
Action: Adobe trended lower to start the week and there is a chance $32 comes into play but longer-term we expect new 52-weeh highs once shares clear $35. The current 1-year peak is $35.99 and we are looking for a run past $40 by July.
Sony (SNE, $20.33, down $0.40)
April 22 calls (SNE120421C00022000, $0.35, down $0.10)
Entry Price: $0.90 (2/27/12)
Exit Target: $1.60
Return: -61%
Stop Target: None
Action: There is a chance shares test $20 but we are expecting a pop to $25 if $22 is cleared.
U.S. Oil Fund (USO, $40.06, down $0.91)
April 45 calls (USO120421C00045000, $0.40, down $0.15)
Entry Price: $0.80 (2/24/12)
Exit Target: $1.60
Return: -50%
Stop Target: None
Action: We said there would be risk down to $40. We expect shares to make a run past $45 by mid-April and the high last week was $42.30 but we need these level to hold or we face risk down to $38.
magicJack VocalTec (CALL, $23.03, down $0.43)
June 22.50 calls (CALL120616C00022500, $3.00, down $0.25)
Entry Price: $1.10 (2/15/12)
Exit Target: $2.20 (closed quarter position at $2.10 on 3/1/12, closed quarter position at $3.40 on 3/2/12)
Return: 161%
Stop Target: $2.00 (HARD STOP on other half)
Action: Continue to hold.
Our average closing price on the two quarters we closed is $2.75 ($3.40 + $2.10/ 2). The current price on our other half is $3.00 which gives us our total return.
ValueClick (VCLK, $20.48, down $0.40)
June 23 calls (VCLK120616C00023000, $0.50, down $0.15)
Entry Price: $0.40 (2/15/12)
Exit Target: $0.80 (closed half position at $0.70 on 2/29/12)
Return: 50%
Stop Target: 40 cents
Action: Our near-term target is $22.50 then $25 for ValueClick but there is a chance shares hit $30 by June. Support is at $20 and we will close the other half of the trade if this level fails to hold.
Other 2012 Portfolio OPEN positions (10): These are trades that are still open in the portfolio that have longer expiration dates or 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 the options expire. Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
Newpark Resources March 10 calls (from January 2012) HOLD
iRobot March 40 calls (from February 2012) HOLD
Polypore International March 60 calls (from January 2012) HOLD
Abercrombie & Fitch March 39 puts (from February 2012) HOLD
PowerShares QQQ Trust March 60 puts (from February 2012) HOLD
Dendreon May 22 calls (from January 2012) HOLD
OCZ Technology Group March 10 calls (from February 2012) HOLD
Acme Packet March 37.50 calls, April 40 calls (from February 2012) HOLD
Freeport McMoRan March 45 calls (from February 2012) HOLD
Solazyme April 15 calls, March 15 calls (from January and February 2012)
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.
We will update this section in the morning.