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S&P Triggers Fresh High/ Chipotle (CMG) Surges $77/ 2 New Trades!!!

Tuesday, July 22nd, 2014 Midday Update for 7/22/2014

S&P Triggers Fresh High/ Chipotle (CMG) Surges $77/ 2 New Trades!!!

1:10pm (EST)

The bulls are continuing their rebound off Monday’s lows as they have managed to clear resistance and push fresh highs.  Earnings have been mixed with some of the blue-chips taking a hit and Apple (AAPL, $94.32, up $0.38) is on deck after after today’s close.

One stock surging on a blowout quarter is Chipotle Mexican Grill (CMG, $667.25, up $77.32).  Customers easily brushed off higher prices and anted up as the company earned $3.50 a share, on revenue of $1.05 billion.  The suit-and-ries were looking for $3.09 a share on sales of $990 million.  Wow.

I mentioned yesterday shares could move 8%-10% and today’s 13% move has been a windfall for option traders that went long.

I profiled the August 640 calls (CMG140816C00640000, $31.90, up $21.10) at $7.45 in Monday’s midday update and they have zoomed over 300%.

I also provided some insurance with the August 520 puts (CMG140816P00520000, $0.25, down $5.25) which were at $5.70.  Needless to say, these options were crushed on the better-than-expected results they are down 95%.

The cost to do this strangle option trade would have been $13-$14 or $1,300-$1,400 for one call and one put option.  At current levels, the position would be valued at $32.15, or $3,215.  This would equate to a return of 130%-150%.

For the high rollers that have emailed me this morning, yes, cash out the position.  I mentioned a triple-digit return would occur if shares surged above $670 and the parameters of the trade have been met.

As far as the market, the Dow is gaining 64 points to 17,116 and the S&P 500 is higher by 11 points to 1,985.  The Nasdaq is higher by 32 points to 4,460 while the Russell 2000 is up 13 points to 1,160.

Subscribers, check the Members Area for the New Trades and current updates.

Bears Growl, Bulls Hold Support

Tuesday, July 22nd, 2014 Morning Update for 7/22/2014

Bears Growl, Bulls Hold Support

9:00am (EST)

The bulls started Monday’s session behind the 8-ball following an opening attack by the bears but limited the damage by the close after holding support.  The mini-trading range that has developed over the past 2 weeks has seen both sides struggle with support and resistance.  This has frustrated Wall Street but bigger moves and a possible new trend are on the verge of developing. (read more…)

The Dow fell 48 points, or 0.3%, to close at 17,051.  The blue-chips traded to a low of 16,974  on the open before recovering the 17,000 level by lunch.  The rebound to 17,095 late in the day came within 5 points of breakeven and keeps 17,200-17,300 in play.  A close below 16,900-16,800 would be bearish.

The S&P 500 slipped 4 points, or 0.2%, to settle at 1,973.  The bears pushed 1,965 shortly after the opening bell before the bulls recovered to reach 1,976.  The 1,975-1,970 level held with backup support at 1,960-1,950.  A close above 1,980-1,985 would be bullish for a run at 2,000.

The Nasdaq dropped 7 points, or 0.2%, to end at 4,424.  Tech tested 4,404 at the start of trading and held 4,400 before pushing positive territory by a third of a point shortly after yesterday’s midday update.  The close below 4,425 was slightly bearish and 4,450 has been a brick wall.

The Russell 2000 declined 5 points, or 0.4%, to finish at 1,146.  The small-caps kissed 1,140 but held this level while finishing below 1,150.  This was both bullish and bearish as a close below 1,140 would not be good news.  A recovery of 1,150, and more importantly 1,160, would be a good sign higher highs are in store.

The S&P 500 Volatility Index ($VIX, 12.81, up 0.75) jumped 6% and closed above 12.50 after reaching a peak of 13.62.  The bulls held 13.50 but the bears cleared 12.50 again.  The breakout or breakdown points for the market are closes below 11.50 or above 15.  Until then, a volatile trading range will likely continue.

Futures are showing a higher open heading from desk to press:  Dow (+21); S&P 500 (+3);  Nasdaq 100 (+6).

Chipotle Mexican Grill (CMG) on Deck

Monday, July 21st, 2014 Midday Update for 7/21/2014

 Chipotle Mexican Grill (CMG) on Deck

1:10pm (EST)

I have recommended bullish positions on Chipotle Mexican Grill (CMG, $585.21, down $7.21) in the past when shares were under $100 and in the low triple-digits but it has been a few years since I have played the options due to their expensive premiums.

McDonalds (MCD, $98.12, down $0.87) had been a major investor in the company but cashed out their position when the company went public in 2006.  Probably not their best decision as Chipotle has easily overtaken the burger chain in popularity.

Earnings are due out after the close and there is a good chance Chipotle shares move $55-$60, or 8%-10%, in extended trading.

The company missed estimates by 22 cents last time out with a prior match and miss by 12 cents over the past 3 quarters.  If the company doesn’t come in with a beat and raise this time around shares could get pounded.

Shares fell $23 in April from $552 to $519 but tested $472 six sessions later after earnings were announced.  In January, CMG jumped from $493 up to $551 on the earnings match the following trading session.  In October 2013, shares zoomed from $439 to $509, or 70 points after earnings.

The August 640 calls (CMG140816C00640000, $7.45, down $0.90) and the August 520 puts (CMG140816P00520000, $5.70, up $1.15) could be used as a strangle option trade to play the possible move but they are expensive.  Also, if shares fail to make a huge pop and move less than $30, these premiums will get whacked.

The cost to do this strangle option trade would be $13-$14 or $1,300-$1,400 for one call and one put option.  If shares move $60-$70, the stock would be at $645-$655 or $525-$515.  The break-even points for the strangle option trade would be $653 or $507, technically, by mid-August.

There is a chance to possibly make a double-digit return with these options.  These are August options so there is some time to wait for a possible 10% stock move from current levels but the risk/ reward just isn’t there for me to make this trade an official recommendation.

A triple-digit return would occur if shares surge above $670 or tank below $500 by mid-August.

As far as the market, futures were showing a weaker open throughout the night and leading into the opening bell and that is how the action has played out to start the week.

The Dow is down 73 points to 17,026 while the S&P 500 is lower by 8 points to 1,970.  The Nasdaq is declining 16 points to 4,416 and the Russell 2000 is off 8 points to 1,143.  The VIX is at 13.02, up 0.96, or 8%.

Subscribers, check the Members Area for the updates.  I could have a Weekly Wrap update later this afternoon, or tomorrow, and a possible New Trade for the Daily.  Stay locked-and-loaded into the close in case I take action.

Get Ready for a Wild Week

Monday, July 21st, 2014 Morning Update for 7/21/14

Get Ready for a Wild Week 

9:00am (EST)


The market rebounded on Friday following Thursday’s steep pullback to end the week on a positive note.  The gains were enough to give the bulls the weekly win but the small-caps struggled as volatility has been elevated given the geopolitical events from around the world.

This week promises to be just as exciting with the opening of the flood gates for 2Q earnings.  There are a number of heavy-hitters reporting and I have talked about the possibility of a new trend forming in the back end of July and into August.

While the bears made some noise, it remains to be seen if their clues were a buying opportunity or the real deal of more serious things to come.  (read more…)


Bulls Rebound/ VIX Drops

Friday, July 18th, 2014 Midday Update for 7/18/2014

 Bulls Rebound/ VIX Drops

1:10pm (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!

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    Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help. STEVE T.

    Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide. SCOTT H.

    Rick & Team, GREAT Call on NKE for my two trading accounts:
    1) Entry at .65, out at 1.45, 1.55 Profit = $415
    2) Entry at .60, out at 1.75, 1.50 Profit = $485 PETER G.

    Hey Rick! Here is an update on what your picks have done in my accounts.

    1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

    2) Also booked profits on your Berk Feb 74 (80%) and threw a major chunk of change at the March 75’s (190+%). I would have never known that Buffet's stock had split if it weren’t for your service. Bought the shares also for the long haul. Won’t look at them for another 20 years. Great job on getting us in before the indexes did.

    3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

    I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming. LAWRENCE O.

    Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again! C.J.

    Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace! SHAUN

    I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good profitable calls. Keep up the good work. MICHAEL K.

    Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!
    PARAG P.

    Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN. JAY P.

    Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You. MIKE

    Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks. TRISH D.

    Hi there, I have joined recently, and I am very happy to tell you that I am up over $10,000 on your picks in a month. I started on 10/7 with the Intel pick. I'll be your member for life. Please don't quit on us. Also, I am learning a lot about options. I didn’t get in your recent APOL and that gold trade and only had one loss on CHK. I appreciate all the DD you do. I enjoy your market commentaries. Best advice site period, and I have tried a few here and there. Again, you guys rock! MIN L.

    Thanks be to Momentum Options Trading for providing me with some fantastic wins. I just started with this service and am up nearly 50% in less than a month. There have been losses, but if I manage them properly, I will continue the best efforts given on the blog (in which there are no complaints). What a great cause for humanity. I feel more confident about my trades and continue to play the wins. Best of all, I am now keeping my regular paychecks in the bank! Thank you! JOE G.

    Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming. GREG F.

    I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade. NOEL

    Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today. TODD F.

    What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you! PAUL H.

    “Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ” NOEL

    “Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.” CHRISTIAN

    “I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.” JOHN

    “I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.” CHARLES M.

    “I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.” BRYAN C.

    “I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.” JOHN H.

    “Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.” JEFFREY

    “I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.” ED

    “Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.” GREG

    “Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.” KEN

    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.” GARETT

    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.” TERENCE

    Jan. 31 2012
    Rick, new member...Studied all current trades, did some chart work,picked ZNGA, PEP, MGM...Sold on Feb. 2 for $3600.00 profit...Cost for 1-year membership to your newsletter was less than $1000.00..All I have to say..Thank you. John H –

    Rick, I purchased 10 contracts of the Nike March 85 puts Thursday afternoon for $2.00. Thing is, I was upset because the puts went down to $1.60 or so before the market closed. Well, needless to say Nike didn’t impress Wall Street and when I turned on the computer this morning the puts were worth $7.10! Sold them for a $5,100 profit!. Thanks again, you are the MAN. Chuck J-

    Hi Rick,

    I will start off with a thank you for your time and dedication to all
    the research you and your team commit yourself to. This is not me just being excited about the profits I have accumulated aka (bank) ! You have helped me get back to the passion I had of researching stocks/options. Keith N-

    Hi Rick,

    I want to share my great results on GMCR. Based on your comments on February 15th, I bought 20 options at $0.28. They closed today at $7.00, which is a 2,300% gain. My $560 dollars turned into $14,000 in less than a month. In decades of trading, this is my single best trade ever. Thank you! By the way, the Dow was down 228 points today and I could care less. What a great trade. It proves the amazing power of options. I am so grateful for your service, which calls it straight all the time, your options trading manual, and most of all, your amazing skill
    at finding winning trades. I have attached a copy of the trade from
    my brokerage screen.

    Hi Rick,

    Wow!! my account it up 70% since i joined last month and market is going the opposite direction. Really appreciate your service. I just wanted to drop a note to say THANK YOU. Hope to be with you guys for a very long time. Mel


    Great call on Fosl I bought the may 120 puts for 3.70 yesterday morning just sold for $32.00 today
    Keep up the great work
    Thank you, Henri

    Rick –

    I bought 10 Deckers Outdoor (DECK) May 55 puts at $0.50 on 4/26/12 and sold them on 4/27/12 for $1.65. I made $1150 in one day. Thanks. I knew something good would happen sooner or later.
    HOW THE HECK did you know Green Mountain Coffee (GMCR) was going to go down 20 points???!!!! I bought 10 of the May 35 puts at $0.49 and then 5 more at .30. I sold them at 5.80. Thank you again.
    You have made a believer out of me. Alan

    Rick –
    I have only been a member for about 6 weeks but I have done well on most of the trades. My first two were QQQ and SPY a month ago and since then I've gotten into the groove and been doing well.
    I try to execute the trades that you recommend as soon as you send them out, sometimes I can't and I miss the Entry price. However, sometimes when I miss the Entry, the price goes down and I get a better price.
    That's exactly what happened with GMCR.
    You recommended it at around $.81 I think, but by the time I got to it, the price was $.27. I bought 100 Puts on Wednesday May 2, 2012 and sold half of them 24 hours later at $5.95 for a nice 2,203% gain. As per your recommendation, as GMCR went above $30 I sold the remaining 50 Puts at $5.50 for a slightly less 2,037% gain.
    On average that one trade netted me a 2,120% gain, entirely based on YOUR recommendation (and a little bit of luck). To put this in real terms, I risked $2,700 on Wednesday and pocketed $54,550 just 24 hours later.
    So uhh, let's do that again real soon!!
    Feel free to use my name. The tax guys have me on speed-dial already anyway. Dennis

    That was awesome on your GMCR pick, I know how risky it can been holding into earnings but you pulled it off. 
    I just started my autotrading with you today and am in on your QQQ play. I look forward this service. 
    I have a busy career and I have tried to follow and trade throughout the day and found it too hard. I hope you continue to have a great year, I plan to go along for the ride. I am starting slow but will pile more in once I have secured some profits. 
    Keep up the good work your trading has been spot on. I am sure you paid your dues to get this point in your career. Anthony


    Great call on GMCR!  I have been trading for about 15 years actively.  This may be the best trade I ever made.  Got in on Monday, April 30 and the stock was up from when you recommended it.  It went up further after I got in.  Here are the facts:
    Monday, April 30th: Bought 15 June 37's at $1.25= $1900 approx
    Thursday, May 3rd: Sold 15 June 37's at $9.30=$13,950
    Gain for the week: $12,050.
    I understand you will not get them all right.  It’s important to ride those winners and as you could tell from my selling price, I sold when the stock went to $28.10, so left a little on the table.  Who can complain.
    Keep the suggestions coming, looking for another jump on your FSLR, one that I have been riding very hard.
    Best regards, Bob

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