Optioneering Newsletter

May 29, 2016

The Dow Weekly

We have been reviewing the Mini Dow futures chart for reference regarding
the market trend. We’re looking at the Mini Dow chart because the Mini
Dow was the first major index related chart to post a daily close over last
year’s high and reaffirm the long-term bull trend. Reaffirming the bull trend
and reaching a new all-time high are both bullish signs. One old trading
adage says to buy dips in a bull market when there are signs that the
 pullback is over and the uptrend is resuming. This week’s trading suggests
that a higher low bottom is in place in the Mini Dow along most of the major
indices. A higher low bottom in a bull trend is an excellent buying
opportunity.

The first profit opportunity we will review this week is in CVX, or Chevron.
Chevron is American multinational energy corporation with operations and
retail outlets on five continents and 180 countries.

CVX Weekly

The weekly chart shows that the trend in CVX has been up since last
August.
 CVX Daily

The daily chart shows that CVX has been very bullish since this year’s low.
It’s been going sideways for about a month. Sideways trading in a bull
trend usually yields to a further advance.

We are going to review a Call Debit Spread for CVX.

Traders who want a more leveraged approach could consider buying CVX
calls. CVX has options expiring every week until July 15th. After that, CVX
has options expiring in August, September, December, January 2017, and
January 2018.
 Buy to Open CVX August 19th expiration 85-strike Call
Sell to Open CVX August 19th expiration 100-strike Call

We can see from the Call Option Spread Analysis Calculator that if the
CVX stock price stays where it is or increases at all when the options
expire, the spread will make a 24.5% or $295 profit. If the CVX stock price
declines by -2.5% when the options expire, the spread will have a profit of
20.1% or $242. If CVX is down -5% when the options expire, the spread
will lose -1.1% or -$13. If the CVX stock price is down -7.5% when the
options expire, the spread will lose -22.3% or -$268.

The next profit opportunity we will review is in WBMD, or WebMD Health

Corp. WebMD is a health information services website that publishes
content regarding health and health care topics, including a symptom
checklist, pharmacy information, drugs information, blogs of physicians with
specific topics, and providing a place to store personal medical information.
During 2015, WebMD’s network of websites reached more unique visitors
each month than any other leading private or government healthcare
website, making it the leading health publisher in the United States

WBMD Monthly

The monthly chart shows that WBMD has been in an uptrend since 2012.
The bull move has been very strong since last summer.
 WBMD Daily

The daily chart shows that WBMD has been in a steady uptrend since the
February low.

We are going to review a Call Debit Spread for WBMD.

Traders who want a more leveraged approach could consider buying

WBMD calls. WBMD has options expiring in June, July, September, and
December.
 Buy to Open WBMD July 15th expiration 55-strike Call
Sell to Open WBMD July 15th expiration 65-strike Call

We can see from the Call Option Spread Analysis Calculator that if the
WBMD stock price stays where it is or increases at all when the options
expire, the spread will make a 39.9% or $285 profit. If the WBMD stock
price declines by -2.5% when the options expire, the spread will have a
profit of 21.5% or $154. If WBMD is down -5% when the options expire, the
spread will lose -1.3% or -$10. If the WBMD stock price is down -7.5%
when the options expire, the spread will lose -24.2% or -$173.

The next profit opportunity we will consider is AMZN, or Amazon.

Amazon is the largest Internet-based retailer in the United States. Like
Walmart, it sells almost everything, but you buy it on the internet and it is
shipped to you. Amazon also produces consumer electronics—notably,
Amazon Kindle e-book readers, Fire tablets, Fire TV and Fire Phone, and it
is the world's largest provider of cloud infrastructure services. Amazon has
separate retail websites for United States, United Kingdom & Ireland,
France, Canada, Germany, Italy, Spain, the Netherlands, Australia, Brazil,
Japan, China, India and Mexico. In 2015 Amazon surpassed Walmart as
the most valuable retailer in the United States by market capitalization.

AMZN Monthly

The monthly chart shows that AMZN has been in a strong bull trend since
the chart started in 2009.
 AMZN Daily

The daily chart shows that AMZN has been extremely strong since the
February low. When we enter bullish positions, we want to be long the
strongest stocks. Amazon could be the strongest of all.

We are going to review a Call Debit Spread for AMZN.

Traders who want a more leveraged approach could consider buying

AMZN calls. AMZN has options expiring every week until July 15th. After
that, AMZN has options expiring later in August, October, January 2017,
and January 2018.
 Buy to Open AMZN August 19th expiration 630-strike Call
Sell to Open AMZN August 19th expiration 660-strike Call

We can see from the Call Option Spread Analysis Calculator that if the
AMZN stock price declines by -5%, stays where it is, or increases at all
when the options expire, the spread will make a 33.3%, or $750 profit. If the
AMZN price is down -7.5% when the options expire, the spread will make
28.1%, or $632.

The last profit opportunity we will consider is in CURE. CURE is the

Direxion Health Care Bull 3X Shares ETF. CURE seeks to yield results that
correspond to three times the daily performance of the S&P Health Care
Select ETF.
 CURE Weekly

A glance at the monthly chart will show you that CURE was in a strong bull
trend until the August decline. Trading since then suggests that the
correction is over and the uptrend is resuming. A second higher low bottom
appears to be in place at this month’s low. If the next rally is as big as the
rally from the February low, the upside target will be above 37.
 CURE Daily

The daily chart shows that CURE has been bullish since the February low.
The daily chart also has a bullish pattern of higher highs and higher lows. It
looks like it’s just beginning the third leg of the advance.

CURE is a leveraged ETF. While leveraged ETFs contain more risk, they
usually possess higher premiums as a result. We suggest taking advantage
of the high premiums offered by initiating option debit spreads.

Traders who want a more leveraged approach could consider buying

CURE calls. CURE has options expiring in June, July, August, and
November.
 Buy to Open CURE August 19th expiration 21-strike Call
Sell to Open CURE August 19th expiration 31-strike Call

We can see from the Call Option Spread Analysis Calculator that if the
CURE ETF price increases by 2.5% or more when the options expire, the
spread will make a 26.6% or $210 profit. If the CURE price at option
expiration is the same as it is now, the position will make 25.6% or $202. If
the CURE price declines by -2.5% when the options expire, the spread will
have a profit of 15.8% or $125. If CURE is down -5% when the options
expire, the spread will make 6% or $47. If the CURE stock price is down
-7.5% when the options expire, the spread will lose -3.8% or -$30.

Note: Profit performance displayed in this newsletter does not include

transaction costs.

This newsletter includes some trading ideas following Chuck Hughes’ trading
strategies along with educational information. For a complete listing of Chuck’s
exact trades, including specific entries and exits and real time Portfolio tracking,
please call Brad at 1- 866-661-5664 or 310-647-5664