The market is down halfway through the session and Bernanke is on deck and should be speaking any minute now.

The Dow is down 324 points to 8,987.

It’s frustrating to see the market down for those who are bullish but be patient. The sledding will be choppy but until the Dow and Nasdaq get on a mini winning streak, it’s going to remain that way.

Google (GOOG, $347.71, down $15.00) will be announcing earnings after the close on Thursday. I’m telling you, this one could get interesting. Google’s 52-week low is $310, its high - $747. For a possible strangle earnings trade on Google look at these options.

The October 400 calls (GOPJT, $5.10, down $2.90) and the October 290 puts (GGDVR, $3.40, up $1.15). Together, they would cost $8.50. A 60 point move in Google could give you an 8%-10% gain for a two-day trade.

Have a Coke and a smile brother. Coca-Cola (KO, $45.73, up $2.00) announced a 15% jump in earnings and is eating PepsiCo’s (PEP, $53.51, down $0.89) lunch.

Bernanke just hit the podium and we have headed lower. The Dow is now down over 400 points. He looks nervous.

Good to see Apple (AAPL, $104.28, up $0.19) above $100 again. The November 120 calls (QAAKD, $6.05, down $0.05) should be bought two-to-one against the Novemebr 80 puts (QAAWP, $3.90, up $0.20) if you bullish. Vice-versa if you are bearish.

Chipotle Mexican Grill (CMG, $41.63, down $3.92) has made another 52-week low. Earnings are due out on October 22. Regular readers of the blog know all about this stock first hand. It’s been our own personal ATM over the past year. Numerous negative analyst reports have popped up this week on the restaurant sector which has pushed Chipotle down to ridiculously cheap levels as some would like to think. That may be so, but if they miss earnings, then we could see Chipotle in the low $30’s.

The October 45 puts (CJYVI, $4.40, up $2.25) are getting some love and have doubled this morning. Sometimes it pays to get out of bed early. They opened at $2.15.

Chipotle could still have some more downside risk but if they do miss earnings, the stock may be too cheap to pass up if it get in the $20’s.

Rick Rouse
Rick@OptionsMentoring.com

After spending the morning in positive territory, the market faded yesterday as oil climbed to a new high of $144 a barrel on supply concerns and the tension brewing in the Middle East. News that Israel or the United States could possibly attack Iran had the market walking on eggshells. Iran is the world’s 4th biggest oil producer and is OPEC’s 2nd largest exporter. Turmoil in the Middle East is always a market mover and yesterday was no different.

Also weighing on the market was General Motors (GM, $9.98, down $1.77). On Monday I said there was a good chance GM falls below $10 and that has now happened. After a brief scare, the July 10 puts (GMSB, $1.10, up $0.72) exploded for a 190% gain yesterday. These puts have nearly doubled so protect your positions accordingly.

Merrill Lynch (MER, $31.15, down $1.10) dropped another 40 cents after yesterday’s blog update and the July 32.50 puts (MERSA, $2.86, up $0.61) are up 33% from an entry price of $2.15.

The FedEx (FDX, $74.70, down $1.67) July 80 puts (FDXSP, $5.60, up $1.00) are up 250% from an entry price of $1.59. Some of you may have set stops in the $4.50 range but raise it up to $5.00-$5.25 if you are still in the position.

Another stock on the verge of a MAJOR breakdown is Chipotle Mexican Grill (CMG, $80.05, down $1.60). The stock is no stranger to the blog as I have covered it numerous times in the past. It’s a stock that I have felt has been way overvalued for quite some time even when the market was doing well. However, Chipotle lost $7 on Monday and hit a low of $79 on Tuesday. From where I sit, it looks like this one could fall to the low $70’s. The company reports earnings on July 23. The July 75 puts (CMGSO, $1.65, up $0.20) have already tripled since Monday but they may have more room to run. If they are still under the $2.00 level after the market opens, they may be good for a quick trade up to $3.00 if Chipotle continues lower. The options expire before Chipotle announces earnings so we shouldn’t get much upside volatility with the stock in a downtrend.

And finally, I mentioned the Nokia (NOK, $23.67, down $0.54) July 20 puts (NAYSD, $0.20, unchanged) which are 15% out-of-the-money based on the stock price. They may still be a reach but the July 22.50 puts (NAYSX, $0.70, up $0.15) were up 27%.

Futures are pointing towards a higher opening this morning despite a weak payroll and unemployment report. The market is closing at 1:00PM EST today and will be closed for July 4.

Rick Rouse
Rick@OptionsMentoring.com

Yahoo (YHOO, $28.54, down$0.01) posted better-than-expected earnings last night but the numbers fell short in what investors were hoping would be a blowout quarter. The company reported 1Q profits of $542 million, or $0.37 a share. The earnings were only a couple of pennies higher than what Wall Street had forecast and put any chance of Microsoft (MSFT, $30.25, down $0.17) raising its bid at slim and none. That was the case anyway as Microsoft had already said before Yahoo’s earnings release, regardless of the numbers, that it would not raise it bid.

Yahoo said it was still talking with both News Corp (NWS, $18.50, down $0.44) and Time Warner (TWX, $14.64, down $0.31) but Microsoft is their best deal going and the deadline is Saturday for Yahoo to accept. This should get interesting but I seriously doubt Microsoft raises its offer. In after-hours trading last night, Yahoo was down 15 cents while Microsoft was up 21 cents. No matter what happens, the big winner here is Google (GOOG, $550.00, up $17.21). Even if Microsoft is successful in acquiring Yahoo it will take 12-18 months for both companies to integrate and by then Google will have only gotten stronger. BTW, the May 500 calls (GOPEO, $60.80, up $16.40) were at $7.00 last Thursday.

Chipotle Mexican Grill (CMG, $113.15, down $5.13) fell another two bucks after I talked about what McDonald’s (MCD, $58.35, down $0.32) earnings could mean for Chipotle. The May 105 puts (CMGQA, $4.50, up $1.30) were active yesterday.

Intrepid Potash (IPI, $50.40, up $18.40) zoomed nearly 58% in its first day of trading. The stock opened at $65.00. This brings me to a point about IPO’s. Even though our focus is on options, if you`re try to buy an IPO on its first day of trading…Don`t place a pre-opening “market order”. Some people probably did yesterday morning and were filled at the open at $65. They are looking at nearly a 25% loss. Intrepid seems too “hot” right now not to trade higher and yesterday’s call of a 50% gain was on point. The stock is not “optionable” right now meaning you can’t buy calls or puts. Probably in 30 days options will begin to trade. Of course, all of this did indeed mean good news for Potash (POT, $214.83, up $6.04). The stock is on F-I-R-E!!! The May 200 calls (PYPEX, $24.70, up $3.80) were profiled a little over a week ago at $6.40 and are now up three-fold. Nice.

Oh yeah. Airline stocks got hit hard…again. You can’t say I didn’t warn you: AMR Corp (AMR, $7.02, down $1.18), Delta (DAL,$6.80, down $1.40) and Northwest (NWA, $7.47, down $1.59) all fell 15%-17%. In less than two weeks AMR has dropped from $9.48 to $7.02, Delta was at $10.01 and now sits at $6.80 and Northwest from $10.96 to $7.47. Folks, that’s a 30% fall from grace and the scary thing for the Airline sector is it may not be over.

As you can see, some stocks are doing rather well despite economic pressures while others are folding like a cheap lawn-chair. Our option mentoring program will show you how you don’t care if a stock goes up or down - it’s a Non-Directional trade! In fact, you’ll still make money if the stock moves up 20% or down 20% from where you entered. If you would like to learn more about these strategies then take advantage of our free Monthly Cash Flow Video DVD Seminar by clicking here.

Rick Rouse
Rick@OptionsMentoring.com