Option Investor
Newsletter

Daily Newsletter, Tuesday, 11/30/2010

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Forecast Cloudy, Storms Ahead

by Jim Brown

Click here to email Jim Brown
Despite the improving economics the market seems destined to pursue a downward trend. Repeated rebounds have been sold and the pattern of lower highs is becoming disturbing.

Market Statistics

The better than expected economics were not able to push the indexes into positive territory to close the month. Good news was overshadowing the European debt crisis, Korean hostilities and China's tightening bias but that news could not resurrect our markets.

The ISM Chicago was significantly better than expected with a headline number of 62.5 for November. Estimates were for a slight gain to 60.6 from October's 60.0 reading. This is a new seven-month high for the Chicago ISM and has completely erased the August plunge.

The New Orders component rose to 67.5 and the highest level in more than three years. More importantly inventories fell more than 5 points from 54.9 to 48.6. Falling inventories means more orders in the future. The employment component rose by nearly two points to 54.6.

This was a very positive report and suggests auto sales likely improved significantly and resulted in a boost to the Chicago area manufacturing sector. This report is clear evidence of an accelerating economy and probably means the national ISM on Wednesday could also be better than expected. The national ISM is expected to decline by -1.1 points to 55.9 for November.

Chicago ISM Chart

The NY ISM rose from 477.9 to 485.7 for the biggest gain in the last five months. The current conditions component rose to 65.6 and the highest level since June. The six-month outlook rose to 71.9 and the highest level since May. The pace of recovery in the New York area appears to be improving at a faster pace then the rest of the country. The services sector is improving rapidly. New York was severely beaten down during the financial recession and it should outperform on the rebound. The housing sector in the NY area has improved significantly with sales in some areas almost doubling compared to a year ago.

Consumer Confidence also spiked higher from 50.2 to 54.1 and the highest level since June. The expectations component led the gain with a spike to 74.2 from 67.5 while the current conditions component barely budged to 24 from 23.5.

The number of consumers who thought the stock market was going higher over the next twelve months rose to the highest since January. This should be a positive point that should boost consumer spending this holiday season. Consumers who thought jobs were plentiful rose from 3.5% to 4.0%. That is actually a big jump and emphasizes the sudden improvement in outlook.

On the negative side the number of consumers planning on buying a home fell to 1.7% matching the low from last December and the prior low in September 1982. Home sales are definitely in the tank until spring.

As you can see on the chart below the confidence numbers have been moving sideways for more than a year and even though November's gains were strong they were unable to break out of that range. It may take a couple more months to see confidence move over 60 again.

Consumer Confidence Chart

Despite today's heavy schedule the calendar for the rest of the week is even busier. Key reports for Wednesday are the ADP Employment for an updated estimate of Friday's Non-Farm Payroll report, the national ISM and the Fed Beige Book.

Economic Calendar

November ended in a slump with the major averages well off their highs for the month. The markets tried to rally this afternoon but news broke late in the day that killed the rally effort. S&P warned it may cut Portugal's credit ratings on concerns the government has made little progress on boosting economic growth. This is just one more domino to drop and suggests many European countries will also be faced with further downgrades as their latest austerity plans are found lacking.

Consider how optimistic investors were coming into November with the market highs two days after the election appearing to celebrate the results and the formal announcement of QE2. That blow off spike capped two months of gains and it was all downhill from there.

The QE2 rally has stalled because of the continuing events in the Eurozone. Greece popped back up, then Ireland, now Portugal and soon Spain. Those events reversed the dollar's drop and forced those short the dollar and long equities and commodities to exit the trades. Everyone had backed up the truck in anticipation of QE2 removing support from the dollar and making equities the place to be for the winter.

Until the Portugal/Spain problem is solved the dollar is likely to hold its gains although the chart is facing some technical hurdles like the 200-day average. It remains to be seen if the technicals matter in the face of daily news events.

Dollar Index Chart

If there is any doubt the dollar and the markets are inversely correlated just look at the chart below. The blue line is the S&P and the black line the Dollar Index. As the dollar declined in September and October the S&P rallied strongly. Ben Bernanke telegraphed the coming of QE2 on August 27th. Note where the dollar began to decline and the S&P rise.

Given the strength of the dollar gains over the last three weeks I am surprised the markets have not sold off any more.

Dollar Index vs S&P-500

The markets are locked in a battle today between better economic numbers and worries about further contagion in the Eurozone. I have every confidence if the European debt crisis had not flared up again we would be much higher today. It is their problems impacting our dollar and forcing the market weakness. Unfortunately I don't see that changing over the next couple weeks. We still have the Portugal/Spain story to play out and that could take weeks or even months.

We may have a slight reprieve this week with those major reports on tap. If the ISM, Beige Book and Payrolls are much better than expected there is a possibility the European mess will find its way to the back burner. However, stronger economics means a stronger dollar so it is a catch 22 for the markets. Can we have a stronger market and a stronger dollar? It is possible and it has happened before but we may be too soon in the recovery with far too many geopolitical events in progress to see happen again this time.

The bullishness has not left the market but I think traders are growing tired of seeing every rebound stop short of the prior day's highs and every decline coming closer to piercing critical support at S&P 1175. The charts are not bullish and this is a period on the calendar when it should be bullish.

As one reader put it to me today, "we seem to be crawling along the bottom." I am going to add to that and say, "We seem to be crawling across the floor in an increasingly smoke filled room and hoping to find an exit."

The Dow has broken though support at 11,000 twice this week and each rebound was weaker than the prior rebound. Today's close on 11,000 is an ominous warning. The S&P has touched critical support at 1175 three times in the last two weeks and two of those were this week.

S&P-500 Chart

We can no longer use low volume as an excuse to discount the market moves. Volume today was 8.6 billion shares and the largest volume in two weeks. The last high volume day was the 9.5 billion share day on Nov-16th when 8.5 billion shares were down volume. That was the day that knocked the indexes down to their current range. We have fallen and we can't get up.

I would like to think that the improving economics would trump the geopolitical events but I am running out of patience. The bad news bulls have disappeared and the good news bulls can't find any traction. We need a wall of worry to climb but it needs to be U.S. worries not EU worries.

The bright spot in the market remains the Russell. The Russell gained +3.2% in November with the rest of the indexes finishing in the red for the month. The declines in the Russell this week have been muted and it is only about ten points from its recent highs. The Russell is the sentiment indicator for the market. If fund managers are buying or holding small caps they are positive about the market's future.

My question today is can they persevere? Do those managers have enough guts to wait out December in hopes of a Santa Claus rally?

December is normally kind to the markets with an average gain of +1.79% on the S&P. The S&P has risen 16 of the last 20 years in Q4. I expected that to grow to 17 of 21 but I am beginning to worry.

I expected the improving economics and QE2 program to push us significantly higher by year-end. That is looking less likely and I am afraid fund managers are also worried. Funds should have a lot of winners built up from the Feb-April rally and the Sept-Oct rally. If they thought for a minute the markets were going to fail they would be bailing in droves to protect their gains and their bonuses. They have no incentive to take one for the team and watch their profits evaporate while they are waiting for the situation in Europe to improve.

The last unknown in this puzzle is the November month end. November is not known for major month end portfolio shuffling by funds so there is really nothing to blame for the repeated declines other than event confusion. They could come roaring back on Wednesday and power us higher but I am not betting on that scenario.

I am worried critical support is about to break. I have been recommending buying the dips to 1175 and reversing to shorts under that level. It appears we may get a chance to play the short side "IF" Wednesday's economics are not strong enough to change the current declining market sentiment. Anything that can happen the rest of this week is likely to push the dollar higher unless the economics suddenly take a turn for the worst.

I am sure there are a ton of shorts tonight so there is always the potential for another short squeeze but I would probably see any failure under 1200 as an opportunity to get short at a higher level. The bullish sentiment as evidenced by multiple surveys is at the high for the year and the market is declining. That is a pretty good contrarian indicator. Until we move over S&P 1200 the market remains at risk. The more lower highs we see the higher the risk of a critical breakdown. I would be cautious in the days ahead. The tide could turn but we will have plenty of time to increase our bullish posture once the S&P moves over 1200. Until then the bears may be coming out for one more feeding frenzy before turning in for their winter nap.

On a more positive note, if I am ready to turn bearish then we are obviously at a capitulation point and there is undoubtedly a rally in our immediate future.

Dow Chart

The Nasdaq stopped right on critical support at 2500 but techs were the weakest link today. Over the last 20 years the Nasdaq has posted gains in December only 12 times compared to 16 for the S&P. On years when they do post gains they are normally strong with an average of +2.67%. On years when they decline they do that spectacularly as well. A break under 2500 targets 2470 then 2400.

Nasdaq Chart

The two most bullish charts are the Russell and the Dow Transports. These are in rally mode, or at least holding their gains because of the improving economics. Small caps typically don't receive much of their income from overseas so the dollar's strength does not really hurt them. Transports are gaining because of the rebound in the business cycle. The combination of the two charts may not be enough to rescue the broader market but it does give us a place to look for relative strength investments on any future decline.

Russell Chart

Dow Transports Chart

In summary I think we need to be concerned about a break of critical support levels and the impact on the rest of December. A break of critical support could trigger an even larger amount of selling as fund managers protect their bonuses. Very high profile economic reports this week could improve sentiment but the European mess will continue to be an overall drag. Be cautious and protect your profits.

Jim Brown

Register for my OilSlick.com newsletter and receive free daily updates and commentary on the energy sector. Register here


New Option Plays

Sit Back

by James Brown

Click here to email James Brown

Editor's Note:

Traders continue to buy the dips but the bounces are getting weaker. The current short-term trend of lower highs looks like it could finally bear fruit and spark another leg lower. Even if the S&P 500 does break support in the 1180-1175 zone the 1150 level should be strong support and I would consider a dip to 1150 another bullish entry point.

I added two new plays last night. I'm suggesting we sit back and watch tomorrow. A few stocks that caught my eye were: SRCL, CLW, MICC, GS. SRCL continues to show relative strength. CLW looks ready for a significant breakdown under support near $80. MICC has broken its long-term up trend. I'm watching GS for a dip toward support in the $152-150 zone.

- James


In Play Updates and Reviews

Bulls Spooked By Europe

by James Brown

Click here to email James Brown

Editor's Note:

Ongoing fears of a European default spooked the bulls this morning. Stocks traded off their lows but the bounce wasn't as convincing as Monday's. We saw CAT hit our first target today. I'm also suggesting readers take some profits in COST.

-James

Current Portfolio:


CALL Play Updates

Caterpillar - CAT - close: 84.60 change: +0.93

Stop Loss: 79.90
Target(s): 84.85, 89.50
Current Option Gain/Loss: +24.2% & +48.7%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/30 update: Target achieved. CAT ignored the market's weakness and rallied from session lows to close near its highs with a +1.1% gain. Volume is improving and shares look poised to hit new 52-week highs tomorrow. CAT hit an intraday high of $84.92. Our primary target to take profits was hit at $84.85. We wanted to sell most (or all) of our December call options at this level. The high today for the December $85 call was $1.92. The call was trading near $1.85 at our target price.

I remain bullish on CAT. If you do launch new positions I would buy January calls. I would prefer to initiate new positions on dips in the $82.75-82.00 zone.

Earlier Comments
Our first target is $84.85. We want to exit the majority of our position here. We'll set a secondary target at $89.50 but again I warn you the $85 level should be tough resistance.

Current Position:
Long the December $85 calls (symbol: CAT1018L85)
Entry @ $1.40

Double Down
New Position: Buy the December $85 calls (CAT1018L85), current ask $1.17

11/30 Target hit @ 84.85. Option @ $1.85 (+32.1% and +58.1%)

Entry on November 9th at $ 81.75
Earnings Date 01/27/11
Average Daily Volume = 7.7 million
Listed on November 6th, 2010


CH Robinson Worldwide Inc. - CHRW - close: 73.71 change: +0.19

Stop Loss: 70.75
Target(s): 74.90, 79.00
Current Option Gain/Loss: +22.2%, and +26.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/30 update: CHRW quickly recovered from its morning lows but after rising above $74.00 this afternoon, the stock began to trim its gains. I don't see any changes from my previous comments. I would still consider new positions on dips in the $73-72 zone.

Previous Comments:
When CHRW hits $74.90 we'll exit all of our December calls. We also want to sell part of our January calls at $74.90 but keep a position open for our secondary $79 target.

Current Position:
Long the December $75.00 calls (CHRW1018L75) Entry @ $0.45

- or -

Current Position:
Long the January $75.00 calls (CHRW1122A75) Entry @ $1.15

11/27: New stop @ 70.75, new first target at $74.90

Entry on November 22nd at $72.44
Earnings Date 02/03/11
Average Daily Volume = 1.1 million
Listed on November 18th, 2010


Cliffs Natural Resources - CLF - close: 68.34 change: -0.64

Stop Loss: 64.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: -19.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/30 update: Uh-oh! CLF temporarily broke out above its bearish trendline of lower highs and then rolled over again. Is this a new bearish reversal? I think we need to see some confirmation first. Even if CLF does pull back the stock should still see some support near $66-65. Wait for the dip or bounce above $65 before considering new positions. Our first target is $71.50.

Keep in mind that December options expire in three weeks!

Current Position:
Long the 2010 December $70.00 CALL, Entry @ $2.42

Entry on November 12th @ 67.00
Earnings Date 02/17/11
Average Daily Volume = 4.3 million
Listed on November 1, 2010


Costco Wholesale - COST - close: 67.61 change: +0.64

Stop Loss: 63.90
Target(s): 69.50
Current Option Gain/Loss: +106.6%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/30 update: We should take profits early! Go ahead and take some money off the table and sell part (at least half) of our December $65 call position. The call closed with a bid of $3.10 today.

COST was showing some relative strength today. The stock quickly rallied off its morning gap lower and shares traded near its highs under $68.00. There are no changes from my earlier comments on COST. I'm not suggesting new positions at this time but another rebound in the $65 zone might change my mind on new entries. Our target to exit is $69.50. Keep in mind that December options expire in three weeks.

I also want to remind readers that COST is due to report earnings on December 9th and cautious traders do not want to hold over this event.

Earlier Comments
We want to keep our position size small to limit our risk.

Current Position:
December $65.00 calls (symbol: COST1018L65)
Option Entry @ $1.50
11/30/10 Take Profits Early, Sell half. Option @ $3.10 (+106%)

Entry on November 8th at $64.50
Earnings Date 12/09/10
Average Daily Volume = 3.4 million
Listed on November 6th, 2010


CSX Corp. - CSX - close: 60.81 change: -0.97

Stop Loss: 59.49
Target(s): 64.25, 67.25
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
11/30 update: So far so good. CSX was drifting lower on Tuesday. Odds favor a pull back toward support near $60.00. I'm suggesting we buy calls at $60.25.

Trigger to buy-the-dip @ $60.25

Suggested Position: Buy the 2011 January $60 calls (CSX1122A60)

Entry on November xxth at $ xx.xx
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 5.9 million
Listed on November 23rd, 2010


CenturyLink, Inc. - CTL - close: 42.99 change: +0.09

Stop Loss: 41.45
Target(s): 44.90, 47.25
Current Option Gain/Loss: -25.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
11/30 update: CTL continues to look strong and rallied toward resistance near $43.00 on Tuesday. If the market cooperates we can expect CTL to breakout soon. More conservative traders may want to wait for CTL to close over $43.00 before considering new positions.

CTL issued a press release this afternoon discussing the new regional structure and management to take effect once its merger with Qwest is completed in the first half of 2011.

FYI: Investors should know that CTL is currently involved with a $10.6 billion stock-swap merger with Qwest Communications (Q). The merger isn't supposed to be completed until the first half of 2011. The trend for both stocks is up and naturally looks very similar following the M&A announcement.

Current Position:
Long the 2011 January $45.00 calls (CTL1122A45) Entry @ 0.20

Entry on November 29th at $42x55
Earnings Date 02/22/11
Average Daily Volume = 3.0 million
Listed on November 27th, 2010


Express Scripts - ESRX - close: 52.0980 change: -0.71

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: -15.5%, and - 4.7%
Time Frame: 5 to 6 weeks
New Positions: Yes, wait for a dip

Comments:
11/30 update: The morning rebound attempt in ESRX failed and shares look headed lower. I would watch for support near the 40-dma or the $51.00-50.00 zone. Our first target to take profits is at $53.95. I'm setting a secondary target at $57.25.

We currently only have half a position open.

Don't forget - December options expire in less than three weeks.

Current Position:
Long the 2010 December $52.50 calls (ESRX1018L52.5) Entry @ $1.22
- or -
Current Position:
Long the 2011 January $52.50 calls (ESRX1122A52.5) Entry @ $2.10

Entry on November 18th at $51.81
Earnings Date 02/24/11
Average Daily Volume = 4.3 million
Listed on November 17th, 2010


FedEx Corp. - FDX - close: 91.12 change: -0.47

Stop Loss: 87.75
Target(s): 94.75, 99.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/30 update: FDX spiked to a new six-month high and hit $93.03 before rolling over this afternoon. The stock looks headed for $90. I am suggesting readers buy calls on a dip at $90.25. More conservative traders could wait for a potential dip into the $89-88 zone instead. Our first target is $94.75. We will set a secondary, longer-term target at $99.00.

FYI: FDX is due to report earnings on Dec. 16th. Holding over earnings is risky. More conservative traders will want to exit ahead of the announcement.

Suggested Position: TRIGGER @ $90.25

Buy the 2011 January $90.00 call (FDX1122A90) current ask $4.85

- or

Buy the 2011 April $95 call (FDX1116D95) current ask $5.00

Entry on November xxth at $ xx.xx
Earnings Date 12/16/10 (confirmed)
Average Daily Volume = 2.1 million
Listed on November 29th, 2010


W.W. Grainger Inc. - GWW - close: 124.93 change: -0.13

Stop Loss: 122.95
Target(s): 129.90, 134.00
Current Option Gain/Loss: -28.0%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/30 update: GWW is still churning sideways. Traders bought the morning gap lower at $123.62 but GWW failed to hit new relative highs on the bounce. There is no change from my prior comments except I might hesitate on buying calls now. Wait for a rally past $126 or $127.

FYI: The stock could see a little short squeeze since the most recent data listed short interest at more than 5% of the 58.5 million share float (which isn't very big as far as floats go). FYI: The Point & Figure chart is bullish with a $140 target.

Current Position:
Long the 2011 January $130 calls (GWW1122A130) Entry @ $2.50

Entry on November 24th at $126.75
Earnings Date 01/25/11 (unconfirmed)
Average Daily Volume = 567 thousand
Listed on November 22nd, 2010


Humana Inc. - HUM - close: 56.04 change: -0.36

Stop Loss: 53.75
Target(s): 59.75, 64.00
Current Option Gain/Loss: -18.4%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/30 update: It was a quiet day for HUM. The stock traded in a 90-cent range. While HUM is holding at support near $55 and its 50-dma shares do have a bearish trend of lower highs. We can still buy calls now near support but more cautious traders may want to wait for a close over its 10-dma (near $57.00). I am suggesting we sell half of our position at $59.75 and then plan on selling the rest with a target at $64.00.

11/22/10 New stop @ 53.75
11/22/10 New (2nd) target at $64.00

Current Position:
Long the 2011 January $55 calls (HUM1122A55) Entry @ $3.80

Entry on November 18th at $55.05
Earnings Date 11/01/10 (confirmed)
Average Daily Volume = 2.1 million
Listed on October 16th, 2010


Nike Inc. - NKE - close: 86.13 change: +0.97

Stop Loss: 81.45
Target(s): 86.75, 89.50
Current Option Gain/Loss: + 81.7%, and +25.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
11/30 update: NKE is flexing its muscles once again. The stock displayed relative strength with a +1.1% gain as traders bought the dip near its rising 10-dma. Cautious traders may want to go ahead and sell their December calls here.

If you're looking for a new entry point wait for the next dip or bounce near $84.00. Our final target for the December position remains $89.50. December options have less than three weeks left. We will consider a higher target for the January calls.

Current Position:
Long the December $85.00 CALLS (symbol:NKE1018L85) Entry @ $1.15

- or -

(Second position)
Current Position:
Long the January $85.00 CALLS (symbol:NKE1122A85) Entry @ $2.78

11/30/10 Readers may want to exit December options early for a gain
11/30/10 Entry on January calls @ $2.78
11/29/10 Buy the bounce from $84.00
11/24/10 Target hit @ 86.75, option @ $2.60 (+126%)

Entry on November 11th at $83.00
Earnings Date 12/21/10
Average Daily Volume = 2.3 million
Listed on November 6th, 2010


Nucor Corp. - NUE - close: 37.74 change: +0.12

Stop Loss: 36.85
Target(s): 40.00
Current Option Gain/Loss: +14.5% and +22.9%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
11/30 update: NUE gave us another entry point with the gap down at $37.22 this morning. The stock quickly rallied off its lows and traded above its 10-dma on an intraday basis before paring its gains. We might get another chance to buy a dip in the $37.50-37.00 zone soon.

Our target is the $40.00 level. More aggressive traders could aim for the $41 region.

Current Position:
Buy the 2011 January $37.00 calls (NUE1122A37) Entry @ $1.72
- or -
Buy the 2011 January $40.00 calls (NUE1122A40) Entry @ $0.61

Entry on November 29th at $37.38
Earnings Date 01/26/11
Average Daily Volume = 3.5 million
Listed on November 27th, 2010


Transocean Ltd. - RIG - close: 67.03 change: -1.64

Stop Loss: 64.75
Target(s): 72.50, 74.90
Current Option Gain/Loss: -16.2%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/30 update: RIG did not see much follow through on yesterday's rally. The stock opened at $68.18 and after a rocky morning eventually settled at near its lows around $67, giving back more than half of yesterday's gain. I remain bullish on RIG and would still consider new positions in the $67.50-65.00 zone but I'm a little bit concerned with today's weakness in the major market averages. Readers may want to see if the S&P 500 can rally from 1180 again before initiating positions.

- Current Position -
Long the 2011 January $70.00 calls (RIG1122A70) Entry @ $2.95

Entry on November 30th at $68.18
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 6.3 million
Listed on November 29th, 2010


Union Pacific - UNP - close: 90.11 change: -0.54

Stop Loss: 87.90
Target(s): 96.25, 99.75
Current Option Gain/Loss: + 4.6%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/30 update: After a little volatility this morning UNP actually had a rather boring session with the stock drifting in a narrow range. Shares opened lower at $89.83 and spent the day oscillating around the $90 level. I would still consider bullish positions at current levels but if you're worried about the market rolling over you could wait for UNP to rally past $91.00 before initiating positions.

- Current position -
Suggested Position:
Buy the 2011 January $95 calls (UNP1122A95) Entry @ $1.52

Entry on November 30th at $89.83
Earnings Date 01/20/11
Average Daily Volume = 2.9 million
Listed on November 20th, 2010


VimpelCom Ltd - VIP - close 15.67 change +0.18

Stop Loss: 14.90
Target(s): 16.75, 17.75
Current Option Gain/Loss: -38.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, on dips

Comments:
11/30 update: VIP showed some strength this afternoon and appears to have broken the short-term bearish trend of lower highs. The company is due to report earnings on Thursday morning. Holding over earnings is a normally a high-risk event. More cautious traders will want to exit this trade by the close tomorrow (Wednesday).
Don't forget that December options expire in less than three weeks. If VIP disappoints with its earnings results the value in our position could vanish.

Current Position:
December $15.00 CALLS, Entry @ $1.05

11/27/10 new stop @ 14.90

Entry on November 8, 2010 @ 15.60
Earnings Date 11/24/2010 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on November 3, 2010