Closed Plays


CELG, MDR, MTW, POT, PRE, TLT, UNH, and V were all stopped out this week thanks to Thursday's huge intraday swings.


Play Updates


Arch Coal Inc. - ACI - close: 23.84 change: -0.33

It's been a rough week for stocks and ACI was no exception. Shares gave up more than 10% with a drop back toward their exponential 200-dma near $23.00 on Thursday. ACI retested this level Friday morning and is now off more than 15% from its recent highs. Most of its peers are off about 20% from their recent highs. I cautioned readers a week ago to expect a dip toward $25-24 and the stock over corrected. The question is will support in the $22 zone around its 200-dma actually hold up. You could argue that the peak in January and April is a bearish double top. I am not suggesting new bullish positions at this time. We already sold half our position for profit. Our final long-term target for the LEAP trade is $34.75.

May 14th, 2009 - entry price on ACI @ 16.00, option @ 2.40
symbol: ACI1122A30 2011 JAN $30 LEAP call - current bid/ask $2.05/2.30
-stop loss on ACI @ 21.95

05/01/10 Sell Half, ACI @ $27.00, option @ 3.00 (+25%)

--2nd Entry--
Feb 13th, 2010 - entry price on ACI @ 21.65, option @ 4.40
symbol: ACI1221A25 2012 JAN $25 LEAP call - current bid/ask $5.70/6.40
-stop loss on ACI @ 21.95

05/01/10 Sell Half, ACI @ $27.00, option @ 7.60 (+72%)

Chart of ACI:


Berkshire Hathaway Inc. - BRK.B - $74.41 -0.18

Bingo! I have been suggesting readers wait for a dip into the $73-70 zone before considering new bullish positions. The market sell-off on Thursday pushed BRK.B to $71.50 before bouncing. Shares slipped to $72.73 on Friday if you missed the Thursday entry point. Now the correction may not be over yet so I would still consider positions in the $73-70 zone but would focus on the $72 level and possibly the rising 200-dma near $71, which should offer some technical support. More conservative traders may want to wait and buy a bounce instead of buying calls on a decline. The correction in BRK.B has hit about 13%.

Our first target is $90.00. Our second target is $99.50

Feb 6th, 2010 - entry price on BRK.B @ 73.57, option @ 4.80
symbol: 2011 JAN $80 BRKB1122A80 LEAP call - current bid/ask $5.85/6.70
-stop loss on BRK.B @ 69.00

Feb 6th, 2010 - entry price on BRK.B @ 73.57, option @ 6.50
symbol: 2012 JAN $85 BRKB1221A85 LEAP call - current bid/ask $9.00/9.80
-stop loss on BRK.B @ 69.00

Chart of BRK.B:


BorgWarner Inc. - BWA - close: 37.09 change: -2.49

Ouch! It's been a painful week for BWA. After hitting new 52-week highs two weeks ago shares just gave up more than 14% and on rising volume. The rally failed on May 6th after BWA was upgraded to a "buy" and shares plunged to their 100-dma during Thursday's meltdown. Traders sold the bounce again on Friday for a 6.2% loss on no news. The breakdown under $40 and its 50-dma is technically bearish but BWA should have some support near $35.00. Unfortunately our stop loss is pretty close to the $35 level and the 200-dma is near the $34.25 area.

More conservative traders may want to start taking some money off the table right now since I do expect BWA to test the $35 level. I am raising our risk on this trade by adjusting our stop loss lower. The late January low was $33.99 and the February low was near $33.85. I am moving our stop loss down to $33.40. BWA would have to breakdown under its 200-dma before hitting our stop. I am not suggesting new bullish positions at this time.

We have already taken profits once at $44.50. Our second and final long-term target is $49.75.

Feb 17th, 2010 - entry price on BWA @ 37.55, option @ 3.90
symbol: BWA1122A40 2011 JAN $40 LEAP call - current bid/ask $4.00/5.40
-stop loss on BWA @ 33.40 *new*

04/29/10 1st Target Hit, BWA @ 44.50, option @ $7.63 (+95%)

Chart of BWA:


CIRCOR Intl. - CIR - close: 30.79 change: -1.35

CIR was a watch list candidate that was triggered on Thursday's panic selling. We were looking for a dip toward support near $30.00 with a trigger to buy calls at $30.50. This past week the stock has been correcting and CIR slipped to $29.80 on Thursday opening our play. Unfortunately, I have bad news to tell you. The option prices on CIR have been outrageously priced. A few days ago the 2010 November $35 calls were trading around $0.30 but on Thursday they traded at $5.00, even during the market decline. Right now these options have a massive spread with a bid at $1.50 and an ask at $4.90. I would not use market orders at these prices. Try a limit order in the $1.50-2.00 range and see if you get filled. Officially the newsletter will have to use the $5.00 price from Thursday, which puts us at a handicap but you the reader may be able to get a better price.

The $30.00 level should be decent support supported by the 200-dma near $29.00. More conservative traders may want to wait and buy a bounce instead of buying the correction. Readers also need to keep in mind that CIR is due to report earnings on May 10th and Wall Street expects a profit of 16 cents a share. Cautious investors will want to consider waiting until after the earnings report before considering putting any capital to work since the stock could see a post-earnings move.

We will keep our stop loss at $27.45 for now. Our long-term target is the $40 area.

NOTE: I suggested readers only initiate half a position to limit our risk.

May 6th, 2010 - entry price on CIR @ 30.50, option @ 5.00
symbol: CIR 10K35.00 2010 NOV $35 call - current bid/ask $1.50/4.90
-stop loss on CIR @ 27.45

Chart of CIR:


Continental Resources - CLR - close: 43.70 change: -1.21

Whoa! Sell in May and go away seems to be the action here in CLR. Shares did hit a new high last Monday near $52 but it's been down hill every day since. The company reported earnings on May 5th and beat estimates by 8 cents. Revenues also beat estimates by a wide margin with CLR reporting sales of $248.3 million for the first quarter. That didn't seem to matter. The panic selling on Thursday pushed CLR to an intraday low of $41.00. The $42.00 level should offer some short-term support backed up by additional support near $40 and its 200-dma. However, after an 14.7% decline in four days I would be extra cautious about launching new positions. Our long-term target is $59.00.

Half Position (or smaller)

Apr 28, 2010 - entry price on CLR @ 45.25, option @ 4.40
symbol: CLR1018L50 2010 DEC $50 call - current bid/ask $4.00/4.70
-stop loss on CLR @ 39.75

Chart of CLR:


EMC Corp. - EMC - close: 19.01 change: -0.62

EMC is another watch list candidate that was triggered on Thursday's intraday plunge. Shares were already correcting and the Thursday weakness pushed EMC way past our trigger to buy calls at $18.25 and sent the stock down toward its exponential 200-dma near $17.10. When EMC hit our trigger at $18.25 the 2011 January $20 call was trading around $1.40 (the low for the day was $1.23). The 2012 January $20 call was trading around $2.50 and its low for the day was around $2.39. EMC is still correcting and shares lost another 2.6% on Friday with a drop toward the $18.00 level. While we could launch positions right here near $18.00 I would not be surprised to see shares retest the 200-dma near $17.30 so I strongly suggest readers wait and look for a dip into the $17.50-17.30 as a better entry point.

Currently our stop loss is at $16.75. More aggressive traders may want to use a wider stop (maybe $15.90). Our first target is $22.50. Our second, longer-term target is $24.75.

May 6, 2010 - entry price on EMC @ 18.25, option @ 1.40
symbol: EMC 11A20.00 2011 Jan $20 call - current bid/ask $1.34/1.39
-stop loss on EMC @ 16.75

- or -

May 6, 2010 - entry price on EMC @ 18.25, option @ 2.50
symbol: EMC 12A20.00 2012 Jan $20 call - current bid/ask $2.42/2.50
-stop loss on EMC @ 16.75

Chart of EMC:


Flowserve - FLS - close: 103.50 change: -3.89

The profit taking in shares of FLS continues. Flowserve was on our watch list with a trigger to buy calls at $102.00. The stock hit our trigger on Thursday's intraday dive when FLS hit $101.00 before bouncing back to $107.39. Unfortunately the selling continued into Friday with a breakdown under the stock's 100-dma. At this time I would fully expect shares to test the $100 level and its rising 200-dma. While the play is open look for a dip close to $100 or better yet a bounce from $100 as our next entry point.

You may have noticed that the call LEAPS options on FLS didn't move that much during Thursday's fire sale. When FLS hit our trigger at $102 the 2011 January $110 call was trading around $13.60. The 2012 January $120 call was trading around $14.90. Currently we have a stop loss at $92.40 and our long-term target is $135.00.

May 6, 2010 - entry price on FLS @ 102.00, option @ 13.60
symbol: FLS 11A110.00 2011 Jan $110 call - current bid/ask $11.10/12.10
-stop loss on FLS @ 92.40

- or -

May 6, 2010 - entry price on FLS @ 102.00, option @ 14.90
symbol: FLS 12A120.00 2011 Jan $120 call - current bid/ask $14.90/17.00
-stop loss on FLS @ 92.40

Chart of FLS:


Fortune Brands - FO - close: 47.04 change: -2.21

The reversal that started the last week of April has continued into a full scale correction in FO. Shares are now off more than 15% from their recent highs and I don't think it's over yet. Thursday's weakness produced a breakdown under $50.00 and its 50-dma. Traders sold the intraday bounce and Friday lost another 4.4%. I am expecting a drop toward $45.00, which means we are looking at getting stopped out soon. I am longer-term bullish on FO so I'm willing to increase our risk by adjusting our stop loss lower. The 200-dma is near $43.50. Let's move our stop down to $42.90. More conservative traders may want to go ahead and just exit now to preserve capital since we are taking more risk and we're only dealing with September calls and not LEAPS. I am not suggesting new bullish positions at this time but a nice bounce in the $45 area could be our next entry point.

We have already chosen to sell half our position near $52. Our long-term (final) target is $59.75.

Mar. 12th, 2009 - entry price on FO @ 47.55, option @ $2.20
symbol: FO1018I50 SEP 2010 $50 call - current bid/ask $2.35/ 2.60
-stop loss on FO @ 42.90 *new*

04/17/10 Sell Half - FO @ $52.00, option @ $4.30 (+95%)

Chart of FO:


Forest Oil Corp. - FST - close: 25.91 change: -1.48

FST reported earnings on Monday, May 3rd and missed estimates by 5 cents with revenues also failing to meet expectations. Yet the stock popped higher on Tuesday morning. Traders quickly sold into strength and the move marked the beginning of the correction for FST. Overall the oil sector has been victim to currency moves. The sovereign debt crisis in Europe has pushed the euro lower and the U.S. dollar has rallied in response. The dollar strength has produced a sharp correction in oil prices, which is dragging down the oil stocks. FST is testing support near $25.00 and its exponential 200-dma.

I am not suggesting new bullish positions given the recent weakness. More conservative traders may want to go ahead and exit early now to limit losses. Our long-term target is $37.50.

Oct 15th, 2009 - entry price on FST @ 23.85, option @ 7.40
symbol: FST1122A20.00 2011 $20 LEAP call - current bid/ask $ 7.90/ 8.30
-stop loss on FST @ 23.45

Chart of FST:


Imation Corp. - IMN - close: 9.78 change: -0.68

The correction in shares of IMN continues and I don't think it's over yet. IMN has been a watch list candidate. Our plan was to buy the stock or call options on a dip to $10.00. Shares rallied on Thursday morning only to reverse near $11.00 and its 10-dma and 50-dma. Then the market sell-off occurred and IMN dipped to $9.89 hitting our trigger to open positions at $10.00. My preference was for the stock but I also suggested the 2010 October $10 call yet the call didn't trade on Thursday. The ask on the call should have been trading around $1.00 when we were triggered.

IMN was sold hard again on Friday for a 6.5% decline. It looks like shares are headed for the $9.50 level, which should be the next level of support. The velocity of the correction has been steep with a 22% haircut in just the last couple of weeks. Readers may want to wait and buy a bounce from $9.50 instead of buying the dip. I am moving our stop loss down to $8.95. Our first long-term target is $12.25. Our second, even longer-term target is $14.25.

May 6, 2010 - entry price on IMN @ 10.00,
Stop loss at $8.95

- or -

May 6, 2010 - entry price on IMN @ 10.00, option @ 1.00
symbol: IMN 10J10.00 2010 Oct $10 call - current bid/ask $0.90/1.40
-stop loss on IMN @ 8.95

Chart of IMN:


Lockheed Martin - LMT - close: 81.27 change: -1.58

After consolidating sideways for a couple of weeks LMT broke down with the market's Thursday sell-off. Shares dipped to $78.74 on Thursday, which was more than enough to hit our trigger at $80.50. Our watch list strategy was to buy the 2011 or 2012 call LEAPS. The 2011 January $85 calls were trading around $6.50 when LMT hit our trigger. The 2012 January $90 calls were trading near $7.70. The correction may not be over yet. The $80 level should offer support, bolstered by the 100-dma but LMT could dip closer to the $78-77 zone. Readers may want to wait on launching new positions since we may get a better entry point in the next few days. Our stop loss is at $74.75. Our first target is $99.00. Our second, longer-term target is $109.00.

FYI: Our plan was to only use small (half) positions to limit our risk.

May 6, 2010 - entry price on LMT @ 80.50, option @ 6.50
symbol: LMT 11A85.00 2011 Jan $85 call - current bid/ask $ 5.50/ 5.80
-stop loss on LMT @ 74.75

- or -

May 6, 2010 - entry price on LMT @ 80.50, option @ 7.70
symbol: LMT 12A90.00 2012 Jan $90 call - current bid/ask $ 6.60/ 7.70
-stop loss on LMT @ 74.75

Chart of LMT:


Millicom Intl. - MICC - close: 79.71 change: -1.11

MICC suffered a 10% correction this past week. We had the stock on our watch list to buy a dip near support around $80.00. MICC hit our trigger at $80.00 on Thursday's market meltdown when the stock hit $78.35. The 2011 January $90 calls were trading around $8.60. Unfortunately the sell off continued on Friday and share briefly traded under technical support at the 200-dma. The low on Friday was $75.31. The long-term trend is still up and thus far the correction from its recent high has shaved off about 15%. I am concerned that MICC might dip toward the $70.00 level before finally rebounding so we're going to adjust our stop loss down to $67.75, which is just under the February low. This does raise the risk level for this trade. While I am tempted to buy this dip near the 200-dma readers may want to wait and see if shares do fall toward $70 and reconsider an entry point there. Our long-term target is $99.50 and the $109.00 levels.

May 6, 2010 - entry price on MICC @ 80.00, option @ 8.60
symbol: MICC 11A90.00 2011 Jan $90 call - current bid/ask $ 6.80/ 7.90
-stop loss on MICC @ 67.75

Chart of MICC:


PEPSICO Inc. - PEP - close: 64.57 change: -0.13

Shares of PEP weathered the week relatively well. The stock spent most of the time failing to breakout over new resistance near $66.00. Thursday saw a failed rally at $66 and a drop toward $62.00 on the market swoon but PEP closed Thursday at $64.70. I have been warning readers to expect a correction toward the $63-62 area. I would still expect PEP to retest the same levels again before moving higher. I'm not suggesting new bullish positions at this time.

Our (adjusted) final target is $72.25.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $7.15/7.40
-stop loss on PEP at $59.40

03/27/10 SELL HALF: PEP $ 66.59, Option @ $8.00 (+77.7%)

Chart of PEP:


Titanium Metals - TIE - close: 15.40 change: -0.79

Investors reacted positively to TIE's earnings report. The company reported on May 5th and TIE's profit of 9 cents a share beat estimates of only 3 cents. Revenues also surged past analysts' estimates. The stock rallied on the news and garnered some bullish analyst comments. While the stock did fail at resistance in the $17.00-17.30 area TIE closed virtually unchanged for the week. I remain longer-term bullish on TIE but readers will want to seriously consider taking profits right now! The market correction may not be over yet and now that earnings are out most of the good news should already be baked in.

A few weeks ago we closed the 2011 January $15 call LEAP. We still have the 2012 January $15 call LEAP. I am not suggesting new positions at this time. Our final, long-term target is $19.75.

Feb. 20th, 2010 - entry price on TIE @ 12.06, option @ 2.60
symbol: WWN1221A15, 2012 JAN $15 LEAP call - current bid/ask $4.40/4.80
-stop loss on TIE @ 12.90

03/27/10 SELL HALF: TIE @ 16.21, option @ 4.50 (+73%)

Chart of TIE:


Whiting Petroleum - WLL - close: 90.33 change: +0.87

Readers may want to reconsider their bullish positions in WLL. The stock rallied to $93 on Monday and then immediately reversed lower. The drop from $93 to Friday's low near $77 is a 17% correction. Most of the oil sector has suffered due to the euro's decline. The plunging euro currency has sent the U.S. dollar skyrocketing higher. Commodities are traded in dollars and that pushed crude oil down. The oil sector stocks react as a result and WLL plunged. Technically the weekly chart has produced a huge bearish engulfing candlestick, which is normally a reversal pattern but it needs to see some confirmation. The close under the $82-80 zone is another bearish development.

I'm repeating myself but more cautious traders may want to abandon ship. If the market continues to slide we could easily get stopped out under $75.00 soon. I am not suggesting new bullish positions at this time. Our long-term target is $99.50. More aggressive traders could aim higher. Remember, this was an aggressive entry point and we wanted to keep positions small to limit our risk (half a position).

Half position

Apr 27, 2010 - entry price on WLL @ 83.50, option @ 7.50
symbol: OVK1122A90 JAN 2011 $90 LEAP call - current bid/ask $ 8.20/ 8.90
-stop loss on WLL @ 74.75

Chart of WLL:


WLT - Walter Energy Inc. close: $73.28 change: -0.80

How low will it go? We were expecting shares of WLT to be volatile and over correct to the down side. Shares dipped to $66.87 on Thursday afternoon, which pushes the correction in WLT to about 33% from its highs near $100. Our trigger to open positions was at $73.00 and WLT almost hit our trigger on Wednesday, May 5th but the stock bounced at $73.10. Our trade didn't open until Thursday's decline. The 2011 January $80 call was trading around $12.00 and the 2012 January $90 call was trading near $14.10 when WLT hit our trigger.

Currently WLT is trying to find support near $70.00 and its rising 200-dma. If this level breaks I would expect shares to fall toward their February low near $63.50. Therefore I am adjusting our stop loss from $64.50 to $62.40. Aggressive traders could launch positions now but I would suggest readers wait. We might get a better entry point on a dip or bounce in the $65 region. Our first target is $99.00.

FYI: I cautioned readers that WLT was a very volatile stock and investors may want to use small positions to limit their risk.

May 6, 2010 - entry price on WLT @ 73.00, option @ 12.00
symbol: WLT 11A80.00 2011 Jan $80 call - current bid/ask $11.10/12.10
-stop loss on WLT @ 62.40

- or -

May 6, 2010 - entry price on WLT @ 73.00, option @ 14.10
symbol: WLT 12A90.00 2012 Jan $90 call - current bid/ask $13.70/15.40
-stop loss on WLT @ 62.40

Chart of WLT:


Wal-Mart Stores Inc. - WMT - close: 52.40 change: -0.83

Shares of WMT weathered the recent storm on Wall Street pretty well. Shares slipped to $51.53 on Thursday's market decline and traders sold it again on Friday with a breakdown under the simple 200-dma, which should have offered stronger support. I have been suggesting readers wait for a dip near the $52.50-52.00 area as a potential entry point to buy calls and we just got it. However, given the market's weakness I am starting to wonder if we will see an even better entry point near the $51-50 zone.

I've said it before, WMT doesn't move that fast so you can take your time on an entry point. Shares have managed to close above the $52 level for now and I would feel comfortable buying LEAPS anywhere in the $53-50 zone it just depends on how patient you are. This is a very long-term trade for us. We don't have to buy the dips. You can wait to buy a bounce (which could be weeks away).

Our long-term target is the $63.00 level. Since WMT does not move very fast readers may want to supplement their position by turning it into a calendar spread or a diagonal spread to enhance their gains.

Mar 7th, 2009 - entry price on WMT @ 54.14, option @ 4.60
symbol: WWT1221A55 JAN 2012 $55 LEAP call - current bid/ask $5.10/5.35
-stop loss on WMT @ 49.45

Chart of WMT


CLOSED Plays

Celgene Corp. - CELG - close: 57.49 change: -0.61

It has been a rough week for CELG and Thursday was down right ugly. The stock plunged from $60 to $53.39 on Thursday hitting our stop loss at $54.75 along the way. The option was trading around $2.00 when we were stopped out and the LEAP hit $1.15 at its low for the day. Our play has been closed but readers may want to put CELG on their watch list for a correction toward the $50.00 level, which could end up being significant support.

Mar 1st, 2010 - entry price on CELG @ 60.75, option @ 5.40
symbol: VCS1122A65 2011 JAN $65 LEAP call - current bid/ask $4.50/4.75
-stop loss on CELG @ 54.75

05/06/10 Stopped out @ 54.75, option @ $2.00 (-62.9%)

Chart of CELG:


McDermott Intl. - MDR - close: 23.50 change: -1.34

It turned out to be a very bad week for MDR. Shares lost 17.3% with the intraday drop to $22.66 on Friday. Our bullish play was stopped on during Thursday's market meltdown when MDR hit our stop loss at $23.90. The call option was trading around $1.60 when we were stopped out. The low for the day was $1.45. This was an aggressive trade and the plan was to limit our risk with a small position.

- Half position size -
Apr 14th, 2010 - entry price on MDR @ 28.25, option @ 2.95
symbol: 2011 JAN $30 LEAP call - current bid/ask $ 1.40/ 1.70
-stop loss on MDR @ 23.90

05/06/10 Stopped out @ 23.90, option @ 1.60 (-45%)

Chart of MDR:


Manitowoc Inc. - MTW - close: 12.39 change: -0.75

The correction in MTW continues and shares lost another 11%. I warned readers a week ago that MTW looked poised to move lower and suggested an early exit. Shares of MTW were very volatile on Thursday and the stock dipped to exactly $11.75, which happened to be our stop loss. Our trade is closed and the option traded down to $4.28 on Thursday.

Oct 30th, 2009 - entry price on MTW @ 9.10, option @ 2.61
symbol: VMT-AB, 2011 JAN $10 call - current bid/ask $3.60/4.00
-stop loss on MWT @ 11.75

05/06/10 Stopped out, option @ 4.28 (+63.9%)

01/18/10 Sell Half! MTW @ 13.70, option at $4.80 bid (+83.9%)

- or -

Oct. 30th 2009 - entry price on MTW (the stock) @ 9.10
- stop loss on MTW @ 11.75

05/06/10 Stopped out, MTW @ 11.75 (+29%)

01/18/10 Sell Half! MTW @ 13.70 (+50.5%)

Chart of MTW:


Potash Corp. - POT - close: $99.97 change: -0.40

The correction in POT slashed off another 10% this past week. Shares broke down under support near $105 and immediately fell toward round-number, psychological support near $100.00. Thursday's market weakness was too much and POT hit our stop loss at $98.50 closing this trade. The option was trading around $11.15 when we were stopped out. The low for the option on Thursday was $10.80.

We sold half our position near $125 in March.

Jan. 28th, 2010 - entry price on POT @ 101.00, option @ 11.75
symbol: VPT-AB, 2011 LEAP $110 call - current bid/ask $11.15/11.45
-stop loss on POT @ 98.50

05/06/10 Stopped out @ 98.50, option @ 11.15 (-5%)

SELL HALF (03/13/10) option @ $26.35 bid (+124%)

Chart of ORCL:


PartnerRe Ltd. - PRE - close: 72.71 change: -0.38

Stocks connected to the oil spill in the Gulf of Mexico are still getting hammered. PRE broke down under technical support at its 200-dma and then fell under what should have been support near $75.00. The stock hit our stop loss at $74.75 on Wednesday. The option was trading around $1.60 when we were stopped out. The very next day PRE announced earnings that were significantly better than expected but the news failed to have an impact on the stock price. Shares actually sank deeper.

Feb. 13th, 2010 - entry price on PRE @ 76.28, option @ 2.70
symbol: PRE1021H80, 2010 AUG $80 call - current bid/ask $0.75/1.00
-stop loss on PRE @ 74.75

05/05/10 Stopped out @ 74.75, option @ 1.60 (-40.7%)

Chart of PRE:


iShares 20+Yr Bond ETF - TLT - close: 95.58 change: -1.21

The Greek contagion scare has sent the euro currency plunging lower this past week. In response the U.S. dollar has soared and money has flowed into the apparent safety of U.S. bonds. This rally in the bond market pushed the TLT higher and we were stopped out at $93.15 on Tuesday, May 4th. At the time we were stopped out the 2011 January $85 put was trading around $2.80. The 2012 January $80 put was trading near $5.60.

Eventually the U.S. is going to suffer for our rising debt load but for now we appear safe compared to the alternatives in Europe.

FYI: The TLT is an exchange traded fund that tries to mimic the performance of the Barclays Capital U.S. 20+Year Treasury Bond Index.

Jan. 09th, 2010 - entry price on TLT @ 89.29, option @ 6.40
symbol: VJL-MG, JAN 2011 $85 LEAP put - current bid/ask $3.20/3.45
-stop loss on TLT @ 93.15

05/04/10 Stopped out @ 93.15, option @ 2.80 (-56%)

Jan. 09th, 2010 - entry price on TLT @ 89.29, option @ 8.90
symbol: YLI-MB, JAN 2012 $80 LEAP put - current bid/ask $6.15/6.90
-stop loss on TLT @ 93.15

05/04/10 Stopped out @ 93.15, option @ 5.60 (-37%)

Chart of TLT


UnitedHealth Group Inc. - UNH - close: 29.02 change: -0.22

UNH continued to slowly drift lower this past week but didn't breakdown under the $29.00 level until Thursday's market meltdown. UNH fell to $27.97 before paring its losses but our stop loss was hit at $28.95 closing this trade. The option was trading around $1.75 when we were stopped out. The plan was to use small positions to limit our risk. If UNH can find support again in the $23.50 area we might want to take another look at it for a possible trade.

Dec 16th, 2009 - entry price on UNH @ 31.55, option @ 3.80
symbol: VUH-AG, 2011 JAN $35 LEAP call - current bid/ask $1.73/1.84
-stop loss on UNH @ 28.95

05/06/10 Stopped out @ 28.95, option @ $1.75 (-54%)

Chart of UNH:


Visa Inc. - V - close: 82.29 change: -0.63

It has been an extremely ugly week for shares of Visa. The stock corrected sharply and when Thursday's market plunge occurred traders rushed to lock in profits. The stock fell to $75.91 intraday. We were actually stopped out at $84.90 on Wednesday, May 5th. The option was trading around $4.00 when we were stopped out. Aggressive traders may want to keep an eye on the stock since Visa is testing support near $80 and its rising 200-dma.

Mar 9th, 2009 - entry price on V @ 91.00, option @ 4.60
symbol: VSK1122A100 JAN 2011 $100 LEAP call - current bid/ask $3.50/3.60
-stop loss on V @ 84.90

05/05/10 Stopped out @ 84.90, option @ 4.00 (-13%)

Chart of V: