Editor's Note:

The market has turned south following the U.S. election. Concerns over the upcoming fiscal cliff and Europe persist.

Investors should take a defensive posture with any bullish positions. The market could see consistent selling pressure until the fiscal cliff issue is resolved. That could be scaling back positions, exiting early, or raising your stop loss.


Closed Plays


SPRD and WFC


Play Updates


American Intl. Group - AIG - close: 32.17

Comments:
11/10/12: AIG has seen a tough three-week decline but traders bought the dip on Friday near $31 and its 200-dma. Friday's session actually looks like a bullish engulfing candlestick reversal pattern. However, if the market continues to sink we should expect AIG to follow. I am not suggesting new positions at this time.

Earlier Comments:
Our plan was to keep our initial position size small to limit our risk. We want to exit our 2013 calls when AIG hits $39.00. We will plan on exiting our 2014 calls when shares hit $42.50.

- Suggested Positions - (small positions @ first)
May 18, 2012 - entry price on AIG @ 28.25, option @ 3.40
symbol: AIG1319A30 2013 JAN $30 call - current bid/ask $ 3.05/ 3.15

- or -

May 18, 2012 - entry price on AIG @ 28.25, option @ 4.20
symbol: AIG1418A35 2014 JAN $35 call - current bid/ask $ 3.50/ 3.70

11/02/12 AIG gapped down following its earnings report
10/06/12 adjusting our exit targets. Plan on exiting our 2013 calls when AIG hits $39.00. We'll exit our 2014 calls when AIG hits $42.50
09/08/12 Treasury has announced an $18 billion sale of AIG stock
08/18/12 new stop loss @ 29.45
06/16/12 new stop loss @ 26.95
05/18/12 triggered at $28.25
05/05/12 The U.S. government is planning to sell 164 million shares at $30.50 and AIG will probably gap down on this news.
Move the trigger down to $28.25, and move the stop loss to $25.75.
04/28/12 adjust buy-the-dip trigger to $30.00 and stop to $27.40

Current Target:$ 39.00
Current Stop loss: 29.45
Play Entered on: 05/18/12
Originally listed on the Watch List: 04/07/12


Bank of America - BAC - close: 9.43

Comments:
11/10/12: The financial sector displayed significant relative weakness on Wednesday following the U.S. election. Fortunately there was no follow through for shares of BAC. Where it goes from here is tough to decipher. The early November rally now looks like a failed rally at resistance near $10.00. Yet BAC still has a positive trend of higher lows - at least for now. I am not suggesting new positions at this time.

Earlier Comments:
Currently we do not have a specific exit target. The plan has been to exit in the $12.00-15.00 zone.

- Suggested Positions -

AUG 29, 2011 - entry price on BAC @ 8.10, option @ 1.50
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.35/ 0.36
(No stop loss on this position)

(2nd Position, bought the dip at $5.15)

NOV 23, 2011 - entry price on BAC @ 5.15, option @ 0.35
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.35/ 0.36
(no stop loss on this position)

11/10/12 no new positions at this time.
09/08/12 BAC is breaking out. Consider buying 2014 calls on a dip near the $8.50-8.40 area
07/21/12 BAC reported earnings this past week and investors have decided to sell the news. The stock looks vulnerable here and readers may want to exit early!
05/19/12 BAC has pulled back to the 61.8% retracement
03/17/12 BAC has broken out from its multi-week trading range. Broken resistance near $8.30 should be new support.
...look for earlier comments in prior updates...

Current Target: $12.00-to-$15.00
Current Stop loss: see details above
Play Entered on: 08/29/11
Originally listed in the New Plays 08/27/11


CONSOL Energy Inc. - CNX - close: 32.95

Comments:
11/10/12: Coal stocks were hammered lowered following the U.S. elections. Wall Street's reaction is suggesting they expect President Obama to remain unfriendly to the coal industry.

We had been expecting a pullback and shares of CNX hit our buy-the-dip trigger at $32.50 on Friday morning. Fortunately traders bought the dip and CNX reversed into positive territory. I suspect we could see shares retest the $32.00 level again before moving higher so readers may want to wait for a new bounce off $32 before initiating new positions or you could wait for a close over $34.00 as an alternative entry point. On a short-term basis the trend is down but CNX is holding near technical support at its 50-dma and 200-dma for now.

Earlier Comments:
We want to keep our position size small. Our long-term target is $42.50. The Point & Figure chart for CNX is bullish with a long-term $47 target.

- Suggested Positions - (small positions)
NOV 09, 2012 - entry price on CNX @ 32.50, option @ 3.24
symbol: CNX1418a40 2014 JAN $40 call - current bid/ask $ 3.20/ 3.30

11/09/12 triggered on a dip at $32.50
11/03/12 adjust the trigger down to $32.50, stop to $29.75
10/27/12 adjust the trigger down to $33.00

Chart of CNX:

Current Target: $42.50
Current Stop loss: 29.75
Play Entered on: 11/09/12
Originally listed on the Watch List: 10/13/12


Capital One Financial Corp. - COF - close: 58.37

Comments:
11/10/12: COF lost about three points for the week. Shares have retreated toward support near its trend of higher lows. Any further weakness from here definitely puts our trade in danger with our stop loss at $56.85. I'd probably wait for a new close back above $60.00 before considering new bullish positions.

Earlier Comments:
The P&F chart is bullish with a $71 target. We are aiming for $74.00. COF can be somewhat volatile so we want to keep our position size small. We'll have to keep an eye on potential resistance at $70.00.

- Suggested Positions - (small positions)
OCT 22, 2012 - entry price on COF @ 61.14, option @ 5.65
symbol: COF1418a65 2014 JAN $65 call - current bid/ask $ 4.40/ 4.65

Current Target:$ 74.00
Current Stop loss: 56.85
Play Entered on: 10/22/12
Originally listed on the Watch List: 10/06/12


Cree, Inc. - CREE - close: 31.18

Comments:
11/10/12: CREE displayed relative strength by posting a gain for the week. However, I will point out that Thursday's session has created a one-day bearish reversal pattern. There hasn't been any follow through yet but CREE is arguably short-term overbought following a four-week rally higher. Readers will want to seriously consider waiting for a dip back toward $30 or the $29.00 level before considering new bullish positions.

- Suggested Positions - (small positions)
NOV 01, 2012 - entry price on CREE @ 29.85, option @ 3.80
symbol:CREE1418a35 2014 JAN $35 call - current bid/ask $ 4.05/ 4.20

Current Target:$ 39.00
Current Stop loss: 27.45
Play Entered on: 11/01/12
Originally listed on the Watch List: 10/20/12


Discover Financial - DFS - close: 41.08

Comments:
11/10/12: Shares of DFS managed to eke out a small gain for the week. Shares are essentially consolidating sideways. I would expect shares to correct lower and breakdown under technical support at its 50-dma if the market continues to sink. DFS will likely find support near $38.00. I am not suggesting new positions at this time.

We still have the 2014 calls and we're aiming for $44.00.

- Suggested Positions -
(Closed on Sept. 27th)
JUL 05, 2012 - entry price on DFS @ 35.28, option @ 2.15
symbol: DFS1319A37 2013 JAN $37 call - exit $3.70 (+72.0%)

- or -

JUL 05, 2012 - entry price on DFS @ 35.28, option @ 3.40
symbol: DFS1418A40 2014 JAN $40 call - current bid/ask $5.50/5.80

11/03/12 new stop loss @ 36.45
09/29/12 new stop loss @ 35.75
09/27/12 hits our $39.75 target to exit 2013 calls (option @ $3.70)
09/27/12 DFS beats Wall Street's earnings estimates
09/22/12 more conservative traders may want to exit right now or before DFS reports earnings on Sep 27th.
08/25/12 new stop loss @ 34.75
08/25/12 adjusted targets to $39.75 (2013 calls), $44 (2014 calls)
08/18/12 new stop loss @ 33.45
...see prior updates for early comments.

Current Target: $39.75 for the 2013 call2, $44.00 for the 2014s
Current Stop loss: 36.45
Play Entered on: 07/05/12
Originally listed on the Watch List: 06/02/12


Family Dollar Stores - FDO - close: 66.50

Comments:
11/10/12: FDO is still churning sideways but it's churning sideways with a bullish bias. The stock managed a half point gain for the week. Readers may want to wait for a close over $67.00 before considering new bullish positions.

- Suggested Positions -
OCT 12, 2012 - entry price on FDO @ 65.88, option @ 1.70
symbol: FDO1320d75 2013 APR $75 call - current bid/ask $1.25/1.45

10/20/12 adjust stop loss to $62.95

Current Target: $74.50
Current Stop loss: 62.95
Play Entered on: 10/12/12
Originally listed on the Watch List: 10/06/12


Joy Global, Inc - JOY - close: 57.56

Comments:
11/10/12: Ouch! Shares of JOY lost -10% for the week. The stock was down hard the two days following the U.S. election and almost managed a gain on Friday. Unfortunately the sell-off this past week has broken likely support at $60 and the 50-dma.

I didn't see anything specific in the news to account for the relative weakness. JOY just tends to be more volatile. If there is any follow through lower this week then JOY will most likely hit our stop loss at $55.75.

- Suggested Positions -
SEP 25, 2012 - entry price on JOY @ 57.50, option @ 7.50
symbol: JOY1418A70 2014 JAN $70 call - current bid/ask $6.50/6.75

11/03/12 new stop loss @ 55.75
10/26/12 JOY seeing volatility on rumors it is a takeover target
09/25/12 triggered on a dip at $57.50
09/22/12 adjust entry to buy a dip at $57.50, stop to $53.90

Current Target: $78.50
Current Stop loss: 55.75
Play Entered on: 09/25/12
Originally listed on the Watch List: 09/15/12


Lennar Corp. - LEN - close: 38.11

Comments:
11/10/12: LEN produced a gain for the week. Yet bigger picture the stock and the housing sector is just churning sideways. Both are losing upward momentum. Traders did buy the dip in LEN on Friday morning but I am concerned that the stock could see a larger correction soon. More conservative traders may want to raise their stop so it's closer to the 50-dma or even take profits now.

I am not suggesting new positions at this time. Our stop remains at $33.90.

Earlier Comments:
I do think the $40.00 level is likely resistance and LEN will probably see a pullback on its initial test of $40.00. Keep in mind that we also have more than a year for our 2014 calls to work.

- Suggested Positions -
(target for 2013 calls was hit at $36.00 on 09/14/2012)
AUG 17, 2012 - entry price on LEN @ 32.72, option @ 2.07
symbol: LEN1319A35 2013 JAN $35 call - exit $3.70 (+78.7%)

- or -

AUG 17, 2012 - entry price on LEN @ 32.72, option @ 3.39
symbol: LEN1418A40 2014 JAN $40 call - current bid/ask $5.70/5.90

10/20/12 new stop loss @ 33.90, adjust exit target on 2014 calls to $44.00
09/24/12 LEN reported earnings, investors sell the news
09/22/12 new stop loss @ 33.40
09/15/12 new stop loss @ 31.40
09/14/12 2013 call target hit at $36.00, option @ 3.70 (+78.7%)
...

Current Target: $ 36.00(2013 calls), $44.00 (2014 call)
Current Stop loss: 33.90
Play Entered on: 08/17/12
Originally listed on the Watch List: 08/11/12


L-3 Communications - LLL - close: 74.47

Comments:
11/10/12: LLL is a defense contractor and President Obama's reelection sparked some serious profit taking on Wednesday. Shares of LLL plunged from about $77.50 to $72.25 before paring its gains on Wednesday afternoon. The stock has since churned sideways. If Washington fails to come up with a solution to the fast approaching fiscal cliff it could impact LLL. Half of the $1.2 trillion in spending cuts imposed by the cliff will be directed at defense spending. While LLL may fare better than some of its peers in the defense business it could still be affected negatively. Thus, I am not suggesting new positions at this time. More conservative traders may want to abandon ship.

- Suggested Positions - (small positions @ first)
NOV 05, 2012 - entry price on LLL @ 75.64, option @ 4.40
symbol: LLL1418a80 2014 JAN $80 call - current bid/ask $ 3.90/ 4.10

Current Target:$ 85.00
Current Stop loss: 71.85
Play Entered on: 11/05/12
Originally listed on the Watch List: 10/20/12


Pfizer Inc. - PFE - close: 24.17

Comments:
11/10/12: Odds are very high that PFE will hit our stop loss soon. The three-week correction lower has pulled shares down toward support near $24.00 and its 100-dma. Our stop loss is at $23.90. More aggressive traders might want to widen their stop and give PFE more room to maneuver. Shares have dipped to and bounce twice from their 150-dma in the last six months. That might be a good spot to look for support (150-dma near $23.50). Or you could place your stop loss under the 200-dma near $23.00 instead.

I am not suggesting new positions at this time.

- Suggested Positions -
Jul 18, 2012 - entry price on PFE @ 23.53, option @ 1.30
symbol: PFE1418A25 2014 JAN $25 call - current bid/ask $ 1.40/ 1.45

11/01/12 PFE reported earnings
10/20/12 new stop loss @ 23.90
10/06/12 new stop loss @ 23.40
09/29/12 new stop loss @ 22.75
09/22/12 new stop loss @ 22.45
09/08/12 new stop loss @ 21.90
08/06/12 new stop loss @ 21.35
07/18/12 trade opens. PFE @ 23.53
07/17/12 PFE meets our entry requirements (close over $23.40)
06/23/12 removed the 2013 call. We'll only play the 2014s
04/28/12 do not launch positions prior to the earnings report on May 1st.

Current Target: $28.00
Current Stop loss: 23.90
Play Entered on: 07/18/12
Originally listed on the Watch List: 04/21/12


Southern Copper Corp - SCCO - close: 34.70

Comments:
11/10/12: We were expecting a pullback in SCCO but the sharp correction in lower in the stock this week was a lot worse than expected. Copper prices actually rallied on Tuesday before the election results were known. So it's could be bit challenging to explain the huge gap down in shares of SCCO on Tuesday morning. The stock went from $38.50 on Monday to gap open lower at $35.78 on Tuesday morning. Fortunately, the answer is easy. SCCO began trading ex-dividend on November 6th. The stock has a HUGE dividend yield of 31% a year. The gap down was an adjustment for the big dividend.

We had SCCO on our watch list with a buy-the-dip entry point at $36.50. The gap open lower at $35.78 immediately opened our trade. Readers may want to wait for SCCO to close back above $36.00 before considering new bullish positions. We currently have a stop loss at $31.95. More conservative traders may want to raise that.

The plan was to keep our position size small to start.

- Suggested *SMALL* Positions -
NOV 06, 2012 - entry price on SCCO @ 35.78, option @ 2.30
symbol:SCCO1418a40 2014 JAN $40 call - current bid/ask $ 1.70/ 2.05

11/06/12 trade opened on gap down at $35.78, below our trigger.
(gap down was due to SCCO trading ex-dividend)

Chart of SCCO:

Current Target: $44.75
Current Stop loss: 31.95
Play Entered on: 11/06/12
Originally listed on the Watch List: 10/20/12


SIRIUS XM Radio - SIRI - close: 2.75

Comments:
11/10/12: The stock market's widespread declines has produced a correction lower in SIRI as well. Shares fell four days in a row before bouncing off technical support at its 50-dma. The short-term trend is still down so we may see SIRI retest its 50-dma or what should be support near $2.60 soon. I am not suggesting new positions at this time.

- Suggested Positions -
OCT 04, 2012 - entry price on SIRI @ 2.75, option @ 0.38
symbol:SIRI1418A3 2014 JAN $3.00 call - current bid/ask $ 0.40/ 0.42

- or -

Buy the Stock: Entry @ $2.75 on Oct. 4th, 2012

11/03/12 new stop loss @ 2.45
10/20/12 warning! SIRI is up five weeks in a row and growing overbought. The stock could see a sell-off on its earnings report

Current Target: $ 3.90
Current Stop loss: 2.45
Play Entered on: 10/04/12
Originally listed on the Watch List: 09/29/12


U.S. Bancorp - USB - close: 32.10

Comments:
11/10/12: Financial stocks sank following the election results and USB broke down under support at the $33.00 level. As expected shares dipped toward the next level of support near $32 and its simple 200-dma. I am not suggesting new positions at this time.

- Suggested Positions -
Jul 20, 2012 - entry price on USB @ 33.62, option @ 1.39
symbol: USB1319A35 2013 JAN $35 call - current bid/ask $ 0.21/ 0.23

- or -

Jul 20, 2012 - entry price on USB @ 33.62, option @ 3.10
symbol: USB1418A35 2014 JAN $35 call - current bid/ask $ 1.74/ 1.80

09/15/12 new stop loss @ 31.40
07/20/12 trade opened Friday morning
07/19/12 USB closes above our trigger <33.50
07/14/12 adjusted strategy: wait for a close over $33.50, stop 29.90
06/30/12 readers might want to consider an alternative entry point
06/23/12 adjust entry trigger to $29.00, stop to 26.40
06/02/12 adjust entry trigger to $28.00

Current Target: $39.50
Current Stop loss: 31.40
Play Entered on: 07/20/12
Originally listed on the Watch List: 05/19/12


Visa, Inc. - V - close: 142.93

Comments:
11/10/12: Shares of Visa held up pretty well with traders buying the dip most morning. The stock remains near its all-time high set in early November. I don't see any changes from my prior comments.

Readers may want to seriously consider an early exit now to lock in gains. While more aggressive traders may want to raise their exit target since we still have over a year on our 2014 calls. Currently our exit target is $149.00 for the 2014 calls.

- Suggested Positions -
(Closed the 2013 calls on Oct. 22nd at the open)
JUL 03, 2012 - entry price on V @ 126.49, option @ 5.85
symbol: V1319A135 2013 JAN $135 call - exit @ $7.95 (+35.8%)

- or -

JUL 03, 2012 - entry price on V @ 126.49, option @ 11.95
symbol: V1418A140 2014 JAN $140 call - current bid/ask $16.25/18.65

11/03/12 New stop loss @ 134.00
10/31/12 Visa delivers a bullish earnings report
10/22/12 closed 2013 Jan call at the open
10/20/12 prepare to exit our 2013 calls at the open on Monday
10/13/12 readers may want to take profits early if you're holding the 2013 calls.
10/06/12 new stop loss @ 129.00
08/06/12 new stop loss @ 119.75
07/16/12 V pops on news of a settlement in 7-year lawsuit
07/03/12 trade opens with Visa at $126.49
07/02/12 Visa closes above our trigger @ 125.50

Current Target: $149.00
Current Stop loss: 134.00
Play Entered on: 07/03/12
Originally listed on the Watch List: 06/30/12


CLOSED Plays


Spreadtrum Communications - SPRD - close: 19.44

Comments:
11/10/12: Our SPRD trade has been stopped out.

SPRD reported earnings on November 8th. One source reported that SPRD beat estimates by 7 cents while a different report said SPRD missed by two cents. Management issued relative bullish guidance so why did the stock get killed on Friday with an -8.8% plunge (it was a -14.7% plunge intraday)? It seems that investors were unhappy with the results and guidance was not bullish enough. Plus, multiple analysts downgraded the stock following the earnings report. There are concerns that profit margins could be pressured and SPRD could lose market share to competitors.

Our stop loss was at $18.90. SPRD gapped open lower at $19.20 and quickly hit our stop loss as it spiked down to $18.18 before paring its losses.

- Suggested Positions -
Sep 07, 2012 - entry price on SPRD @ 20.59, option @ 1.95
symbol:SPRD1319a22.5 2013 JAN $22.5 call - exit $0.55 (-71.9%)

11/09/12 SPRD gaps down in reaction to earnings and hits our stop
11/08/12 SPRD reports earnings
10/27/12 SPRD has reversed higher and broken through resistance
10/06/12 SPRD looks vulnerable. Investors may want to exit early

Chart of SPRD:

Current Target: $24.00
Current Stop loss: 18.90
Play Entered on: 09/07/12
Originally listed on the Watch List: 08/25/12


Wells Fargo & Co - WFC - close: 32.35

Comments:
11/10/12: A week ago we decided it would be best to exit our WFC trade early. The plan was to exit on Monday morning at the open to cut our losses. WFC opened at $33.56 on Nov 5th. The option opened at $1.27.

- Suggested Positions -
SEP 14, 2012 - entry price on WFC @ 35.60, option @ 2.26
symbol: WFC1418a40 2014 JAN $40 call - exit $1.27 (-43.8%)

11/05/12 planned exit on Monday morning
11/03/12 prepare to exit positions on Monday morning at the open

Chart of WFC:

Current Target: $44.00
Current Stop loss: 32.75
Play Entered on: 09/14/12
Originally listed on the Watch List: 08/06/12