Editor's Note:
We have been waiting for a pull back and today's decline hit a couple of triggers. KR and XLF, both bullish plays, have been opened.

Market pundits were in an uproar this afternoon about the widespread decline today where stocks, bonds, and metal (gold, silver) all surged lower in the last couple of hours of trading. Everyone was talking about buying puts to protect their stock positions. This is clearly a bearish reversal for many securities. The question is, "Will there be any follow through?" Is this just a temporary dip like the ones we've seen over the past twelve weeks? Or is this the start of something more?

If this is another temporary dip then we want to look for entry points as stocks and the market nears clear support levels. If this is a real correction then the market could see a -5% decline (or more) and we'll see most of our bullish candidates get stopped out. Readers will want to keep positions small for the time being.

-James

Current Portfolio:


BULLISH Play Updates

Alcoa Inc - AA - close: 13.75 change: -0.21

Stop Loss: 12.45
Target(s): 14.95, 15.95
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
11/9: The upward surge in the dollar had market commentators all abuzz about the commodity space. Yet aside from gold and silver commodity-related issues help up reasonably well. Especially since they're so overdue for a real correction. AA only lost -1.5% but it is worth noting that shares tagged a new relative high before reversing. This very well could be a another bearish reversal but I still expect support near $13.00.

I am adjusting our trigger to buy AA from $13.50 to $13.30 and we'll move the stop loss down to $12.45.

Suggested Position: Buy AA stock @ 13.30 <-- new TRIGGER

Entry on November xx at $xx.xx
Earnings Date 01/10/11 (unconfirmed)
Average Daily Volume: 26.1 million
Listed on November 6th, 2010


Citigroup Inc - C - close 4.30 change -0.14

Stop Loss: 4.08
Target(s): 4.60, 4.75, 4.95
Current Option Gain/Loss: + 3.3%
Time Frame: 4 to 6 weeks
New Positions: NO

Comments:
11/9: Financial stocks were laggards today and Citigroup gave up -3.1%. The stock paused near support at $4.30. If the correction continues then we can look for support near $4.20 and $4.10. Our stop is at $4.08. I'm not suggesting new positions at this time.

Current Position: Long C stock, entry was at $4.16
Options Traders: Long December $4.00 CALL

Entry on October 27, 2010
Earnings Date 01/19/11 (unconfirmed)
Average Daily Volume: 523 million
Listed on October 25, 2010


CVS Caremark Corp. - CVS - close: 31.03 change: -0.20

Stop Loss: 30.45
Target(s): 33.50, 34.90
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
11/9: CVS gave back most of yesterday's gains after shares failed at $31.50 this morning. Nimble traders could look for a dip to the 50-dma or the $30.00 level as alternative entry points. I'm still waiting for a move higher to $31.80. CVS will probably have additional resistance at its 200-dma (currently near $32.40) but our first target is $33.50. Our second, longer-term target is $34.90.

BULLISH TRIGGER @ 31.80

Suggested Position: buy the stock @ 31.80
- or
BUY the 2011 January $33.00 call (symbol: CVS1122A33)

Entry on November xx at $xx.xx
Earnings Date 02/08/11 (unconfirmed)
Average Daily Volume: 10.1 million
Listed on November 8th, 2010


Hansen Natural Corp. - HANS - close: 50.05 change: -0.92

Stop Loss: 47.25
Target(s): 51.75
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
11/9: We have been waiting for a correction in HANS and it looks like it may have begun today. A breakdown under round-number support at $50.00 should portend a quick drop toward support near $48.00. We want to open positions at $48.25. Please note I'm changing the stop loss to $47.25. Keep your positions small to limit your risk.

Earlier Comments:
Use a trigger at $48.25 to buy HANS or buy calls. If triggered we'll use a stop loss at $47.25.

Suggested Position: BUY the stock at $48.25

- or -

BUY the December $50.00 calls (on a dip at $48.25)

Entry on November xx
Earnings Date 11/04/10 (confirmed)
Average Daily Volume: 4.5 million
Listed on October 16, 2010


Kroger Co. - KR - close 22.72 change +0.01

Stop Loss: 21.45
Target(s): 23.70
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
11/9: KR managed to eke out a fractional gain after traders bought the dip near $22.50 this morning. The intraday low was $22.55, which just happens to be our entry point so the play is open. However, given the market's weakness today readers may want to wait on opening new positions. Look for a pull back closer to $22.00.

Earlier Comments:
Stop loss at $21.45. Our target is $23.70 near the April highs. We'll set a secondary, longer-term target at $24.75.

Current Position: Long KR stock @ 22.55

Annotated Chart:

Entry on November 9th @ 22.55
Earnings Date 12/8/2010 (unconfirmed)
Average Daily Volume: 6 million
Listed on November 3, 2010


NYSE Euronext - NYX - close: 29.38 change: -0.96

Stop Loss: 29.40
Target(s): 34.50
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
11/9: The trading action has turned bearish for NYX. Friday now looks like a failed rally at resistance and today's -3.1% plunge left the stock under its 50-dma. If we don't see a bounce soon, maybe near the 200-dma approaching the $29.00 level, we'll drop NYX as a candidate. We will want to use a trigger to buy the stock at $31.25.

Earlier Comments:
We want to use a trigger at $31.25 to buy NYX (or calls) with an initial target of $34.50. More conservative traders could wait for a close over $31.25 instead of an intraday move above this level.

Trigger @ 31.25

Suggested Position: Buy NYX stock @ 31.25

Entry on November xx at $xx.xx
Earnings Date 02/09/11 (unconfirmed)
Average Daily Volume: 2.5 million
Listed on November 6th, 2010


SPDR Financial ETF - XLF - close 15.17 change -0.29

Stop Loss: 14.45
Target(s): 17.25
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes

Comments:
11/9: Financials were some of the worst performers today with heavyweights like BAC down -2.6% and WFC down -3.1%. The XLF slipped -1.8% and hit $15.07 intraday. Our trigger to open bullish positions was hit at $15.25. If you're still looking for an entry point readers may want to wait for a dip closer to $15.00 or the 200-dma.

Earlier Comments:
Stop loss at $14.45. Our first target is $17.25. You might want to buy call options instead of the ETF because the XLF doesn't move very fast (I'm thinking the 2011 January calls).

Current Position: Long the XLF (etf) @ 15.25

- or -

Options Traders: Long the 2011 January $15.00 call, entry @ $0.85

Annotated Chart:

Entry on November 9th @ 15.25
Earnings Date N/A (unconfirmed)
Average Daily Volume: 83 million
Listed on November 4, 2010


BEARISH Play Updates

None. No bearish plays currently.