Editor's Note:
The stock market is starting to correct lower after two weeks of gains. How long will the correction last? There is no way to know but the S&P 500 should find some support in the 1210-1200 zone. As the S&P 500 nears 1200 we can turn up our focus on buying the dip!

-James

Current Portfolio:


BULLISH Play Updates

Alcoa Inc - AA - close: 13.96 change: -0.24

Stop Loss: 12.90
Target(s): 14.95, 15.95
Current Option Gain/Loss: + 5.9%
Time Frame: 8 to 10 weeks
New Positions: Yes, but see below

Comments:
12/15 update: AA gave up about -1.7% and broke short-term support at $14.00. We've been expecting a pull back toward the $13.60-13.50 area. It looks like that correction has begun. I would wait for a dip near $13.60 before considering new positions. (If we do see another entry point we might consider buying some 2011 call options).

Current Position: Long AA stock @ 13.18

Entry on November 16 at $13.18
Earnings Date 01/10/11 (unconfirmed)
Average Daily Volume: 26.1 million
Listed on November 6th, 2010


Alaska Air Group - ALK - close: 56.59 change: +0.25

Stop Loss: 54.90
Target(s): 59.75
Current Option Gain/Loss: + 3.0%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
12/15 update: ALK was showing relative strength again. The stock bounced from the $56.0 level to post a +0.4% gain. The XAL airline index lost -1.4%. I am still concerned that the XAL's breakdown under its 50-dma is a bearish warning signal for ALK. Cautious traders may want to exit ALK now. I am not suggesting new bullish positions at this time.

Current Position: Long ALK stock @ $54.91

- or -

Long the 2011 January $60 calls (symbol: ALK1122A60) entry @ $1.60

Entry on November 22 at $54.91
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 331 thousand
Listed on November 20th, 2010


American Express - AXP - close: 46.12 change: -0.17

Stop Loss: 41.95
Target(s): 47.50, 49.85
Current Option Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes, see trigger

Comments:
12/15 update: AXP has failed three days in a row under the $46.80 level. Aggressive traders could try an high-risk tactic and open bearish positions now with a stop loss just above $46.80 in an attempt to scalp a couple of points on a correction lower. I am suggesting the less risk adverse crowd just wait for the dip toward $44. We want to open bullish positions on a dip to $44.50.

Trigger @ $44.50 Suggested Position: Buy AXP stock at $44.50

- or -

Buy the 2011 April $45 calls (AXP1116D45)

Entry on December xx at $xx.xx
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 9.0 million
Listed on December 2nd, 2010


Popular Inc. - BPOP - close: 2.93 change: -0.08

Stop Loss: 2.69
Target(s): 3.40, 3.95
Current Option Gain/Loss: - 2.3%
Time Frame: 12 to 16 weeks
New Positions: Yes, see below

Comments:
12/15 update: I have been warning readers that BPOP might see a dip toward $2.90 and that occurred today. The stock's underperformance is a bit concerning but shares can be somewhat volatile. The $2.90 level and its rising 200-dma are both short-term support. This pull back looks like another bullish entry point. More cautious traders may want to wait and buy a bounce from here instead. Our first target is $3.40. Our second, much longer-term target is $3.90.

Current Position: Long BPOP stock @ $3.00

- or -

Long the 2011 April $3.00 calls (BPOP1116D3) Entry @ $0.34

Entry on December 14 at $ 3.00
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 11.7 million
Listed on December 11th, 2010


Companhia Brasileira de Distribuicao - CBD - close: 40.34 change: -0.47

Stop Loss: 36.75
Target(s): 44.95, 49.00
Current Option Gain/Loss: + 0.2%
Time Frame: 10 to 12 weeks
New Positions: Yes, see below

Comments:
12/15 update: CBD followed the market lower and posted a -1.1% decline. A dip into the $40.00-39.00 zone would still be an entry point for me but cautious traders could wait. If the market really pulls back then CBD could test support near $38.00.

FYI: We have a wide stop because CBD can be so volatile. Bear in mind this is a higher-risk trade.

Current Position: Long CBD stock @ $40.25

Entry on November 23 at $40.25
Earnings Date 03/02/11 (unconfirmed)
Average Daily Volume: 608 thousand
Listed on November 20th, 2010


City National Corp. - CYN - close: 60.18 change: +0.18

Stop Loss: 54.75
Target(s): 60.00, 64.00
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/15 update: CYN managed to post a gain but shares produced a failed rally intraday. There is no change from my prior comment. We want to see a correction in this stock. The plan is to wait for a dip to $57.00. FYI: The Point & Figure chart is bullish with a $77 target.

Trigger @ $57.00

Suggested Position: buy CYN stock @ $57.00

- or -

Buy the 2011 February $60 calls (cyn1119B60)*

*Caution: most of the option spreads on CYN seem a little too wide. I consider the options a more aggressive trade. You may want to keep your position size small.

Entry on December xx at $xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 223 thousand
Listed on December 4th, 2010


JB Hunt Transport Services - JBHT - close: 39.29 change: -0.53

Stop Loss: 36.75
Target(s): 40.70, 43.75
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
12/15 update: The correction in JBHT got a little help this morning after the stock was downgraded to a "hold". Shares opened at $39.07. I am expecting a pull back into the $38.00-37.00 region. Currently our plan is to open bullish positions at $38.00.

FYI: A week ago the NASDAQ announced they were removing JBHT from the NASDAQ-100 index and this removal takes place on Dec. 20th. Firms should start selling shares of JBHT to make room for those stocks being added to the index.

Trigger to buy the dip at $38.00

Suggested Position: Buy JBHT stock @ 38.00

- or -

Buy the 2011 February $40 calls (JBHT1119B40)

Entry on December xx at $xx.xx
Earnings Date 01/28/11 (unconfirmed)
Average Daily Volume: 1.2 million
Listed on December 13th, 2010


Microsoft Corp. - MSFT - close: 27.85 change: +0.23

Stop Loss: 25.45
Target(s): 27.45, 29.00
Current Gain/Loss: + 9.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
12/15 update: The relative strength in MSFT is impressive but I wouldn't chase it. The stock managed to gain +0.8% and closed at new six-month highs. I am still concerned that MSFT is short-term overbought. I'm not suggesting new bullish positions at current levels.

Current Position: Long MSFT stock @ 25.55

- or -

Buy the 2011 January $25.00 calls (symbol: MSFT1122A25) Entry @ $1.39

12/14/10 Target hit @ 27.45 (+7.4%), option @ $2.55 (+83.4%)
12/11/10 New stop @ 25.45
11/29/10 New stop @ 24.70

Entry on November 17 at $25.55
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 68.4 million
Listed on November 15th, 2010


Starbucks Corp. - SBUX - close: 31.87 change: -0.24

Stop Loss: 29.90
Target(s): 34.75
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
12/15 update: SBUX is slowly sinking. Shares should have support near $31.00 and near $30.00. We have a trigger to launch bullish positions at $31.25. If triggered our first target is $34.75.

FYI: SBUX is currently in a legal battle with Kraft Foods (KFT) over distribution of SBUX's ground coffee brand but investors seem to be ignoring it.

Trigger @ $31.25

Suggested Position: Buy SBUX stock @ $31.25

- or -

Buy the 2011 January $32.00 call (SBUX1122A32)
Buy the 2011 April $33.00 call (SBUX1116D33)

Entry on December xx at $xx.xx
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 7.1 million
Listed on December 8th, 2010


SAKS Inc. - SKS - close: 11.45 change: -0.15

Stop Loss: 10.90
Target(s): 13.95, 14.95
Current Option Gain/Loss: - 4.2%
Time Frame: 10 to 12 weeks
New Positions: No

Comments:
12/15 update: The action in SKS wasn't very healthy today. The odds of us getting stopped out just jumped on us. SKS should still have some support at $11.00 and its 50-dma, also near $11.00. Yet if the market sees any serious pull back we could easily get stopped out on an intraday spike lower. I am not suggesting new bullish positions at this time.

Suggested Position: Long SKS stock @ $11.98

- or -

Buy the 2011 February $12.50 calls (SKS1119B12.5) Entry @ $0.65

Entry on December 13 at $11.98
Earnings Date 02/22/11 (unconfirmed)
Average Daily Volume: 3.1 million
Listed on December 11th, 2010


Sara Lee Corp - SLE - close: 16.15 change: -0.11

Stop Loss: 14.70
Target(s): 17.00, 17.90
Current Option Gain/Loss: + 3.0%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
12/15 update: It was a quiet day for SLE. The stock hit a new relative high intraday but pared its gains to close in the red. Shares look a little overbought and a correction back toward support near $15.50 would not surprise me.
FYI: the Point & Figure chart is suggesting a long-term bullish target of $32 for SLE.

Current Position: Long SLE stock @ $15.68

- or -

Long the 2011 April $15.00 calls (SLE1116D15) Entry @ $1.35

Entry on December 8 at $15.68
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume: 7.6 million
Listed on December 7th, 2010


Sony Corp. - SNE - close: 35.65 change: +0.02

Stop Loss: 33.45
Target(s): 36.50, 39.00
Current Option Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes, see trigger

Comments:
12/15 update: There is no change from my previous comments on SNE. We want to open bullish positions on a dip at $34.50.

Trigger @ $34.50

Suggested Position: Buy SNE stock
- or -
Buy the 2011 APRIL $35 calls (SNE1116D35)

Entry on December xx at $xx.xx
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume: 888 thousand
Listed on November 23rd, 2010


Trimble Navigation - TRMB - close: 39.79 change: -0.97

Stop Loss: 36.40
Target(s): 41.00, 43.00
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
12/15 update: We've been expecting this pull back in TRMB. The stock should have support near $38.00. Our plan is to open bullish positions at $38.50.

Trigger @ $38.50

Suggested Position: Buy TRMB stock @ $38.50

- or -

Buy the 2011 February $40.00 calls (TRMB1119B40) current ask $2.35

Entry on December xx at $xx.xx
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume: 435 thousand
Listed on December 4th, 2010


Ternium S.A. - TX - close: 39.12 change: -0.46

Stop Loss: 35.85
Target(s): 43.00, 45.00
Current Option Gain/Loss: unopened
Time Frame: 12 to 14 weeks
New Positions: Yes, see trigger

Comments:
12/15 update: TX lost -1.1% on Wednesday. We are expecting a correction back toward the $38-37 zone. I am suggesting we buy this stock on a dip at $38.25. If triggered we'll use a stop loss at $35.85. Our targets are $43.00 and $45.00. Keep in mind that it could take several weeks for TX to hit these targets.
FYI: The Point & Figure chart for TX is forecasting a bullish target of $48.

Buy-the-Dip Trigger @ $38.25

Suggested Position: Buy TX stock

Note: TX does have options but the spreads are horrendously wide so I'm not suggesting any calls on this trade.

Entry on December xx at $xx.xx
Earnings Date 02/23/11 (unconfirmed)
Average Daily Volume: 295 thousand
Listed on December 14th, 2010


Wells Fargo & Co - WFC - close: 29.79 change: -0.03

Stop Loss: 27.90
Target(s): 29.25, 31.90
Current Option Gain/Loss: +10.8%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
12/15 update: Profit taking in WFC was very mild today. There is no change from my prior comments. If you're looking for a new entry point I would wait for WFC to pull back and redefine short-term support. That support might be $29.25 or it could be the 200-dma near $28.00. Our final target to exit is $31.90.

Current Position: Long WFC stock @ $26.88

- or -

Long the 2011 January $27.50 call (WFC1122A27.5) Entry @ $1.16

12/09: New stop loss @ $27.90
12/08: Target Hit $29.25 (+8.8%), Option @ $2.30 (+98.2%)

Entry on November 30 at $26.88
Earnings Date 01/19/11 (unconfirmed)
Average Daily Volume: 32.7 million
Listed on November 29th, 2010


World Wrestling Entertainment - WWE - close: 14.25 change: -0.20

Stop Loss: 13.75
Target(s): 14.95, 16.40
Current Option Gain/Loss: + 1.0%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
12/15 update: Widespread market weakness pushed WWE to a -1.3% loss. Shares erased Tuesday's gain. The stock could pull back to test support near $14.00 and its 50-dma. Readers may want to wait for that dip (near $14.00) before considering new bullish positions.

Suggested Position: Long WWE stock @ $14.10

- or -

Buy the 2011 April $15.00 calls (WWE1116D15), entry @ $0.45

*Note: The call options on WWE have very large spreads, making them a higher-risk trade.

Entry on December 13 at $14.10
Earnings Date 02/10/11 (unconfirmed)
Average Daily Volume: 242 thousand
Listed on December 9th, 2010


CLOSED BULLISH PLAYS

Peir 1 Imports - PIR - close: 10.38 change: -0.03

Stop Loss: 10.24
Target(s): 11.90
Current Option Gain/Loss: + 1.3%
Time Frame: 10 to 12 weeks
New Positions: No

Comments:
12/15 update: Yesterday I warned readers to play defensive on PIR and exit today at the closing bell. Shares ended at $10.38 near their 10-dma. We wanted to exit today to avoid holding over earnings tomorrow. I would still keep PIR on your watch list just in case we see another entry point in the next couple of weeks.

Current Position: Long PIR stock @ $10.24, exit @ 10.38 (+1.37%)

- or

Buy the 2011 March $10.00 calls (PIR1119C10) Entry @ $1.55, exit $1.30 (-16.1%)

chart:

Entry on December 2 at $10.24
Earnings Date 12/16/10 (confirmed)
Average Daily Volume: 2.3 million
Listed on December 1st, 2010