Editor's Note:
The S&P 500 index and NASDAQ composite index both gave back yesterday's gains with sharp losses today.

Readers may want to lock in gains early. The rest of the week could be challenging for the stock market.

-James

Current Portfolio:


BULLISH Play Updates

Adobe Systems - ADBE - close: 27.85 change: -0.35

Stop Loss: 25.45
Target(s): 29.50
Current Gain/Loss: +2.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/25 update: ADBE held up reasonably well after two big up days in a row. Shares could easily see some profit taking back down toward $27.00. More conservative traders might want to consider raising their stop loss. Our stop is at $25.45. I am not suggesting new positions at this time.

Current Position: Long ADBE @ 27.13

- or -

Long NOV $27 call (ADBE1119K27) Entry $1.27

10/20 new stop loss @ 25.45
10/18 new stop loss @ 25.35, today's bounce looks like an entry
10/14 ADBE gapped higher at $27.13

Entry on October 14 at $27.13
Earnings Date 12/15/11 (unconfirmed)
Average Daily Volume = 7.1 million
Listed on October 11, 2011


Autodesk, Inc. - ADSK - close: 32.37 change: -0.68

Stop Loss: 30.45
Target(s): 33.80
Current Gain/Loss: +6.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/25 update: After a bounce from $30.00 to $33.00 shares of ADSK were due for a little bit of profit taking. Look for short-term support near $32 and its 10-dma (near 31.70). I am not suggesting new positions at this time.

Earlier Comments:
The plan was to keep our position size small since ADSK is short-term overbought here.

*Small Positions*

current Position: Long ADSK stock @ 30.35

- or -

Long NOV $32 call (ADSK1119K32) Entry $1.60

10/24 new stop loss @ 30.45, adjust target to $33.80
10/20 ADSK provided another entry point on the dip to $30.00
10/15 new stop loss @ 29.75, adjusted target to $34.00

Entry on October 12 at $30.35
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 4.5 million
Listed on October 11, 2011


Bristol-Myers Squibb - BMY - close: 32.11 change: -0.42

Stop Loss: 31.95
Target(s): 33.50
Current Gain/Loss: +3.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/25 update: Warning! BMY only lost -1.2% today versus the -2.0% drop in the S&P 500 but shares of BMY look poised to breakdown. The stock has been churning sideways in a narrow range for days. Today's drop looks like a breakdown from the narrow, bullish channel higher. Cautious traders may want to exit immediately tomorrow morning. Currently our plan is to exit tomorrow at the closing bell to avoid holding over the earnings announcement on Thursday morning.

Our biggest risk right now is that BMY might gap open lower under our stop loss at $31.95 tomorrow.

current Position: Long BMY stock @ $31.15

- or -

Long 2012 Jan. $30 call (BMY1221A30) Entry $2.26

10/25 Remember, we want to exit tomorrow at the close
10/24 new stop loss @ 31.95
10/22 plan on exiting October 26th if not sooner
10/17 sold half 2012 Jan. $30 call open (bid) @ 2.90 (+28.3%)
10/15 new stop loss @ 31.75
10/15 Plan to take profits on the call, sell half on Monday
10/10 new stop loss @ 30.95
10/04 new stop loss @ 30.75
09/27 new stop loss @ 29.90
09/26 trade opened

Entry on September 26 at $31.15
Earnings Date 10/27/11 (confirmed)
Average Daily Volume = 13.6 million
Listed on September 22, 2011


Lowe's Companies - LOW - close: 21.51 change: -0.27

Stop Loss: 20.90
Target(s): 22.85
Current Gain/Loss: + 3.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/25 update: An analyst upgrade this morning was not enough to save LOW from the market-wide profit taking today. Shares lost -1.2%. The stock should have some short-term support near its 10 and 100-dma around $21.25. if that fails then the $21.00 level. I'd wait for a dip or a bounce near these levels before considering new positions.

Earlier Comments:
I would keep our position size small.

current Position: Long LOW stock @ 20.75

- or -

Long NOV $21 call (LOW1119K21) Entry $0.85

10/22 new stop loss @ 20.90
10/22 Cautious traders may want to take profits now
LOW +6.6%, Nov. $21 call +81%

Entry on October 10 at $20.75
Earnings Date 11/14/11 (confirmed)
Average Daily Volume = 16.7 million
Listed on October 08, 2011


MdDermott Intl. Inc. - MDR - close: 14.10 change: -0.68

Stop Loss: 13.95
Target(s): 17.90
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
10/25 update: Hmm.... MDR completely erased yesterday's gains with a -4.6% decline today. I do not see any changes from my prior comments. The stock is still trading inside the $13.50-15.00 trading range. I am suggesting a trigger to launch bullish positions at $15.15. If triggered our target is $17.90 since broken support at $18.00 should be resistance.

Earlier Comments:
I do have a few concerns with possible resistance at the simple 100-dma and the exponential 200-dma above. Plus, MDR is due to report earnings in the middle of November. Normally we do not want to hold over the earnings report. If we choose to exit ahead of earnings that's going to impact our time for this trade to work. FYI: The Point & Figure chart for MDR is bullish with a $24.50 target.

Trigger @ 15.15

Suggested Position: buy MDR stock @ $15.00

- or -

buy the NOV $15 call (MDR1119K15)

Entry on October xx at $ xx.xx
Earnings Date 11/08/11 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on October 24, 2011


Morgan Stanley - MS - close: 16.52 change: -0.63

Stop Loss: 15.45
Target(s): 19.75
Current Gain/Loss: - 4.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/25 update: Financial stocks were some of the worst performers today as investors reacted to news that EU finance ministers had canceled their meeting tomorrow. Shares of MS lost -3.6% and look headed for short-term support near $16.00.

I am not suggesting new positions at this time. Wait for a dip or a bounce from $16.00 before considering a new entry.

Earlier Comments:
Our target is $19.75 but I am concerned the 100-dma might be overhead resistance. FYI: The Point & Figure chart for MS is bullish with a $29 target.

(Small Positions)

Current Position: Long MS stock @ $17.30

- or -

Long NOV $18 call (MS1119K18) Entry $0.72

Entry on October 24 at $17.30
Earnings Date 10/19/11
Average Daily Volume = 42.8 million
Listed on October 22, 2011


VeriFone Systems - PAY - close: 39.26 change: -0.87

Stop Loss: 37.95
Target(s): 44.85
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
10/25 update: PAY rallied off its morning lows but couldn't quite hit $40.50. Shares made it to $40.47 and then rolled over. If stocks continue lower tomorrow then PAY has a good chance of falling toward the $38.00 level.

There is no change from my prior comments. Currently our plan is to open bullish positions at $40.50.

Earlier Comments:
We will aim for $44.85 as our exit target. More conservative traders may want to exit near the 200-dma. FYI: The Point & Figure chart for PAY is bullish with a $59 target.

Trigger @ 40.50

Suggested Position: buy PAY stock @ $40.50

- or -

buy the NOV $42 call (PAY1119K42)

Entry on October xx at $ xx.xx
Earnings Date 12/01/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on October 13, 2011


Staples Inc. - SPLS - close: 14.47 change: -0.62

Stop Loss: 14.35
Target(s): 16.75
Current Gain/Loss: - 4.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/25 update: Ouch! SPLS lost -4.1% today. Suddenly yesterday's breakout past resistance at $15.00 looks like a bull-trap pattern. The relative weakness in SPLS could have been a reaction to ODP's numbers today. Office Depot (ODP) reported earnings this morning and missed by one cent and missed the revenue estimate. Shares of ODP fell -9.8% today after a big move on Monday.

SPLS' close under its 10-dma, under its 100-dma, and under $14.50 is very short-term bearish. We have a stop loss at $14.35. Odds are good that if the U.S. market opens lower tomorrow that we'll see SPLS hit our stop loss.

FYI: OfficeMax (OMX) reports earnings on Thursday morning.

Earlier Comments:
Our target is %16.75. However, that might be a little optimistic. The exponential 200-dma could be resistance. Plus, SPLS has two rivals, OMX and ODP, both reporting earnings this week. Results from these companies could have a big impact on SPLS.

current Position: Long SPLS stock @ 15.11

- or -

Long NOV $16 call (SPLS1119K16) Entry $0.30

10/24 trade opened at $15.11 (trigger)

Entry on October 24 at $15.11
Earnings Date 11/15/11 (confirmed)
Average Daily Volume = 9.2 million
Listed on October 22, 2011


Ultra (long) Russell 2000 ETF - UWM - close: 33.09 chg: -1.94

Stop Loss: 29.85
Target(s): 39.00
Current Gain/Loss: -0.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/25 update: The UWM gave up nearly all of yesterday's gains. Yet broken resistance near $33 could offer some short-term support. Wait for the UWM to start bounce before considering new bullish positions. Levels I would watch are $33.00, $32.00 and $30.00.

(Small Positions)

Suggested Position: Long UWM stock @ 33.25

- or -

Long NOV $35 call (UWM1119K35) Entry $1.70

10/24 triggered @ 33.25

Entry on October 24 at $33.25
Earnings Date --/--/--
Average Daily Volume = 3.9 million
Listed on October 22, 2011


Financial Sector ETF - XLF - close: 13.02 change: -0.40

Stop Loss: 11.95
Target(s): 14.45
Current Gain/Loss: +2.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/25 update: The financial sector was one of the market's worst performers today. Lack of progress in Europe is the main problem. Plus, this group of stocks was arguably short-term overbought and due for some profit taking. Wait for signs of a bounce before considering new positions.

Earlier Comments:
Investors need to be aware that the XLF could see a HUGE move as the market reacts to news from the EU summit. That huge move could be up or down. If you are the hedging type then consider buying a put to protect yourself here.

current Position: Long XLF @ $12.71

- or -

Long NOV $13 call (XLF1119K13) $0.42

11/20 trade opened. XLF at $12.71
11/19 try again. New stop loss @ 11.95

Entry on October 20 at $12.71
Earnings Date --/--/--
Average Daily Volume = 125 million
Listed on October 18, 2011


BEARISH Play Updates

None. We do not have any active bearish trades.