Editor's Note:
Stocks exploded higher as investors reacted to new out of Europe. EU leaders seem to have taken the worst case scenario off the table for now.

The S&P 500 index is up +3.4% just today and up almost +20% from its October lows. Stocks are definitely short-term overbought. If you're sitting on a gain readers may want to seriously consider taking profits early tomorrow.

I am suggesting we plan to exit our November calls on the UWM and XLF tomorrow morning. We also want to exit our MS positions at the open tomorrow.

-James

Current Portfolio:


BULLISH Play Updates

Adobe Systems - ADBE - close: 28.34 change: +0.53

Stop Loss: 26.75
Target(s): 29.50
Current Gain/Loss: +4.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/27 update: ADBE underperformed today. Shares rallied +1.9% versus a +3.3% gain in the NASDAQ. The stock might be struggling with technical resistance at its exponential 200-dma. Readers may want to consider an early exit now. We are raising our stop loss up to $26.75. I am not suggesting new positions at this time.

Current Position: Long ADBE @ 27.13

- or -

Long NOV $27 call (ADBE1119K27) Entry $1.27

10/27 new stop loss @ 26.75
10/26 new stop loss @ 25.95
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


Peabody Energy - BTU - close: 45.85 change: +4.25

Stop Loss: 41.75
Target(s): 47.00
Current Gain/Loss: +4.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/27 update: BTU had a huge day with the stock up +10.2% on Thursday alone. Unfortunately over half of that gain was the gap open higher this morning. Shares opened at $43.95, dipped to $43.00 and then surged toward $46.00. I am worried that BTU is short-term overbought (as well as the market being overbought). Conservative traders may want to take the money and run (exit now). The call option opened at $1.28 and already has a bid of $2.34 (+82.8%). You may want to exit now! I am not suggesting new positions at this time. We will raise our stop loss to $41.75.

Our exit target is $47.00.

Current Position: Long BTU stock @ $43.95

- or -

Long NOV $45 call (BTU1119K45) Entry $1.28

10/27 new stop loss @ 41.75
10/27 BTU gaps higher at $43.95 (up from 41.60).

Entry on October 27 at $43.95
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on October 26, 2011


Lowe's Companies - LOW - close: 21.90 change: +0.26

Stop Loss: 21.20
Target(s): 22.40
Current Gain/Loss: + 5.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/27 update: Warning! Traders need to be careful here. LOW underperformed today with a +1.2% gain versus +3.4% in the S&P 500. Shares could not get past technical resistance at the exponential 200-dma. Readers may want to go ahead and exit now. The option has a bid of $1.27 (+49%). The October 24th high was $22.48. I am lowering our exit target to $22.40. We will raise our stop loss up to $21.20.

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

10/27 new stop loss @ 21.20, adjusted target to $22.40
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


Morgan Stanley - MS - close: 19.41 change: +2.82

Stop Loss: 17.90
Target(s): 19.75
Current Gain/Loss: +12.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/27 update: MS was making headlines as one of the strongest performers today. Financials rallied on the EU news and shares of MS gapped open higher at $18.05 and soared to a +17% gain. The breakout past the 100-dma is bullish. I am suggesting we exit this trade immediately at the open tomorrow morning. We will raise our stop loss to $17.90.

(Small Positions)

Current Position: Long MS stock @ $17.30

- or -

Long NOV $18 call (MS1119K18) Entry $0.72

10/27 Prepare to exit immediately at the open tomorrow.
10/27 new stop loss @ 17.90

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: 41.43 change: +1.83

Stop Loss: 38.40
Target(s): 44.85
Current Gain/Loss: +1.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/27 update: PAY finally decided to join the market's rally higher. The stock gapped open at $40.65 and rallied to a +4.6% gain. Our plan was to launch bullish positions at $40.50 so the gap open triggered our play. Please note that I am raising our stop loss to $38.40.

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.

current Position: Long PAY stock @ $40.65

- or -

Long NOV $42 call (PAY1119K42) Entry $1.05

10/27 new stop loss @ 38.40
10/27 Trade opened. PAY gapped higher at $40.65

Entry on October 27 at $40.65
Earnings Date 12/01/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on October 13, 2011


Red Hat, Inc. - RHT - close: 51.11 change: +2.88

Stop Loss: 45.95
Target(s): 54.75
Current Gain/Loss: +4.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/27 update: RHT is breaking out to new all-time highs. Shares gapped higher at $48.94 and quickly hit our trigger to open positions at $49.05. The stock ended the session up +5.9% and above potential resistance at the $50.00 level. I wouldn't chase it here. Wait for a dip back near the $49 level, which should be new support.

FYI: The call option has almost doubled. Cautious traders may want to take profits now.

current Position: Long RHT stock @ 49.05

- or -

Long NOV $50 call (RHT1119K50) Entry $1.20

10/27 trade opened at trigger $49.05

Entry on October 27 at $49.05
Earnings Date 12/21/11 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on October 26, 2011


Ultra (long) Russell 2000 ETF - UWM - close: 37.82 chg: +3.57

Stop Loss: 35.75
Target(s): 39.00
Current Gain/Loss: +13.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/27 update: Small caps are surging higher and the UWM rallied +10.4% today. Readers will want to seriously consider taking profits and exiting now. The high this afternoon was $38.34. Our exit target is $39.00. I am raising our stop loss to $35.75.

NOTE: I am suggesting we exit our Nov. $35 calls at the open tomorrow. Current bid is $3.70 (+117.6%).

(Small Positions)

Suggested Position: Long UWM stock @ 33.25

- or -

Long NOV $35 call (UWM1119K35) Entry $1.70

10/27 prepare to exit Nov. $35 calls at the open tomorrow
10/27 new stop loss @ 35.75
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: 14.04 change: +0.79

Stop Loss: 13.25
Target(s): 14.45
Current Gain/Loss: +10.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/27 update: Readers may want to take profits on our XLF trade now. This ETF gapped open higher at $13.89 and rallied toward its exponential 200-dma before stalling. Our final exit target is $14.45 but I am suggesting we go ahead and exit our November $13.00 calls at the opening bell tomorrow. The bid on these calls is up to $1.19 (+183.3%).

Please note our new stop loss at $13.25. I am not suggesting new positions at this time.

current Position: Long XLF @ $12.71

- or -

Long NOV $13 call (XLF1119K13) $0.42

10/27 plan to exit Nov. $13 calls at the open tomorrow
10/27 new stop loss @ 13.25
10/20 trade opened. XLF at $12.71
10/19 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.


CLOSED BULLISH PLAYS

Autodesk, Inc. - ADSK - close: 35.62 change: +2.88

Stop Loss: 30.45
Target(s): 33.80
Current Gain/Loss: +11.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/27 update: ADSK outperformed in a big way. The stock gapped open higher at $33.54 and hit $36.35 intraday. At its high the stock was up +11% for the session. ADSK closed with a +8.7% gain. Our exit target was hit at $33.80.

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, exit $33.80 (+11.7%)

- or -

NOV $32 call (ADSK1119K32) Entry $1.60, exit $3.50 (+118.7%)

10/27 target hit at $33.80
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

chart:

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