Editor's Note:
Worries over a meltdown in Italy, thanks to spiking bond yields, sent the market sharply lower. The S&P 500 index gave up -3.6% while the NASDAQ composite fell -3.8%. Financials were very weak with -5% declines (or more).

Readers will want to double check their stop loss placement so you're ready just in case the sell-off continues tomorrow.

We are not convinced yet that the market is actually reversing and this could just be a knee jerk reaction to rising troubles in Italy.

-James

Current Portfolio:


BULLISH Play Updates

Beazer Homes - BZH - close: 2.20 change: -0.16

Stop Loss: 1.75
Target(s): 3.25
Current Gain/Loss: +0.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/09 update: After yesterday's huge +16% move in BZH I am not surprised to see the stock hit some profit taking today (-6.7%). The intraday bounce this afternoon looks like a new bullish entry point. I would consider new positions if both BZH and the S&P 500 open positive tomorrow.

Earlier Comments:
We have listed a very high target at $3.25 but I anticipate scaling that down. This is sort of a just-in-case BZH delivers better than expected earnings and the stock explodes kind of target. This industry is very heavily shorted so a short squeeze is a definite possibility.

Please note we are going to take the unusual step and hold over BZH's earnings in November. Normally we try to always exit ahead of earnings to avoid holding over the announcement.

FYI: You could buy calls but the spreads are so wide they could actually increase your risk (but they'll definitely leverage any move higher).

current Position: Long BZH stock @ $2.19

- or -

Long 2012 Jan $3.00 call (BZH1221A3) Entry $0.15

Entry on October 31 at $2.19
Earnings Date 11/15/11 (confirmed)
Average Daily Volume = 2.4 million
Listed on October 29, 2011


Casey's General Stores - CASY - close: 50.93 change: -0.80

Stop Loss: 47.95
Target(s): 54.50
Current Gain/Loss: - 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/09 update: CASY actually held up pretty well today. The S&P 500 is down -3.6% but CASY only lost -1.5%. Of course the failed rally intraday under $52 doesn't look so hot. Odds are CASY is poised to retest the $50.00 level soon. Wait for the dip or a bounce near $50 as a new bullish entry point.

Earlier Comments:
FYI: The Point & Figure chart for CASY is bullish with a $70.00 target.

Current Position: Long CASY stock @ $51.19

- or -

Long DEC $50 call (CASY1117L50) Entry $2.90

11/08 new stop loss @ 47.95
11/08 trade opened.

Entry on November 08 at $51.19
Earnings Date 12/06/11 (unconfirmed)
Average Daily Volume = 250 thousand
Listed on November 5, 2011


CEMEX - CX - close: 4.34 change: -0.50

Stop Loss: 4.24
Target(s): 4.95
Current Gain/Loss: - 3.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/09 update: Ouch! CX has been so close to our final exit price the last couple of days. Then the market tanks on us and shares get hammered with a -10% loss. The breakdown under its simple 10-dma is definitely bearish since that has been consistent support the last few weeks. I am not suggesting new positions at this time.

current Position: Long CX stock @ $4.48

- or -

Long Jan $5 call (CX1221A5) Entry $0.45

11/07 new stop loss @ 4.24
11/05 new stop loss @ 3.97
11/03 CX gapped open to $4.48 (+6.3%)

Entry on November 3 at $ 4.48
Earnings Date 10/26/11
Average Daily Volume = 20.3 million
Listed on November 2, 2011


Dycom Industries - DY - close: 18.56 change: -0.93

Stop Loss: 18.40
Target(s): 22.25
Current Gain/Loss: - 6.1%
Time Frame: 6 to 8 weeks or until earnings.
New Positions: see below

Comments:
11/09 update: The action in DY today is definitely a turn for the worse. The -4.7% drop is a bearish breakdown from the recent sideways consolidation. The MACD on the daily chart has turned bearish. I would not be surprised to see DY dip toward the 50-dma or the $18.00 level but it would stop us out in the process.

I am not suggesting new positions at this time.

Earlier Comments:
FYI: The Point & Figure chart for DY is bullish with a $32.50 target.
NOTE: We will probably choose to exit ahead of the earnings report to avoid holding over the announcement in late November.

current Position: Long DY stock @ $19.78

- or -

Long DEC $20 call (DY1117L20) Entry $1.30

11/08 trade opened on DY's gap higher at $19.78.

Entry on November 08 at $19.78
Earnings Date 11/22/11 (unconfirmed)
Average Daily Volume = 379 thousand
Listed on November 5, 2011


Honeywell Intl. - HON - close: 52.83 change: -1.82

Stop Loss: 52.40
Target(s): 58.50
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/09 update: Hmm... there has been no follow through on yesterday's bullish breakout higher in HON. As a matter of fact today's close under the 200-dma and its 10-dma looks short-term bearish. Our trade was not open because HON gapped open lower.

The $52.00 level might offer some short-term support but I am not suggesting new positions at current levels. We will use a trigger at $54.25 to open bullish positions. More conservative traders can wait for a rally past $55.00 as their alternative entry point. I am adjusting our stop loss to $52.40.

Trigger @ 54.25

Suggested Position: buy the stock @ $54.25

- or -

buy the DEC $55 call (HON1117L55)

11/09 adjusted entry point strategy to Trigger @ 54.25, moved stop loss to $52.40

Entry on November xx at $ xx.xx
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 5.3 million
Listed on November 8, 2011


Healthstream Inc. - HSTM - close: 15.67 change: -0.78

Stop Loss: 14.80
Target(s): 18.00
Current Gain/Loss: - 0.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/09 update: HSTM just erased our unrealized gains with a drop back toward its simple 10-dma. If this stock and the S&P 500 can open positive tomorrow I would use it as a new bullish entry point. Please note that I am raising our stop loss up to $14.80.

Earlier Comments:
Our plan was to keep position sizes small to limit risk. Our target is $18.00. FYI: The Point & Figure chart for HSTM is bullish with a $17.50 target. NOTE: HSTM does have options but the spreads are too wide to trade.

(small positions)

current Position: Long HSTM @ $15.79

11/09 new stop loss @ 14.80
11/08 new stop loss @ 14.65
11/07 new stop loss @ 14.40
11/03 HSTM gapped open higher at $15.79

Entry on November 3 at $15.79
Earnings Date 10/24/11
Average Daily Volume = 134 thousand
Listed on November 2, 2011


IMAX Corp. - IMAX - close: 18.62 change: -1.04

Stop Loss: 17.70
Target(s): 24.50
Current Gain/Loss: - 3.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/09 update: The decline in IMAX today is starting to make the recent action look like a failed rally under resistance at $20.00 and its 100-dma. If stocks continue to sink tomorrow we could see IMAX test prior resistance and what should be new support near $18.00. If you're nimble enough a dip or a bounce from $18.00 could be used as a new bullish entry point.

Earlier Comments:
Our multi-week target is $24.50. Keep in mind that the exponential 200-dma could be resistance near $22.25ish. FYI: The Point & Figure chart for IMAX is bullish with a $28.00 target.

Current Position: Long IMAX @ $19.38

- or -

Long DEC $20 call (IMAX1117L20) Entry $1.27

Entry on November 3 at $19.38
Earnings Date 10/27/11
Average Daily Volume = 1.2 million
Listed on November 2, 2011


Juniper Networks - JNPR - close: 23.31 change: -1.32

Stop Loss: 21.90
Target(s): 29.00
Current Gain/Loss: - 1.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/09 update: JNPR pulled back toward the bottom of its recent trading range with a -5.3% drop today. The close under its 10 and 100-dma is short-term bearish. Yet we could see a bullish reversal higher tomorrow thanks to better than expected earnings results from rival CSCO released tonight. Both CSCO and JNPR are trading higher after hours.

I would use a rally past $24.00 as a new bullish entry point in JNPR.

The plan was to keep positions small to limit our risk.

(small positions)

current Position: Long JNPR stock @ $23.72

- or -

Long JAN $25 call (JNPR1221A25) Entry $1.50

11/02 trade is open. JNPR opened at $23.72
11/01 Try again. New strategy. Buy JNPR if stock and S&P500 opens positive tomorrow, stop loss @ 21.90.
11/01 trade opened at $23.46, stopped out @ 22.75 (-3.0% loss)
option opened @ $1.80, exit $1.36 (-24.4%)
10/29 alternative entry point: dip at $23.00

Entry on November 2 at $23.72
Earnings Date 10/18/11
Average Daily Volume = 13 million
Listed on October 29, 2011


Kodiak Oil & Gas - KOG - close: 7.18 change: -0.41

Stop Loss: 6.75
Target(s): 9.75
Current Gain/Loss: - 4.3%
Time Frame: two to three months
New Positions: see below

Comments:
11/09 update: After breaking out to new highs yesterday KOG was definitely a big target for profit taking today. The stock lost -5.4% and closed on its lows. Yet it settled on its rising 10-dma, the first line of technical support. Broken resistance near $7.00 should also offer some support and I would use a dip or a bounce near $7.00 as a new bullish entry point.

Earlier Comments:
Our multi-month target is $9.75. FYI: The Point & Figure chart for KOG is bullish with a $13.75 target.

current Position: Long the stock @ 7.51

- or -

Long 2012 MAR $7.50 call (KOG1217C7.5) Entry $1.25

11/08 trade opened at $7.51.

Entry on November 08 at $ 7.51
Earnings Date 03/05/12 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on November 5, 2011


Red Hat, Inc. - RHT - close: 48.67 change: -1.86

Stop Loss: 48.45
Target(s): 54.90
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
11/09 update: Our new trade on RHT is not open yet thanks to the stock's gap down this morning. RHT's -3.6% decline is in-line with the S&P's drop for the day. I am adjusting our entry point strategy on RHT. The high today was $50.02. I am suggesting we open small bullish positions of RHT can trade at $50.25. If triggered we'll use a stop loss at $48.45. We do want to keep our position size small to limit our risk. More conservative traders may want to wait for a breakout past the $51.00 level before initiating positions.

Trigger @ 50.25 (small positions)

Suggested Position: buy the stock @ $50.25

- or -

buy the DEC $52.50 call (RHT1117L52.5)

11/09 adjusted entry point strategy: Trigger @ 50.25, stop loss 48.45

Entry on November xx at $ xx.xx
Earnings Date 12/21/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on November 8, 2011


Financial SPDR ETF - XLF - close: 12.87 change: -0.74

Stop Loss: 12.59
Target(s): simple 200-dma
Current Gain/Loss: - 5.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
11/09 update: The spike in Italian bond yields raises the specter of widespread (bad) debt contagion in Europe. Greece, Ireland and Portugal all caved in and asked for a bailout when their bond yields hit 7%. Today Italy's 10-year bond yield surged past this key level. The bad news is that Italy is too big to bailout. At least that's the current thinking. The ECB could suddenly decide they're going to engineer a two trillion euro bailout but that seems unlikely. Therefore it is understandable that the financials were weak today but a Eurozone meltdown is not guaranteed just yet.

There are plenty of analysts suggesting investors avoid the financials due to potential risk of sovereign debt default. A few pundits are suggesting traders short the financials. I will admit that today's -5.4% drop in the XLF appears to have broken the trend of higher lows and it did breakdown under what could have been support near $13.00. I would point out that the XLF could find some support at its 30 or 50-dma (12.77 and 12.64, respectively). We will take a more aggressive approach here and adjust our stop loss to $12.59 so it's under the 50-dma. More conservative traders will want to consider an early exit now. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week target is the simple 200-dma (near $14.50ish) but there is potential resistance at the exponential 200-dma (closer to $14.00), not to mention possible resistance at the October highs. We want to keep our position size small!

(small positions)

current Position: Long the XLF @ $13.55

- or -

Long 2012 Jan $14 call (XLF1221A14) Entry $0.59

11/09 new stop loss @ 12.59
11/08 trade opened at $13.55
11/07 new strategy: Instead of buying a dip, I am suggesting we buy a rally with a trigger at $13.55. New stop loss $12.74. Target simple 200-dma.

Entry on November 08 at $13.55
Earnings Date --/--/--
Average Daily Volume = 137 million
Listed on November 3, 2011


Xilinx Inc. - XLNX - close: 31.95 change: -1.36

Stop Loss: 31.40
Target(s): 35.75
Current Gain/Loss: - 1.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/09 update: Semiconductor stocks were underperformers today. The SOX index lost -4.6%. Shares of XLNX fell -4.0%. Suddenly XLNX is facing what might be a bearish double top. I'm not ready to give up just yet but I am not suggesting new bullish positions at this time.

Earlier Comments:
The plan was to keep our position size small to limit risk. Our multi-week target is $35.75. FYI: The Point & Figure chart for XLNX is bullish with a $46 target.

(small positions)

Current Position: Long XLNX stock @ 32.50

- or -

Long Jan $35 call (XLNX1221A35) Entry $0.95

Entry on November 1 at $32.50
Earnings Date 10/19/11
Average Daily Volume = 5.0 million
Listed on October 29, 2011


BEARISH Play Updates

None. We do not have any active bearish trades.