NEW DIRECTIONAL CALL PLAYS

Ultra-Short S&P 500 - SDS - close: 46.70 chg: -0.85 stop: 44.90

Why We Like It:
I did not find the bounce very convincing today and suspect the market will continue lower. I'm suggesting readers buy calls on the SDS, which is the ultra-short or double-short ETF on the S&P 500 index. Our first target to take profits is at $49.75. Our second target is $51.50. My time frame is less than four weeks (probably closer to two weeks).

Suggested Options:
I am suggesting the September calls. Strikes are available at $1.00 increments.

BUY CALL SEP 45.00 SSH-IS open interest=2472 current ask $3.50
BUY CALL SEP 48.00 SSH-IV open interest=2630 current ask $2.25
BUY CALL SEP 50.00 SSH-IX open interest=4659 current ask $1.65

Annotated Chart:

Picked on   August 18 at $ 46.70 
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =        38 million  
Listed on August 18, 2009         


NEW DIRECTIONAL PUT PLAYS

Ultra-Short Oil&Gas - DIG - close: 27.25 change: +0.51 stop: 29.10

Why We Like It:
Oil may have managed a bounce today but the short-term trend is still down. The DIG should have resistance near $28.00. I'm suggesting we take advantage of any short-term weakness in the oil stocks with puts on the DIG. Aggressive traders can launch positions now. I'm suggesting a trigger to buy puts at $27.75. Our first target is $24.50.

Suggested Options:
I am suggesting the September puts. Strikes are available at $1.00 increments.

BUY PUT SEP 28.00 DIC-UB open interest= 528 current ask $2.30
BUY PUT SEP 26.00 DIC-UZ open interest= 865 current ask $1.30
BUY PUT SEP 24.00 DIC-UX open interest= 715 current ask .70

Annotated Chart:

Picked on   August xx at $ xx.xx <-- TRIGGER @ 27.75
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =       5.9 million  
Listed on August 18, 2009