Editor's Note:

I am urging caution right here. The market is flashing a confusing mix of signals. The jobs data on Friday was bearish and yet stocks closed positive. The recent bounce off the November lows has not been powered by strong volume, which is a concern if you're bullish on the market.

The larger trend is still up but I'm still very suspicious given the damage down back in October. The better trade may be to take a step back and wait for a day or two to see how things shake out. I'm offering a mix of bullish and bearish plays tonight.


NEW DIRECTIONAL CALL PLAYS

Arch Cap Group - ACGL - close: 68.81 change: +0.87 stop: 66.90

Why We Like It:
ACGL is a property and casualty insurance stock that's on the rise. Shares found support at their rising 50-dma twice last week. Friday's move looks like a bullish entry point, especially if you think the market continues to rise from here. More conservative traders may want to wait for a move over $69.00 first. Our target is the $74.00 level and our time frame is several weeks.

FYI: ACGL just recently announced a $1 billion stock buy back program.

Suggested Options:
I am suggesting the December calls. My preference is the $70 strike.

BUY CALL DEC 70.00 UOZ-LN open interest= 382 current ask $1.45

Annotated Chart:

Picked on  November 07 at $ 68.81
Change since picked:       + 0.00
Earnings Date            10/26/09 (confirmed)
Average Daily Volume =        444 thousand 
Listed on  November 07, 2009         


Canadian Nat. Res. - CNQ - close: 65.14 change: +1.78 stop: $61.95

Why We Like It:
The correction in CNQ has been pretty steep. The stock is trying to find support near $62 and Friday's move looks like a bullish reversal. I want to see some confirmation first. I'm suggesting readers use a trigger at $66.05 to buy calls. If triggered our target is $71.25. This should be a short-term two-week trade.

Suggested Options:
I'm suggesting the November options, which expire in two weeks. My preference is the $65 calls.

BUY CALL NOV 65.00 CNQ-KM open interest=1425 current ask $2.35

Annotated Chart:

Picked on  November xx at $ xx.xx <-- trigger @ 66.05
Change since picked:       + 0.00
Earnings Date            03/04/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  November 07, 2009         


NEW DIRECTIONAL PUT PLAYS

Whirlpool - WHR - close: 70.82 change: -3.03 stop: 74.10

Why We Like It:
WHR has been slowly sinking since it reversed under resistance near $80.00 back in October. Shares almost broke down under important support near $70 and its 50-dma on Friday. The rally looks tired and last week's unemployment data doesn't bode well for consumer spending.

I'm suggesting a trigger to buy puts at $69.75. If triggered our first target to take profits is at $65.25. Our second and final target is $61.50.

Suggested Options:
Aggressive traders could try November options, but they expire in two weeks. I'm suggesting December puts. My preference is the $70 strike.

BUY PUT DEC 70.00 WHR-XN open interest=1016 current ask $4.10

Annotated Chart:

Picked on  November xx at $ xx.xx <-- TRIGGER @ 69.75
Change since picked:       + 0.00
Earnings Date            02/09/10 (unconfirmed)
Average Daily Volume =        1.7 million  
Listed on  November 07, 2009