Editor's Note:

So far so good. We've been bearish on the market. I'm expecting a dip for the S&P into the 1050-1035 zone. Tomorrow could be volatile as investors react to the January non-farm payrolls (jobs) report that comes out at 8:30 a.m. before the market opens. Don't be surprised if stocks gap open up or down.

Like I said earlier, I am bearish but I didn't want to load a bunch of new put plays on the newsletter and see them get stopped out if stocks pop on the jobs number. A few stocks I'm watching as potential bearish plays are: FDX, FSLR, and GS.


NEW DIRECTIONAL PUT PLAYS

United Technology - UTX - close: 66.38 change: -1.86 stop: 69.05

Why We Like It:
UTX has spent the last few days consolidating sideways along technical support at the 100-dma. No longer! Shares reversed at the 10-dma this morning near $68.50 and broke down to new relative lows. This looks like an entry point to buy puts. Our target to take profits is $61.00, just above the simple 200-dma. Our time frame is just two or three weeks.

Keep in mind that UTX could gap open tomorrow morning as investors react to the jobs number. If shares gap open above $68.50 we will not open positions. If the stock gaps down below $65.00 we will not open positions.

Suggested Options:
I am suggesting the March $65 puts.

BUY PUT MAR 65.00 UTX1020O65 open interest=4446 current ask $1.93

Annotated Chart:

Entry  on  February 04 at $ 66.38 
Change since picked:       + 0.00
Earnings Date            04/21/10 (unconfirmed)
Average Daily Volume =        5.1 million  
Listed on  February 04, 2010