NEW DIRECTIONAL CALL PLAYS

Dow Jones Industrial (ETF) - DIA - close: 110.07 change: -4.19

Stop Loss: n/a
Target(s): 114.50,
Current Option Gain/Loss: Unopened
Time Frame: 2 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
A lot of investors and analysts were expecting the market to retest its lows from last week. I'll be honest. I wasn't expecting the retest to happen so soon. The market isn't quite there yet but it could be there soon.

We want to be ready to buy the dip. I am suggesting we buy calls on the DIA if this ETF hits $108.00. Cautious traders may want to wait and see if shares hit $107.00 or even $106.00 before initiating new trades. I am not listing a stop loss on this trade. We will need to use our position size to limit risk.

buy-the-dip @ $108.00

- Suggested Positions -

buy the SEP $110 call (DIA1117I110)

- or -

buy the SEP $112 call (DIA1117I112)

Annotated Chart:

Entry on August xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 15 million
Listed on August 18, 2011


SPDR S&P500 ETF - SPY - close: 114.51 change: -5.16

Stop Loss: n/a
Target(s): 119.75, 122.50
2nd Position: Current Option Gain/Loss: Sep.$118call unopened
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/18 update: We already have an active traded on the SPY. This is a new one.

We are going to ADD a new bullish position if the SPY hits $112.00 again. I'm listing this as a new play tonight but we'll consolidate both trades here in the play updates section tomorrow.

The plan is to buy the September $118 call if the SPY hits $112.00. More conservative traders could wait and see if the SPY dips to $111.00 or $110.50 instead as your entry point. We will not use a stop loss on this trade but you might consider a stop loss under $110.00.

Earlier Comments:
We are not using a stop loss on this trade.

- TRIGGER: buy-the-dip @ $112.00 - Suggested (SMALL) Positions -

Buy SEP $118 call (SPY1117I118)

08/18 adding a new entry point to buy the Sep.$118call at $112.00

chart:

Entry on August x at $---.--
Earnings Date --/--/--
Average Daily Volume = 235 million
Listed on August 6, 2011