NEW DIRECTIONAL PUT PLAYS

S&P500 ETF - SPY - close: 154.14 change: -0.97

Stop Loss: 155.65
Target(s): 149.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market's up trend is in serious jeopardy. The bullish breakout to new highs last week has reversed. Now the SPY is has broken down below technical support at its simple 50-dma. It still has some price support in the $153.50-154.00 area. If the SPY continues to break down the sell-off will likely accelerate.

I am suggesting a trigger to buy puts at $153.40. If triggered our target is $149.00. More conservative traders may want to exit near $150.00 instead. Please note that there are several short-term options for the SPY. Make sure you pick the right option symbol. May's option expiration is May 17th. The open interest on the option we selected is over 330,000.

Trigger @ 153.40

- Suggested Positions -

buy the May $150 PUT (SPY1318Q150) current ask $1.52

Annotated Chart:

Weekly Chart:

Entry on April -- at $---.--
Average Daily Volume = 130 million
Listed on April 18 2013


Vulcan Materials - VMC - close: 46.03 change: -1.70

Stop Loss: 47.55
Target(s): 40.25
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings in early May
New Positions: Yes, see below

Company Description

Why We Like It:
VMC makes building materials. Unfortunately the U.S. and global economies appear to be slowing down, which would suggest a slow down in building and construction and thus demand for materials. The stock fell sharply on the recent U.S. homebuilder confidence poll, which has been turning lower.

Shares of VMC are in a bearish trend of lower highs and lower lows and recently broke down below its simple 200-dma. The stock is currently testing potential support at its simple 300-dma (near today's low). Monday's low was $45.42. I am suggesting a trigger to buy puts at $44.90. If triggered our target is $40.25. However, keep in mind that VMC is scheduled to report earnings in early May (not date yet) and we will plan to exit prior to the announcement.

Trigger @ 44.90

- Suggested Positions -

buy the May $45 PUT (VMC1318Q45) current ask $1.60

Annotated Chart:

Weekly Chart:

Entry on April -- at $---.--
Average Daily Volume = 581 thousand
Listed on April 18 2013