The market suffers an overdue correction. Several stocks are nearing our entry points.

Editor's Note:

Tomorrow morning is shaping up to be another downer. RIMM reported earnings tonight after the bell. The company beat on the bottom line but revenues missed and management offered somewhat disappointing guidance. The stock was down more than $10 after hours trading between $73-74. HPQ offered some bullish comments as they reaffirmed their earnings guidance but the RIMM news and investors' reaction to it will surely pressure the market lower on Friday.


CALL Play Updates

Alcon Inc. - ACL - close: 140.35 change: -3.13 stop: 132.99

ACL gave up most of yesterday's gains with the market selling off. Shares did find some short-term support near $140 but I wouldn't bet on it holding. Wait and watch for a bounce near the $136-134 zone before considering new bullish positions. Our second target is $148.00.

Picked on September 10 at $136.75
Change since picked:       + 3.60
                             /1st target hit @ 142.50 (+4.2%)
Earnings Date            10/21/09 (unconfirmed)
Average Daily Volume =        299 thousand 
Listed on September 10, 2009         


Allegheny Tech. - ATI - close: 34.43 change: -1.03 stop: 30.99

Profit taking in ATI shaved off 2.9%. I'm still expecting a dip toward $32.00. Wait for a bounce before considering new positions. ATI has exceeded our first target. We're currently aiming for $37.00.

Picked on   August 31 at $ 30.25 *triggered         
Change since picked:      + 4.18
                               /1st target hit @ 33.85 (+11.9%)
Earnings Date           10/21/09 (unconfirmed)
Average Daily Volume =       2.7 million  
Listed on August 27, 2009         


Best Buy Inc. - BBY - close: 37.91 change: -0.39 stop: 36.45

The selling pressure in BBY was mild with a 1% decline. Shares are now testing their 50-dma. While I would be tempted to buy calls on a bounce from here readers may want to wait for a move over short-term resistance at $39.00 first. Our first target to take profits is at $41.40. Our second target 46.50. The Point & Figure chart is bullish with a $54 target.

Picked on September 21 at $ 38.45
Change since picked:       - 0.54
Earnings Date            12/16/09 (unconfirmed)
Average Daily Volume =        8.7 million  
Listed on September 21, 2009         


Caterpillar - CAT - close: 51.85 change: -1.29 stop: 47.49

Another day like today and CAT will hit our trigger to buy calls at $50.50.

If we are triggered at $50.00 our first target is $54.50. Our second target is $59.00. FYI: The P&F chart is bullish with an $85 target.

Picked on September xx at $ xx.xx <-- TRIGGER @ 50.50
Change since picked:       + 0.00
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =         10 million  
Listed on September 19, 2009         


CF Industries - CF - close: 86.63 change: -0.96 stop: 83.65 *new*

CF managed to bounce twice from the $85.75 region but I'm not convinced the profit taking is over. I am reluctant to do it but I'm moving the stop loss to $83.65 down from $84.75. I suspect CF will test $84.00 before moving higher again. More conservative traders may want to limit their risk by raising the stop toward today's low instead.

Our first target to take profits is at $92.50. Our second target is $98.00. FYI: The P&F chart has a quadruple-top bullish breakout buy signal with a $99 target.

FYI: Agrium (AGU) is trying to buy CF but CF keeps rejecting the offer calling it too late. At the same time CF is trying to buy Terra Industries (TRA) and TRA keeps rejecting the offer calling it too low. Eventually one of these companies is going to give up or they're finally going to make a big enough offer or somebody else might step in and start bidding. There is a risk that someone bids too much and the market could think they overpaid, which might push the stock lower. This M&A dance has been going on for months and it will probably continue for months so I'm not expecting it to have much short-term impact on the stock. However, it's worth noting that CF recently filed a lawsuit to force TRA to hold their annual shareholder meeting. This way CF can try and vote some members onto the board of directors.

Picked on September 05 at $ 85.93
Change since picked:       + 0.70
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        653 thousand 
Listed on September 05, 2009         


Core Labs - CLB - close: 100.37 change: -1.91 stop: 92.25

Profit taking in the oil stocks pushed the OSX oil services index to s 2.7% decline. CLB only lost 1.8%.

I'm suggesting a trigger to buy calls at $96.00 with a stop loss at $92.25. If triggered our first target is $104.00. Our second target is $109.50.

Picked on September xx at $ xx.xx <-- TRIGGER @ 96.00
Change since picked:       + 0.00
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        175 thousand 
Listed on September 23, 2009         


Compass Minerals - CMP - close: 59.35 chg: -0.29 stop: 54.75

CMP continues to hold up pretty well with traders buying the dip near $58.20 this morning. Momentum is definitely waning and a larger correction is due. I'm not suggesting new positions at this time. CMP has already hit our first target at $59.75. Our second and final target is $64.00. FYI: The Point & Figure chart has turned bullish with a $69 target.

Picked on September 03 at $ 55.55
Change since picked:       + 3.80
                               /1st target hit @ 59.75 (+7.5%)
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        415 thousand 
Listed on September 02, 2009         


Consol Energy - CNX - close: 45.38 change: -1.51 stop: 39.45

CNX is correcting as expected. Our plan is to buy calls on a dip into the $44.00-42.50 zone. More conservative traders can wait for the dip closer to $42.50-42.00.

If triggered our first target is $48.50. Our second target is $52.40. We'll plan to exit ahead of the late October earnings report. FYI: The Point & Figure chart is forecasting a $73 target.

Picked on September xx at $ xx.xx <-- TRIGGER 44.00
Change since picked:       + 0.00
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on September 19, 2009         


Danaher Corp. - DHR - close: 66.69 change: -1.07 stop: 63.95

The pull back in DHR continues. Watch for support in the $65-64 range. Wait for the bounce before considering new positions. I'm upping our stop loss to $63.95. Our first target is $69.50. The Point & Figure chart is bullish with a $77 target.

Currently we only have half a position open to limit our risk given the aggressive entry point.

Picked on September 05 at $ 66.37 (buy 1/2 position)
               /originally listed at $65.76, gap higher entry @ 66.37
Change since picked:       + 0.35
Earnings Date            10/15/09 (unconfirmed)
Average Daily Volume =        2.4 million  
Listed on September 05, 2009         


Diamond Offshore - DO - close: 91.64 change: -1.59 stop: 88.49

DO is slipping closer and closer to what should be support near $90.00 and its long-term trendline of higher lows. Wait for a bounce from $90.00 before launching new call positions. The plan was to use small position sizes.

We will take some money off the table at $99.90 (1st target). Our second target is $104.50. More aggressive traders can aim for $110. The P&F chart is forecasting a $114 target.

Picked on September 15 at $ 94.69 *adjusted entry point
Change since picked:       - 3.05
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        1.8 million  
Listed on September 12, 2009         


Flowserve - FLS - close: 97.51 change: -2.76 stop: 88.95

I am expecting a dip into the $95-92 zone. More cautious traders may want to raise their stops closer to $92.00. Our plan is to buy calls on a dip at $95.00.

If we are triggered our first target is $99.25. Our second target is $107.50. However, we will plan to exit ahead of the late October earnings report. FYI: The P&F chart is bullish with a $128 target.

Picked on September xx at $ xx.xx <-- TRIGGER @ 95.00
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        1.2 million  
Listed on September 19, 2009         


General Dynamic - GD - close: 62.28 change: -0.95 stop: 57.85

GD is starting to contract and I would not be surprised in the least to see a dip to $60.00. Right now our plan is to buy calls at $61.00. More conservative traders may want to wait and see if GD bounces from $60 first.

Our first target is $64.90. Our second target is $69.00. Investors with a longer-term time frame may want to aim a lot higher. GD has produced an inverse H&S pattern that is forecasting an $85

Picked on September xx at $ xx.xx <-- TRIGGER @ 61.00
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        2.3 million  
Listed on September 09, 2009         


Genesse & Wyoming - GWR - close: 31.20 change: -0.52 stop: 29.75 *new*

GWR continues to slip and we can look for a pull back close to $30.00. I'm adjusting our stop loss down 15 cents to make sure it's under the rising 50-dma. Our new stop is $29.75. Consider buying calls on a bounce from $30.00.

We've already taken profits once and our second target is $34.75. We want to use small position sizes to limit our risk.

Picked on   August 15 at $ 28.66 /gap down entry
                               /originally listed at $29.30
Change since picked:      + 2.54
                              /take profits 09/16/09 @ 32.45 (+13.2%)
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       230 thousand
Listed on August 15, 2009         


Grainger W.W. - GWW - close: 88.71 change: -0.69 stop: 87.40

This is an important test for GWW. The stock testing support nar its 50-dma and the $88.00 level. Technical indicators are suggesting that GWW will breakdown from here but if it does I'd watch for additional support near $85.00. I'm not suggesting new positions at this time. Our first target is $93.50. Our second target is $97.50.

Picked on September 1 at $ 86.00 *triggered  
Change since picked:      + 2.71
Earnings Date           10/14/09 (unconfirmed)
Average Daily Volume =       635 thousand 
Listed on August 22, 2009         


Intl. Bus. Mach. - IBM - close: 120.94 chg: +0.12 stop: 117.75

IBM managed enough strength to close in positive territory. Yet I expect shares will soon test the $120 mark. Wait for a bounce near $120 before considering new bullish positions. Our first target to take profits is at $126.00. Our second target is $129.75. We will plan to exit ahead of IBM's earnings report in mid October.

Picked on September 16 at $121.82
Change since picked:       - 0.88
Earnings Date            10/15/09 (unconfirmed)
Average Daily Volume =        5.3 million  
Listed on September 16, 2009         


iShares Financials - IYF - close: 52.06 change: -1.02 stop: 49.49

As expected the IYF is testing the $52.00 region. If the market continues to slip we can look for a pull back closer to $50.00. Wait for a bounce before considering new positions. Our first target is $57.00. Our second target is $60.00.

Picked on September 15 at $ 52.60 *triggered  
Change since picked:       - 0.54
Earnings Date            00/00/00
Average Daily Volume =        5.1 million  
Listed on September 01, 2009         


Mettler Toledo - MTD - close: 88.17 change: -2.52 stop: 87.49

The selling pressure in MTD the last day and a half has been pretty sharp with a plunge from almost $92 to $88. The $88.00 level should offer some support. A bounce from here can be used as a new entry point. MTD has already hit our first target at $93.50. Our second target is $99.00. I am labeling this an aggressive play because volume is pretty light for this stock.

Picked on   August 27 at $ 88.50 *triggered  (1/4 normal size)
Change since picked:      - 0.33
                             /1st target hit @ 93.50 (+5.6%)
Earnings Date           11/05/09 (unconfirmed)
Average Daily Volume =       234 thousand 
Listed on August 22, 2009         


NYSE Euronext - NYX - close: 28.44 change: -0.71 stop: 27.75

Today's dip to $28.08 in NYX looks like a new entry point. If you're not willing to buy calls on the late day bounce then look for a new move over $29.00. Our first target is $31.95. Our second target is $34.50.

Picked on September 22 at $ 29.82
Change since picked:       - 1.38
Earnings Date            10/30/09 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on September 22, 2009         


PPG Inds. Inc. - PPG - close: 58.52 change: -0.53 stop: 54.95

PPG still looks like it will dip toward $56.00. I'm not suggesting new positions at this time. PPG has already exceeded our first target and we're currently aiming for $63.00. The P&F chart is very bullish with a $90 target.

Picked on   August 28 at $ 55.65
Change since picked:      + 2.87
                             /1st target exceeded @ 60.05 (7.9%)
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       1.6 million  
Listed on August 27, 2009         


SPX Corp. - SPW - close: 63.20 change: -0.80 stop: 57.75

I am surprised that SPW has been able to hold the $62.00 level in spite of the market's recent downturn.

Currently our plan is to buy calls at $61.00. If triggered our first target is $64.95. Our second target is $68.75.

Picked on September xx at $ xx.xx <-- TRIGGER @ 61.00
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        570 thousand 
Listed on September 12, 2009         


SOHU.com Inc. - SOHU - close: 68.11 change: -2.42 stop: 63.25

Uh-oh! SOHU has produced a rather ugly looking bearish reversal pattern today. I am moving our trigger to buy calls from $67.50 down to $66.00 and more conservative traders may want to consider a trigger closer to $65.00 instead.

Our first target is $72.50. Our second target is $77.00.

Picked on September xx at $ xx.xx <-- TRIGGER @ 66.00
Change since picked:       + 0.00
Earnings Date            10/26/09 (unconfirmed)
Average Daily Volume =        577 thousand 
Listed on September 15, 2009         


Waters Corp. - WAT - close: 55.09 change: -0.39 stop: 49.30

I don't see any changes from my prior comments on WAT.

Currently the plan is to buy calls on a pull back at $53.50. If triggered our first target is $59.50. The P&F chart is bullish with a $69 target. We do not want to hold over the mid October earnings report.

Picked on September xx at $ xx.xx <-- TRIGGER 53.50
Change since picked:       + 0.00
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =        809 thousand 
Listed on September 12, 2009         


Wells Fargo - WFC - close: 28.45 change: -0.31 stop: 27.25

As expected WFC dipped near $28.00 and bounced. We can use this move as a new entry point. However, the S&P 500 still looks vulnerable. Readers may want to postpone opening new positions for another 24 hours to see how things look after Friday's session. Our first target is $32.50. Our second target is $34.75 but we may not have time. The plan is to exit ahead of the mid October earnings report.

Picked on September 22 at $ 29.39
Change since picked:       - 0.94
Earnings Date            10/14/09 (unconfirmed)
Average Daily Volume =         42 million  
Listed on September 22, 2009         


PUT Play Updates

*Currently we do not have any put play updates*


Strangle & Spread Play Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

Cigna Corp. - CI - close: 29.20 change: -1.14 stop: n/a

The correction in CI has taken it from $33.00 to $29.00 in five days. Shares tagged their 50-dma before bouncing. I'm not suggesting new positions at this time.

The options I suggested were the October $35 calls (CI-JG) and the October $25 puts (CI-VE). Our estimated cost was $1.20. We want to sell if either option hits $2.50 or higher. The closer we can open this trade to $30.00 the better.

Picked on September 08 at $ 29.40
Change since picked:       - 0.20
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 08, 2009         


CLOSED BULLISH PLAYS

Occidental Petrol. - OXY - close: 74.49 change: -1.86 stop: 74.75

Crude oil continued to sink after yesterday's bearish breakdown. The oil service stocks, always more volatile than the rest of the oil sector, fell sharply. OXY gave up 2.4% and hit our stop loss at $74.75 closing the play.

Chart:

Picked on   August 27 at $ 72.00 *triggered         
Change since picked:      + 2.75 <-- stopped @ 74.75 (+3.8%)
                    /1st target exceeded, gap higher @ 77.23 (+7.2%)
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       5.0 million  
Listed on August 26, 2009