CALL Play Updates

Arch Cap Group - ACGL - close: 70.70 change: +0.75 stop: 67.40

The market's rally helped ACGL manage a 1% gain but it was not enough to breakout over resistance near $71.00 and its October highs. Our target is the $74.00 level and our time frame is several weeks.

Picked on  November 07 at $ 68.81
Change since picked:       + 1.89
Earnings Date            10/26/09 (confirmed)
Average Daily Volume =        444 thousand 
Listed on  November 07, 2009         


Canadian Nat. Res. - CNQ - close: 69.15 change: +2.40 stop: $63.95

Resource names were stronger on the weak dollar. Shares of CNQ gapped open higher at $68.15 and closed with a 3.5% gain. The stock is now back above its 50-dma but has yet to close above round-number resistance at $70.00. Our upside target is $74.00. If you are holding November calls we have to exit before Friday's closing bell.

Picked on  November 09 at $ 67.74 *gap open higher entry
                          /original trigger was $66.05
Change since picked:       + 1.41
Earnings Date            03/04/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  November 07, 2009         


Coach Inc. - COH - close: 35.99 change: +0.43 stop: 33.75

It was a disappointing session for us even though COH posted a gain today. The stock was upgraded by Goldman Sachs this morning and shares gapped open higher at $36.93. COH was unable to hold on to these highs and trimmed its gains to just 1.2%. Sadly the gap open this morning negatively impacted our entry point. I'm still bullish on COH but readers may want to look for a dip near $35.50-35.00 to open positions.

Our first target is $38.00. Our second target is $39.85. My time frame is a few weeks. FYI: Traders should note that this week will bring several high-profile earnings reports in the retail sector. That could create volatility for stocks in this industry.

Picked on  November 14 at $ 36.93 /gap open higher
                               /originally listed at $35.56
Change since picked:       - 0.94
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =        4.9 million  
Listed on  November 14, 2009         


Chevron Corp. - CVX - close: 78.61 change: +1.35 stop: 76.75

Crude oil delivered a strong surge higher on the weak dollar but CVX under performed the commodity. Oil rose more than 3%. CVX only managed a 1.7% gain. Shares do look poised to continue higher and I would initiate new call positions here. More conservative traders might want to wait for a breakout over $80.00 to buy calls. Our first target is $84.00.

Picked on  November 11 at $ 78.87 /gap higher entry point
Change since picked:       - 0.26
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =       10.6 million  
Listed on  November 10, 2009         


Deere & Co - DE - close: 48.91 change: +1.33 stop: 46.85

The widespread market rally was enough to lift DE to resistance near $50.00 but not enough to push the stock through this level. We're still waiting for a breakout. I'm suggesting a trigger to open positions at $50.25. If triggered our first target is $54.90. Our second target is $59.00. Keep in mind that we'll plan to exit ahead of DE's earnings report later in the month. More aggressive traders willing to hold over DE's earnings report will want to consider January 2010 calls.

Picked on  November xx at $ xx.xx <-- TRIGGER @ 50.25
Change since picked:       + 0.00
Earnings Date            11/25/09 (unconfirmed)
Average Daily Volume =        6.2 million  
Listed on  November 09, 2009         


Essex Property - ESS - close: 83.21 change: +1.65 stop: 78.90

ESS rallied 2% to close at new eight-week highs. I don't see any changes from my weekend comments. More conservative traders may want to edge their stops closer to $80.00. I would consider buying calls on another bounce from $80.00 but readers may want to wait for the S&P 500 to breakout over the 1100 level first. Our first target is $86.00. Our second target is $92.50.

Picked on  November 10 at $ 80.65
Change since picked:       + 2.56
Earnings Date            02/03/10 (unconfirmed)
Average Daily Volume =        500 thousand 
Listed on  November 09, 2009         


Gold ETF - GLD - close: 111.63 change: +1.89 stop: 104.90 *new*

Dollar weakness continues to fuel gold strength. Gold futures hit a new all-time high near $1,135 an ounce today. The GLD hit $112.16 intraday.

I am raising our stop loss on this play to $104.90. I'm not suggesting new bullish positions at this time. Any November positions need to be closed before expiration this week. The newsletter's remaining position are the January $110 calls. Our second target to exit is $119.00. Our time frame is still several weeks.

Picked on   October 06 at $102.28
Change since picked:       + 9.35
                               /1st target hit @ 109.50 (+7.0%)
Earnings Date            00/00/00
Average Daily Volume =       14.2 million  
Listed on   October 06, 2009         


Parker Hannifin - PH - close: 56.96 change: +1.96 stop: 52.90

PH finally decided to participate in the rally and shares gained 3.5%. Holders of November calls need to exit before expiration this week.

Our first target is $58.50. We will cautiously set a second target at $62.00 but the $60.00 level could prove to be strong resistance. I would use small positions.

Picked on  November 03 at $ 55.25
Change since picked:       + 1.71
Earnings Date            01/20/09 (unconfirmed)
Average Daily Volume =        1.6 million  
Listed on  November 03, 2009         


UltraShort Treasury ETF - TBT - close: 45.88 change: -1.14 stop: 45.40

Everything rallied today. Stocks, commodities, bonds all turned higher and that sent bond yields lower. The TBT lost 2.4% and almost hit our stop loss at $45.40. A bounce from here would technically be a bullish entry point but there are probably stronger bullish candidates than the TBT now that the S&P 500 has closed over the 1100 level. I'm not suggesting new positions.

Our first target is $54.50. Our second target is $58.50. Our time frame is several weeks (possibly year end).

Picked on   October 26 at $ 47.89 (1/2 position)
Change since picked:       - 2.01

2nd entry on   October 30 at $ 45.50 (1/2 position)
Change since picked:          + 0.38

Earnings Date            --/--/--
Average Daily Volume =        6.0 million  
Listed on   October 26, 2009         


Volatility Index - $VIX - close: 22.89 change: -0.47 stop: 21.90

Typically traders get more complacent with a rising market and that pushes volatility lower. The VIX is in danger of breaking down under the 22.00 level. I'm not suggesting new bullish positions at this time and more conservative traders will want to strongly consider an early exit right here.

Our exit target is $30.00. This should be a relatively quick trade. I'm suggesting small positions.

Picked on  November 12 at $ 24.24 
Change since picked:       - 0.88
Earnings Date            --/--/--
Average Daily Volume =         xx million  
Listed on  November 12, 2009         


Waters Corp - WAT - close: 60.85 change: +0.13 stop: 58.75

The action in WAT today was disappointing. Shares did not participate in the market rally and failed near the $61.50 level. We're still waiting for a move higher with a trigger to buy calls at $61.50. If triggered our first target is $64.90. We'll cautiously set a secondary target at $67.45.

Picked on  November xx at $ xx.xx <-- TRIGGER @ 61.50
Change since picked:       + 0.00
Earnings Date            01/27/10 (unconfirmed)
Average Daily Volume =        1.2 million  
Listed on  November 12, 2009         


PUT Play Updates

Northern Trust - NTRS - close: 47.91 change: -0.13 stop: 52.25

NTRS did not participate in the market's rally and posted another loss. While this relative weakness is encouraging I'm not suggesting new positions. Our first target to take profits is at $45.25. Our second target is $41.00. The Point & Figure chart is bearish with a $39.00 target.

Picked on  November 12 at $ 49.18
Change since picked:       - 1.27 
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on  November 12, 2009         


Research In Motion - RIMM - close: 61.27 change: -1.42 stop: 65.26

I am very surprised by the weakness in RIMM today. With the entire market higher I would have expected shares to follow the NASDAQ upward. The only news I could find was an analyst firm starting coverage on RIMM with a hold. That shouldn't be a reason for the stock to lose 2.2% on an up day in the market. I would hesitate to launch new positions now with the market in rally mode. Our first target is $55.25. Our second target is $50.50. RIMM can be a volatile stock so I'm suggesting smaller position sizes.

Picked on  November 16 at $ 61.80
Change since picked:       - 0.53
Earnings Date            12/17/09 (unconfirmed)
Average Daily Volume =       18.9 million  
Listed on  November 12, 2009         


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.)

Ultra(Long)-S&P500 - SSO - close: 37.79 change: +1.06 stop: n/a

The S&P 500 is breaking out to new 2009 highs and the SSO is following in its shadow. I am not suggesting new positions at this time.

The options suggested for this strangle were the December $40 calls (SUC-LN) and the December $34 puts (SOJ-XH). Our estimated cost was $1.70. We want to sell if either option hits $3.00 or higher.

Picked on  November 11 at $ 37.08
Change since picked:       + 0.71
Earnings Date            --/--/--
Average Daily Volume =         32 million  
Listed on  November 11, 2009         


CLOSED BEARISH PLAYS

Baidu Inc. - BIDU - close: 438.32 change: +5.82 stop: 441.00

Shares of BIDU briefly traded above resistance near $440 and hit our stop loss at $441.00 before paring its gains. Our play has been closed but I find it interesting that BIDU was unable to close above resistance. I was suggesting very small positions for this high-risk trade.

Chart:

Picked on  November 12 at $427.15
Change since picked:       +13.85 <-- stopped @ 441.00 (+3.2%)
Earnings Date            02/18/09 (unconfirmed)
Average Daily Volume =        2.7 million  
Listed on  November 12, 2009         


Bank of Montreal - BMO - close: 49.31 change: +0.38 stop: 50.15

Shares of BMO are still trading under resistance at the $50.00 level but given the market's strength today I want to exit now and cut our losses early.

Chart:

Picked on   October 27 at $ 47.37
Change since picked:       + 1.94 <--exit early @ 49.31 (+4.0%)
Earnings Date            11/24/09 (unconfirmed)
Average Daily Volume =        539 thousand 
Listed on   October 27, 2009         


Russell 2000 iShares - IWM - close: 60.28 change: +1.55 stop: 60.55

The market's breakout higher today was not just in the big caps. The small cap Russell 2000 index broke through key resistance near 600 and its 50-dma. Shares of IWM did the same near the $60 level and hit our stop loss at $60.55.

Chart:

Picked on  November 09 at $ 59.00
Change since picked:       + 1.55 <-- stopped @ 60.55 (+2.6%)
Earnings Date            --/--/--
Average Daily Volume =       54.5 million  
Listed on  November 02, 2009