Stocks were a little more subdued on Tuesday following Monday's bullish breakout.


CALL Play Updates

Arch Cap Group - ACGL - close: 70.90 change: +0.20 stop: 67.40

ACGL rallied toward its October highs and briefly traded to a new high for the year at $71.07 but failed to close over this resistance near $71.00. I remain bullish here but ACGL is trading at resistance so I'm not suggesting new positions at this time. Our target is the $74.00 level and our time frame is several weeks.

Picked on  November 07 at $ 68.81
Change since picked:       + 2.09
Earnings Date            10/26/09 (confirmed)
Average Daily Volume =        444 thousand 
Listed on  November 07, 2009         


Caterpillar - CAT - close: 59.88 change: -0.52 stop: 57.75

CAT suffered a little bit of profit taking on Tuesday but traders bought the dip at $59.00 near its rising 10-dma. I would use this intraday bounce as a new entry point to buy calls. Our first target to take profits is at $64.00. Our second target is $68.00.

Picked on  November 16 at $ 60.40
Change since picked:       - 0.52
Earnings Date            01/26/10 (unconfirmed)
Average Daily Volume =       11.3 million  
Listed on  November 16, 2009         


Canadian Nat. Res. - CNQ - close: 68.98 change: -0.17 stop: $63.95

CNQ garnered a new analyst upgrade this morning but shares failed to really move on the news. The stock dipped toward $68.00 before traders starting buying the pull back. This afternoon bounce looks like a new bullish entry point. I'm raising our stop loss to $64.90. 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:       + 1.24
Earnings Date            03/04/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  November 07, 2009         


Coach Inc. - COH - close: 34.48 change: -1.51 stop: 33.75

Our new play on COH is off to a shaky start. Shares gapped open higher on Monday, which negatively affected our entry point. The stock immediately started selling off on Monday morning and the selling continued on Tuesday. Shares managed an intraday bounce at $33.90. Volume was above average on today's decline, which is a bearish signal. I'd wait for a new rise over $35.50 or maybe even a close over $35.50 before initiating new bullish 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:       - 2.45
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =        4.9 million  
Listed on  November 14, 2009         


Chevron Corp. - CVX - close: 78.81 change: +0.20 stop: 76.75

Shares of CVX are still consolidating sideways. Yet if you look at the intraday chart the stock appears to be coiling for a bullish breakout higher. I would still consider new bullish positions here but readers might want to wait for a new high over $79.15 first (or consider waiting for a move over $80.00, which could also be psychological resistance). Our first target is $84.00.

Picked on  November 11 at $ 78.87 /gap higher entry point
Change since picked:       - 0.06
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =       10.6 million  
Listed on  November 10, 2009         


Deere & Co - DE - close: 49.15 change: +0.24 stop: 46.85

DE's intraday bounce from the $48.00 level looks like a new bullish entry point. More aggressive traders will want to seriously consider buying calls now. However, the $50.00 level remains significant resistance. I'm sticking to the plan and suggesting traders use a trigger at $50.25 to buy calls.

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         


Deckers Outdoor - DECK - close: 99.18 change: +0.23 stop: 96.95

There is no change from my Monday night comments on DECK. We're waiting for a breakout over round-number, psychological resistance at the $100 level. I'm suggesting a trigger to buy calls at $100.75. If triggered our first target is $107.50.

Picked on  November xx at $ xx.xx <-- TRIGGER @ 100.75
Change since picked:       + 0.00
Earnings Date            02/25/10 (unconfirmed)
Average Daily Volume =        659 thousand
Listed on  November 16, 2009         


Essex Property - ESS - close: 80.47 change: -2.74 stop: 78.90

Ouch! ESS just erased all of our gains with a 3.3% sell-off on Tuesday. I was unable to find any news to account for today's relative weakness. The $80 level should still offer some short-term support. Look for a rebound near $80.00 as a new bullish entry point. Our first target is $86.00. Our second target is $92.50.

Picked on  November 10 at $ 80.65
Change since picked:       - 0.18
Earnings Date            02/03/10 (unconfirmed)
Average Daily Volume =        500 thousand 
Listed on  November 09, 2009         


Gold ETF - GLD - close: 111.97 change: +0.34 stop: 104.90

Gold futures managed to shrug off any dollar strength today and closed higher. The GLD gained 0.3% to set a new closing high.

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:       + 9.69
                               /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: 56.09 change: -0.62 stop: 52.90

After yesterday's big bounce in PH the stock hit some profit taking today. The trend is still up but I hesitate to open new bullish positions at this time. 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:       + 1.09
Earnings Date            01/20/09 (unconfirmed)
Average Daily Volume =        1.6 million  
Listed on  November 03, 2009         


Waters Corp - WAT - close: 60.37 change: -0.48 stop: 58.75

WAT is still struggling with resistance in the $61 zone. 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: 48.59 change: +0.68 stop: 52.25

We're starting to see a little bit of an oversold bounce in NTRS. Look for shares to find some resistance in the $49.50-50.50 zone. Wait for the bounce to roll over before initiating new bearish trades. 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:       - 0.59 
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on  November 12, 2009         


Research In Motion - RIMM - close: 61.40 change: +0.13 stop: 65.26

RIMM tried to rebound this morning but spent the day drifting lower. The pattern is bearish but I hesitate to open new bearish trades with the market moving higher. 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:       - 0.40
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: 37.87 change: +0.08 stop: n/a

There is no change from my prior comments on the SSO. The trend is up but it's arguably short-term overbought here. 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:       + 0.79
Earnings Date            --/--/--
Average Daily Volume =         32 million  
Listed on  November 11, 2009         


CLOSED BULLISH PLAYS

UltraShort Treasury ETF - TBT - close: 45.45 change: -0.43 stop: 45.40

The TBT is beginning to roll over as bonds rebound higher. Shares of the TBT hit our stop loss at $45.40 closing this play. I'd probably keep TBT on your watch list for a breakout over the 200-dma or the $50.00 level.

Chart:

Picked on   October 26 at $ 47.89 (1/2 position)
Change since picked:       - 2.49 <--stopped $ 45.40 (-5.0%)

2nd entry on   October 30 at $ 45.50 (1/2 position)
Change since picked:          - 0.10 <-- stopped @ 45.40 (-0.00%)

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


Volatility Index - $VIX - close: 22.41 change: -0.48 stop: 21.90

Now that the market is in rally mode again there is a strong chance that the VIX will retreat toward $20.00. I'm suggesting an early exit now to cut our losses.

Chart:

Picked on  November 12 at $ 24.24 
Change since picked:       - 1.83 <-- exit early @ 22.41 (-7.5%)
Earnings Date            --/--/--
Average Daily Volume =         xx million  
Listed on  November 12, 2009