Twice now the indexes have rolled rallied at the open and rolled over to give back all their gains. This is not a pattern I want to see repeated.

Now that the ADP report and the Challenger report have produced higher expectations for the non-farm payroll report on Friday you would think the markets would behave better. Could it be that we are moving from the possibility for an upside surprise to a greater potential for a downside surprise?

Keep those stops tight in case this comes to pass.


CALL Play Updates

MYGN - Myriad Genetics - $23.10, stop $22.50

Myriad fell with the rest of the biotech sector today after the high profile disappointment of the Pfizer/Medivation drug trial for Alzheimer's disease. MDVN lost 67% of its value after the press conference this morning. MDVN dropped -$27 to $13 at the close. Pfizer was not hurt as bad because they have five other Alsheimer's drugs in development. For Myriad this was a case of guilty by association. Maintain the stop at $22.50.

Exit Target = $25.00

Position: CALL MAY 25.00 (MYGN 10E2500) @ $1.05

Entry  on  March 1st at $ 23.01 
Change since picked:       + 0.09
Earnings Date            02/3/10 
Average Daily Volume =  1.62   million  
Listed on  February 28, 2010  


BUCY - Bucyrus International - $64.48, Stop $62.50 *NEW*

Joy Global (JOYG) spread joy throughout the mining community this morning when it raised estimates for 2010 by 20-cents and projected order rates to continue rising through the rest of the year. JOYG posted a 22% spike in new orders in the first quarter.

BUCY reported earnings on Feb 18th and reported a 24% jump in profits.

Exit Target = $68.00

Position: CALL APR 65.00 (BUCY 10D6500) @ $3.82

Entry  on  March 1st at $ 62.56 
Change since picked:       + 1.92
Earnings Date            02/18/10 
Average Daily Volume =  1.75   million  
Listed on  February 28, 2010         


VMW - VMWare - $50.76 *Not Triggered*

Why We Like It:
VM Ware is taking over computing. The rush to virtualize to obtain maximum use of all your servers is revolutionizing the data center. IDC believes only 20% of datacenters are fully converted leaving a whopping 80% as a growing market. As corporations enter the Windows 7 upgrade cycle they will be building out their server farms with the newer software to support all those Windows 7 desktops and that means large numbers of virtualized servers. VMW does not own the market and there are other competitors but they are the strongest and the lead dog in the harness. For those competitors following in their tracks the view is always the same.

VMW tried to move higher on Wednesday but the Nasdaq rolled over and gave back its gains and that knocked VMW back to negative territory as well. No change in play. We are still untriggered.

We have a $49.50 trigger on entering this trade.

Suggested Options:
I am recommending the July $55 Calls because VMW has just edged over $50 and even if we buy it on a dip the premiums are going to be high for the $50 options.

BUY CALL JUL 55.00 (VMW 10G55)
open interest= 198 current ask $3.30

Entry  on  March 2nd at $ xx.xx <-- TRIGGER @ $49.50
Change since picked:       + 0.00
Earnings Date            04/26/10 (unconfirmed)
Average Daily Volume =       1.75    million  
Listed on  March 1st, 2010         


Colgate Palmolive - CL - close: 83.86 change: +.00 stop: 82.50

No news, no gain, no change in play.

Our target to exit is $85.00.

Entry  on  February 20 at $ 81.75 
Change since picked:       + 1.72
Earnings Date            04/29/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  February 20, 2010         


TEVA Pharmaceuticals - TEVA - close: 60.20 change: -0.74 stop: 59.50

TEVA declined with the biotech sector to trade briefly under $60 but buyers came in at the close. TEVA garnered an upgrade from Citi and UBS on the generic ruling I detailed yesterday.

Our target to exit is $64.00.

Entry  on  February 20 at $ 58.74 
Change since picked:       + 1.88
Earnings Date            05/05/10 (unconfirmed)
Average Daily Volume =        5.1 million  
Listed on  February 20, 2010         


PUT Play Updates

SWI - Solar Winds - $18.45, change +.10, stop $19.25

Somebody is clearly sitting on SWI at the 18.50 level and they are not yet going lower. Note the flat top on the last three days of trading. The key here is whether that seller runs out of stock or gets tired of waiting and starts lowering the price.

Suggested Options:
I am looking for support to break and I am recommending the June $17.50 put. I wanted to recommend the April put but we don't normally recommend options with little or no open interest. The April cycle is new and it will need a week or so to develop open interest so I went with the June. I am going to list both but the official recommendation is the June strike.

First target = $17.00, second target = $14.00

Position: PUT APR 17.50 (SWI 10P1750) @ $ .75
Position: PUT JUN 17.50 (SWI 10R1750) @ $1.50 (recommended)

Chart:

Entry  on  March 3rd at $ 18.42 
Change since picked:     + 0.03
Earnings Date           02/8/10 
Average Daily Volume =  600K  
Listed on  March 2nd, 2010