Current Portfolio:


CALL Play Updates

ConocoPhillips - COP - close 54.75 change +0.02 stop 52.30

Target(s): 55.85, 56.90, 57.75
Key Support/Resistance Areas: 58.50, 57.00, 53.00 to 53.50
Current Gain/Loss: +2%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
9/11: Nothing has changed from my previous comments.

9/9: COP is consolidating above support, all of its moving averages, and is maintaining and upward trend line from 8/31. The broader market is at resistance and is probably due for a pullback so we may need to exhibit a little patience. However, if we breakout higher first I suggest readers be quick to take profits or tighten stops to protect them. I've adjusted the targets down slightly to account for this scenario.

Suggested Position: Buy November $57.50 CALL, entry was at $1.05

Annotated chart:

Entry on September xx
Earnings 10/28/2010 (unconfirmed)
Average Daily Volume: 8.9 million
Listed on September 4, 2010


Int'l Business Machines - IBM - close 127.99 change +1.63 stop 125.90 *NEW*

Target(s): 127.40 (hit), 128.90, 129.75
Key Support/Resistance Areas: 132.00, 128.00, 127.50, 123.00
Current Gain/Loss: +35%
Time Frame: 1 to 2 weeks
New Positions: No

Comments:
9/11: Our gain is currently +35% as our first target was hit on Friday, so taking at least some profits off of the table is probably the smart thing to do. We're going to raise the stop to below Friday's low and I'm also adding another target of 128.90. I suggest closing the trade at this target or trailing the stop up to see how much more you can get out of it.

9/9: IBM has traded to just below our first target in 3 of the past 4 sessions, but keeps getting smacked down near some moving averages and resistance at $127.50. The stock is making higher lows but hasn't been able to breakout. I've lowered the first target 35 cents and suggest we take profits or tighten stops at this level if it is reached tomorrow. I would rather book a profit than sit through a pullback. I've also tightened the stop to $124.25.

Current Position: Long October $130.00 CALL $1.92, entry was $1.50

Annotated chart:

Entry on September 1, 2010
Earnings 10/18/2010 (unconfirmed)
Average Daily Volume: 5.5 million
Listed on August 28, 2010


iShares Russell 2000 - IWM - close 63.72 change +0.20 stop 59.80

Target(s): 66.50, 67.75
Key Support/Resistance Areas: 68.00, 67.00, 64.50, 62.00
Time Frame: 2 to 4 weeks

Comments:
9/9 & 9/11: IWM is backing off from its 200-day SMA near $64.50. Our trigger to enter long positions at $62.50 is below the 50-day and above the 20-day moving averages. I like the long set-up, now we need to get triggered. More nimble traders may want to try to time an entry near $62.00 which is closer to the 20-day SMA which is starting to turn up.

9/8: We are waiting for our trigger of $62.50 to enter long positions in IWM. We are going to need a strong down day which could come at anytime, perhaps after tomorrow's jobless claims report. I suggest being ready to take advantage of the dip. My comments from below remain the same. Note: I incorrectly listed the wrong November strike price in the play release last night. It has been corrected and I apologize for the error.

9/7: I believe any further weakness in the Russell 2000 and broader market present buying opportunities for an early fall rally and into the mid-term elections, of which will probably result in gridlock in Washington which is generally good for equities. Fund managers will begin reallocating their portfolios and cash on the sidelines should be put to work. Let's use a trigger of $62.50 to initiate long positions in IWM which is near the 38.2% retracement from the lows on 8/24 to the highs on 9/3. Our initial stop will be $59.80. Our targets are near the June and July highs.

Suggested Position: Buy November $65.00 CALL, current ask $2.55, estimated ask at entry $2.00

Annotated chart:

Entry on September xx
Earnings N/A (unconfirmed)
Average Daily Volume: 60 million
Listed on September 7, 2010


NVIDIA Corp. - NVDA - close 10.07 change -0.11 stop 9.15

Target(s): 10.75, 11.35, 11.80
Key Support/Resistance Areas: 11.85, 11.45, 11.00, 10.25, 10.00 9.45
Current Gain/Loss: -14%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
9/9 & 9/11: NVDA remains above $10.00 and its 20-day and 50-day SMA's. Any pullback to these areas would be good long set-ups for new entries.

9/8: NVDA hit our breakout trigger to enter long positions. The stock has now officially printed a higher high which confirms the higher low made last week. The stock has closed above its 50-day SMA and its 20-day SMA is rising. We also have an upward trend line as a good reference point to manage the trade going forward. I think pullbacks can be bought for readers who do not have open positions. $10.00 is a solid support level but I'm not convinced NVDA will trade there unless broader market weakness surfaces in earnest, which is certainly a possibility.

9/7: We are waiting to be triggered in NVDA. The stock closed above its 50-day SMA for the first time since 4/15. If the market rebounds tomorrow we will most likely get triggered on the breakout.

Current Position: Long October $10.00 CALL, entry was at $0.72

Annotated chart:

Entry on August xx
Earnings 11/4/2010 (unconfirmed)
Average Daily Volume: 23.5 million
Listed on August 28, 2010


Rackspace Hosting, Inc - RAX - close 21.74 change +0.57 stop 21.14 *NEW*

Target(s): 20.75(hit), 21.30 (hit), 21.85, 22.65
Key Support/Resistance Areas: 23.50, 21.40, 20.00, 19.50, 19.00, 18.00
Current Gain/Loss: +60%
Time Frame: 3 to 5 weeks
New Positions: No

Comments:
9/11: RAX broke out of the ascending triangle I mentioned below and gained +3.5% today. The stock has gained more than +10% from our entry and our options have gained +60%. Taking at least some profits off of the table is the smart thing to do. It wouldn't surprise me to see RAX pull back to the $21.35 area before a continuation higher if the broader market strength continues this week. Regardless we are going to keep a tight leash on this trade and move the stop all the way up 21.14. I would also watch out for a possible double top with Friday's high at 21.86 so I have lowered the next target 10 cents to 21.85 and the final target is 22.30. Essentially, we are looking to book gains on this position n the coming days. One of the reasons I released this play was takeover chatter circulating in the sector and around the company. We all saw what happened with 3Par. Hanging on to a small position could pay off but take profits off the table so you are at least playing with the houses money, per se.

9/9: We currently have a +30% gain in RAX. Let's move our stop up to $18.95 which is just below the 200-day SMA and primary upward trend line. The stock is forming an ascending triangle over the past couple of weeks and a breakout, coupled with broader market strength, could catapult RAX to our more aggressive targets. If this happens be ready to take profits or tighten stops to protect them.

9/8: RAX double bottomed with yesterday's lows and closed almost +2% higher on the day. We are looking for a continuation of the recent move higher and if the broader market cooperates I'm looking for RAX to hit our 2nd target of $21.30 and possibly $21.95 this week. As these targets approach be ready to take profits or tighten stops to protect them.

Current Position: Buy December $21.00 CALL, entry was at $1.40

Annotated chart:

Entry on August 25, 2010
Earnings 11/9/2010 (unconfirmed)
Average Daily Volume: 1.75 million
Listed on August 25, 2010


Stillwater Mining - SWC - close 14.48 change +0.07 stop 13.78 *NEW*

Target(s): 15.45, 15.90, 16.30, 16.95
Key Support/Resistance Areas: 14.40 to 14.70
Current Gain/Loss: -33%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
9/11: I've lowered the stop 12 cents to 13.78 which is just underneath the 20-day moving average. The 14.40 level is the logical place for SWC to bounce but we are going to need the broader market strength to continue. My comments from below remain the same.

9/9: SWC is at a critical support level and if it breaks I am concerned SWC could head towards $13.00. As such, I suggest we tighten the stop to $13.90 and step aside if it gets hit. I've lowered the targets to take advantage of higher highs should SWC turn back higher from here.

9/8: SWC is consolidating recent gains and is maintaining an upward trend line that began on 8/25. The stock has strong support all the way down to the $14.00 level. We're looking for SWC to find support soon and make another higher high.

Current Position: Long October $15.00 CALL, entry was at $1.20

Annotated chart:

Entry on September 3, 2010
Earnings 11/4/2010 (unconfirmed)
Average Daily Volume: 1.62 million
Listed on September 2, 2010


Vale SA - VALE - close 27.43 change -0.18 stop 25.80

Target(s): 28.38, 28.75, 29.25, 29.70
Key Support/Resistance Areas: To Follow
Current Gain/Loss: +8%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
9/11: VALE traded right down $27.25 and bounced so we are now long October 29.00 calls at 50 cents. I've added a lower target right underneath the 200-day SMA. My primary targets on this trade are the first two. If the first target is reached our 50 cent options should be worth about 80 cents which is a +70% gain. As these targets approach I suggest we keep a tight leash on the trade get out with a winner.

9/9: We are waiting to be triggered at $27.25 which is just above the 50-day SMA and Tuesday's lows. I'm looking for this area as a bounce point in VALE back up towards its August highs. NOTE: I incorrectly listed the wrong monthly option as November in the play release last night. It should be October and has been corrected. I apologize for the error.

9/8: VALE is an international basic materials producer. Demand is increasing from emerging markets and various other developed countries whose economies are growing at a more rapid pace than in the US. RBC cut VALE to sector perform in the pre-market on 9/2 and the stock has lost about -5% since. However, VALE is maintaining two upward trend lines and bounced hard off its 50-day SMA on Monday. I suggest we use the weakness to our advantage by initiating long positions if VALE trades to $27.25. Our stop will be $25.80 with our primary targets near the stock's August highs.

NOTE: I have chosen a further out of the money call than normal to reduce risk on the trade should the stock break lower.

Current Position: Long October $29.00 CALL at, entry was at $0.50

Annotated chart:

Entry on September 10, 2010
Earnings 10/28/10 (unconfirmed)
Average Daily Volume: 17 million
Listed on September 8, 2010


PUT Play Updates

Abercrombie & Fitch - ANF - close 34.85 change +0.52 stop 35.65

Target(s): 34.60 (hit), 34.20 (hit), 33.55
Key Support/Resistance Areas: 38.20, 37.25, 32.75, 34.00, 30.50
Current Gain/Loss: -23%
Time Frame: Several weeks
New Positions: No

Comments:
9/11: ANF just won't let go under $34.00 but if there is broader market weakness this week it could go quick. I'm leaving this open more as a hedge on our long positions with a tight stop above last week's highs. All of the targets above remain valid. My comments from below remain the same.

9/9: ANF hit our third target and we have one more. We have a tight stop at $35.65 and the broader market looks like it could pullback here. If it does ANF should head lower in earnest. Our final target is $33.55 which we will use to close positions if we are not stopped out first. Continue to use weakness to close positions.

9/8: ANF came within 9 cents of our $34.05 target so this has been raised to $34.20. ANF posted its lowest close since 7/21 on Wednesday and the stock looks ready to make another leg down, but we are going to need to see broader market weakness. I suggest readers continue to use weakness to close positions or tighten stops. I've lowered the stop $35.65 and adjusted the final two targets.

Current Position: Long October $34.00 PUT, entry was at $2.10

Annotated chart:

Entry on August 25, 2010
Earnings: 11/11/10 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on August 24, 2010


McDonald's Corp. - MCD - close 75.01 change +0.64 stop 75.75

Target(s): 72.05, 70.90
Key Support/Resistance Areas: 75.35, 73.60, 71.50, 70.50
Current Gain/Loss: -9.5%
Time Frame: 1 week
New Positions: Yes

Comments:
9/11: I expected MCD to fill some of the its gap lower on Thursday but was a little surprised the stock traded to $75.00. On the hourly chart MCD closed right on its 20 and 50 period moving averages which it is testing from below. This is a logical spot for the stock to turn lower but we will most likely need broader market weakness. If MCD heads higher first a nice short set-up would be in the $75.30 area. This would create a bearish head and shoulders pattern on the hourly chart.

9/9: MCD printed a new all-time high of $76.36 yesterday. The recent surge higher was due to the company reporting +7% y/y same store sales in early August. Today MCD reported that August same store sales were up only +4.9% y/y compared to the prior +7% gain. This wasn't good enough for investors as they began dumping the stock on heavy volume. I believe the selling will continue at least to a key support level near $72.00 which was prior resistance in May. I suggest readers initiate short positions to take advantage of the momentum and possible broader market pullback. The gap down today hasn't been filled but I don't think it will prior to breaking lower. Let's use a trigger of $74.60 or a breakdown to $73.55 to open positions. We'll use an initial tight stop of $75.75 which is below yesterday's high and get out early if we are wrong.

Current Position: Long October $72.50 PUT, entry was at $0.84

Annotated chart:

Entry on September xx
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 6 million
Listed on September 9, 2010