Editor's Note:
Good evening. There were no significant changes to most of our positions on Wednesday so I have not provided specific updates, unless noted below. The model portfolio snapshot below is current and I have reprinted Tuesday's updates.

This week has been painfully slow with the indexes trading in a fairly tight sideways channel. Tomorrow's Jobless Claims report and Producer Price Index released in the pre-market will likely set the tone for the remainder of the week. After the pre-market reports we have the Philly Fed Survey and on Friday the CPI Index and Consumer Sentiment report. If these reports are bullish stocks are likely to break out higher so readers should use caution on short positions. On the contrary, if these reports are bearish we will likely experience a sharp sell-off. Throw in OPEX week and it becomes difficult to determine which way the broader market heads from here. There is one thing I do know for sure and that is the market can not continually gap higher and go up in a straight line. So I also caution readers of a breakout higher only to see it fail.

If we do head lower I suspect pullbacks will most likely be bought unless the data is extremely bad or more unfavorable news surfaces, which must be considered. In any event, we have long and short positions with a bias to the long side and any moves tomorrow or Friday may present opportunities to open new positions at better prices than we currently have. Please feel free to email me with any questions.

Current Portfolio:

Our long positions are performing well and all of them currently have gains, with the exception of RIG which is slightly negative. Our short positions are all slightly in the red and they are in play to take advantage of a much needed pullback in the broader market. I anticipate a pullback to be sharp and quick so planning your exits on short positions is the right strategy. However, if we do break out higher first I would also be looking to take profits on long positions because I do not believe a breakout higher is sustainable without a meaningful correction. My only comments that differ from Tuesday's updates are below:

SWC - The stock surged +4.43% higher today on no news that I could find. A tighter stop could considered in the $15.25 area.

MCD - MCD is forming a bull flag in its hourly chart. I believe our stop is in the right place but caution is advised.

NOTE: The below updates are a reprint from Tuesday. The closing prices are not current. Please refer to the snapshot above for current prices.


CALL Play Updates

ConocoPhillips - COP - close 55.37 change -0.01 stop 52.30

Target(s): 55.85, 56.90, 57.75
Key Support/Resistance Areas: 58.50, 57.00, 54.00, 53.00 to 53.50
Current Gain/Loss: +10%
Time Frame: 1 to 3 weeks
New Positions: Yes, only on pullbacks

Comments:
9/14: COP traded to within 12 cents of reaching our first target today before closing about 40 cents lower. Our current gain is +10% but it appears the broader market is going to pullback here so readers may want to consider exiting positions now if they do not want to endure a pullback. However, I do believe the pullback will be quick, plus our options expire in November so I am not concerned about time decay yet. If we do happen to go higher first I suggest readers be quick to take profits or tighten stops to protect them. The stock has solid all the way down to $54.00

9/13: COP is nearing our first target. Considering the overbought conditions in the broader market readers should considering taking profits or tightening stops to protect them at this level.

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

Entry on September 7, 2010
Earnings 10/28/2010 (unconfirmed)
Average Daily Volume: 8.9 million
Listed on September 4, 2010


iShares Russell 2000 - IWM - close 64.99 change -0.28 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:
9/14: We are going to get a pullback and our trigger to enter is just above IWM's 50-day SMA, which should act as a launching point for a move back towards recent highs. I suggest readers be prepared to buy the dip which could easily happen in the next day or two.

9/13: IWM has left the train station without us and is now well above our trigger to enter long positions. I still like the play on a pullback but the question is how far will it come. This could get tricky considering its OPEX week but I do believe a pullback to the 50-day SMA will hold. Let's raise the trigger to $63.15. The 50-day is currently just under $63.00.

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.

Suggested Position: Buy November $65.00 CALL, current ask $3.09, estimated ask at entry $2.20

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


NVIDIA Corp. - NVDA - close 10.54 change -0.10 stop 9.55

Target(s): 10.75 (hit), 11.10, 11.80
Key Support/Resistance Areas: 11.85, 11.45, 11.00, 10.25, 10.00 9.45
Current Gain/Loss: +20%
Time Frame: 1 to 2 weeks
New Positions: Yes, on a pullback

Comments:
9/14: I like the potential of this trade but we may need to exhibit some patience with NVDA on a pullback. If we head higher prior to pulling back be ready to take profits or tighten stops. Our $10.75 target was reached yesterday and still remains a valid target.

9/13: NVDA surged +5.66% today and looks poised to test its 100-day SMA which is declining. We have a +33% gain so protecting profits is advised. I've raised the stop to $9.55 and lowered the 2nd target $11.10. If we head higher prior to pulling back be ready to take profits or tighten stops.

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.

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

Entry on September 8, 2010
Earnings 11/4/2010 (unconfirmed)
Average Daily Volume: 23.5 million
Listed on August 28, 2010


Stillwater Mining - SWC - close 15.11 change +0.48 stop 13.78

Target(s): 15.45 (hit), 15.90, 16.30, 16.95
Key Support/Resistance Areas: 14.40 to 14.70
Current Gain/Loss: -16%
Time Frame: 1 to 3 weeks
New Positions: Yes, only on pullbacks

Comments:
9/14: SWC traded all the way up to our first target today before backing off. The stock continues to look bullish but I am concerned about a broader market pullback and the double top the stock made with the 9/7 high. However, SWC gained +3.28% today and mining stocks can do well if stocks fall. Further, with precious/industrial metal commodity prices rising miners are benefiting. Caution is advised.

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

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


Transocean Ltd - RIG - close 58.35 change -0.49 stop 53.40

Target(s): 62.95, 64.50, 66.50
Key Support/Resistance Areas: 55.50, 58.35, 63.90, 64.90
Current Gain/Loss: -20%
Time Frame: 2 to 4 weeks
New Positions: Yes

Comments:
9/14: We may need to exhibit some patience here as RIG is consolidating gains. The volume pattern look great as the pullbacks are on lighter volume than the breakout. Broader market weakness will most likely pull RIG down but I believe the dips will be bought. Our options expire in November so I'm not worried about time decay yet. I like new positions on any further weakness.

9/13: We are long RIG calls as of this morning. The stock retraced some of Friday's gains and is holding above a prior resistance level of $58.35. RIG is also forming a bull flag on its hourly chart. My comments from below remain the same.

9/11: RIG exploded on Friday after BP's new CEO said that BP does not intend to seek compensation from RIG for the oil spill disaster unless the DOJ finds gross negligence on their part. Reports from FBR and BofA/Merrill state that they don't believe the DOJ will be able prove gross negligence. RIG is also a cheap stock trading at a PE below 7. Technically, the stock broke out of a downward trend line on heavy volume that started on May 27th. The stock has made a series higher lows and higher highs which I think will continue. I suggest we open positions at current levels. More nimble traders may want to time an entry on a retracement of some of Friday's gains or a breakout above Friday's highs. Our initial stop will be $53.40.

Current Position: Long November $65.00 CALL, entry was at $2.25

Entry on September 13, 2010
Earnings 11/3/10 (unconfirmed)
Average Daily Volume: 8 million
Listed on September 11, 2010


Vale SA - VALE - close 28.17 change -0.19 stop 25.80

Target(s): 28.38 (hit), 28.65, 28.90, 29.30
Key Support/Resistance Areas: 29.30, 28.45, 28.00, 27.25
Current Gain/Loss: +44%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
9/14: VALE came within 4 cents of our primary second target before backing off and closing near its lows of the day. Options could have been closed for about 85 to 90 cents on the surge higher this morning which would have been a +70% to +80% gain. Nonetheless, our current gain is +44%. It looks like VALE is due for more pullback so readers should consider protecting profits. I do believe the dips will get bought and VALE should head back higher once the selling subsides. I've adjusted the targets and suggest we close positions as targets approach again.

9/13: Vale surged +3.39% higher today and our first target has been hit. I'm looking for $28.75 and suggest we close positions or tighten stops at this level.

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 +60% 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.

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

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


PUT Play Updates

Freeport-McMoRan - FCX - close 81.44 change -0.33 stop 84.55

Company Description:
Freeport-McMoRan Copper & Gold Inc. (FCX), through its wholly owned subsidiary, Phelps Dodge Corporation (Phelps Dodge) is a copper, gold and molybdenum mining company. Its portfolio of assets includes the Grasberg minerals district in Indonesia, which contains the single recoverable copper reserve and the single gold reserve; mining operations in North and South America, and the Tenke Fungurume minerals district in the Democratic Republic of Congo (DRC). FCX also operates Atlantic Copper, its wholly owned copper smelting and refining unit in Spain.

Target(s): 78.00, 76.80, 75.75
Key Support/Resistance Areas: 84.25, 76.50, 75.00
Time Frame: 1 week

Why We Like It:
FCX has gained nearly +20% since its low on 8/25 less than 3 weeks ago. The stock has surged higher, virtually in a straight line with little to no pause. FCX has rallied right into its primary downtrend line from its January highs and also closed at a prior resistance level from mid-March. This type of move is not sustainable and I suggest readers open short positions at current levels and play for a retracement of the stock's recent gains. Our primary target is $76.80 which is about -5.5% lower than current levels, and also just above a 38.2% retracement from the 8/25 lows to today's highs. For options traders, if this target is reached it should produce a gain of approximately +60% to +65%. This could be a quick trade and a good strategy would be to immediately place a "good til cancelled" or "one cancels the other" order immediately after the position is entered and be ready to take profits or get out should our stop get hit.

Current Position: Long October $75.00 PUT, entry was at $1.75

Entry on September 15, 2010
Earnings: 10/20/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on September 14, 2010


McDonald's Corp. - MCD - close 73.94 change -0.63 stop 75.75

Target(s): 73.25, 72.05, 70.90
Key Support/Resistance Areas: 75.35, 73.60, 71.50, 70.50
Current Gain/Loss: +14%
Time Frame: 1 week
New Positions: Yes

Comments:
9/14: MCD is headed lower and I suggest readers begin to look for exits on any further weakness. My comments from below have not changed.

9/13: MCD lost -0.59% while the broader market surged higher today. The stock traded right up to $74.30 and sold off hard before bouncing late in the day. I'm looking for MCD break through its 20-day and head towards its 50-day SMA but we are most likely going to need to see a broader market pullback. I've added a target of $73.25 which will fill a gap higher on 9/1. This should give us nearly a +50% gain and is a good place to consider taking profits or tightening stops to protect them.

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.

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

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


SPDR S&P 500 ETF - SPY - close 112.65 change -0.07 stop 116.25

Target(s): 110.62, 109.60
Key Support/Resistance Areas: 115.00, 113.00, 110.60, 50-day, 20-day
Current Gain/Loss: -1.92%
Time Frame: 1 week
New Positions: Yes

Comments:
9/14: SPY closed the day just about where it began. My comments from the play release remain the same. We are looking for the S&P 500 to turn lower here, fill a few open gaps higher, and test its rising 20-day and 50-day SMA's from above.

9/13: The market is overbought and needs a healthy pullback to regain its energy. SPY has rallied right into resistance from its June and August highs. I'm looking for the S&P 500 to turn lower here, fill a few open gaps, and test its rising 20-day and 50-day SMA's from above. I suggest readers open short positions at current levels and look for a $2 to $3 pullback in the coming days (equivalent to 20 to 30 S&P 500 points). Our profit targets should produce +40% and +60% gains.

Current Position: Long October $109.00 PUT, entry was at $1.56

Entry on September 14, 2010
Earnings: N/A (unconfirmed)
Average Daily Volume: 198 million
Listed on September 13, 2010