Editor's Note:
Good evening. We had lots of movement today in our positions. NVDA and XLNX were closed for big gains, while FCX was closed for a smaller loss. I am looking to take profits on SWC tomorrow. Feel free to email me with any questions or comments. I owe a couple of readers responses and will reply tomorrow morning as I had difficulties accessing those emails this afternoon. Have a great evening!

Current Portfolio:


CALL Play Updates

Stillwater Mining - SWC - close 16.21 change +0.86 stop 15.77 *NEW*

Target(s): 15.45 (hit), 15.90 (hit), 16.30, 16.60
Key Support/Resistance Areas: 14.40 to 14.70, 15.00
Current Gain/Loss: +35%
Time Frame: 1 to 3 weeks
New Positions: Yes, only on pullbacks

Comments:
9/22: Material stocks like SWC are benefiting from the money printing promises of the Fed. SWC surged +5.6% today and closed on its high. I am looking to take profits on this trade. If SWC gets a pullback tomorrow intraday support begins at $16.00 down to $15.90. Let's raise the stop to $15.77 and I suggest we take profits at the close tomorrow if our remaining targets of $16.30 and $16.60 (lowered) are not reached tomorrow. $16.60 will fill a gap from 5/13. Traders may want to consider a 15 or 20 cent trailing stop to see how much more we can get out of the trade.

9/21: SWC sold off hard this morning and had a nice recovery this afternoon. I suggest readers use caution and consider exiting positions, especially on strength. All of the above targets remain valid. My comments from below remain the same.

9/20: SWC recouped some of its losses from Friday, closing +2.10% on the day. The stock's rally seems to be getting a little long in the tooth and is probably going to experience a correction. Readers may want to consider closing positions or using a tighter stop in the $14.85 area. If SWC heads back up towards our targets prior to correcting be prepared to take profits or tighten stops to protect them.

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 59.89 change +0.22 stop 53.40

Target(s): 62.95, 64.50, 66.50
Key Support/Resistance Areas: 55.50, 58.25, 63.90, 64.90
Current Gain/Loss: -30%
Time Frame: 2 to 4 weeks
New Positions: Yes

Comments:
9/22: Nothing has changed and volume continues to be light as RIG is consolidating. Today the stock printed a bottoming tail hammer but I am still concerned of a broader market pullback. My comments below remain the same.

9/21 RIG broke out to a new a high today but it was quickly sold into. I continue to like the volume patterns in this stock and today's volume on the pullback was on the one of the lightest days since RIG broke higher on 9/10. However, it appears the broader may get a pullback here so we may need to exhibit some patience. New positions can be considered at current levels or on a pullback to $58.35 where there is solid support.

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


iPath S&P 500 VIX ST Futures - VXX - close 17.06 change +0.27 stop

Target(s): 18.45, 19.25, 20.40
Key Support/Resistance Areas: 17.50, 19.75, 20.60
Current Gain/Loss: +4%
Time Frame: 1 to 2 weeks
New positions: Yes

Comments:
NOTE: I view this as an aggressive trade so small position size is recommended. Long VXX is a bearish play on equities, however, it is listed as long play because we are long the underlying instrument.

9/21: We are long VXX at the open today. I am looking for a spike higher in the coming days which means we need to experience some broader market weakness. My comments from the play release are below.

9/20: The market remains overbought and is need of a healthy pullback to regain its energy. Traders are getting complacent as evidenced by VXX printing new 52-week lows multiple times in the past week. I suggest we play for a spike in volatility in the coming days and initiate long positions in VXX at current levels. Our first two targets are +10% and +14% higher from current levels which could happen in a matter of a day or two correction if it is strong enough. If reached, these targets should produce approximately +60% to +80% gains on options positions. I am releasing this play without an initial stop, but will implement one in the next day or two.

Current Position: Long November $18.00 CALL, entry was at $1.25

Entry on September 22, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 21 million
Listed on September 21, 2010


PUT Play Updates

Archer Daniels Midland - ADM - close 33.39 change +0.54 stop 33.76

Target(s): 32.20, 31.25, 30.85
Key Support/Resistance Areas: 33.50, 31.00, 29.80
Current Gain/Loss: -40%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
9/22: My thesis (fundamentally & technically) for entering this position is on the verge of failing and we could get stopped out tomorrow if the strength continues. I've changed the immediate target to $32.20 which is just above the 20-day SMA. $31.25 is still in the cards but ADM need to turn lower now. The broader market strength or weakness will likely determine our fate. I suggest getting out of the way and taking the loss if our stop is hit.

9/20 & 9/21: We are short ADM and playing for a pullback. New positions can be considered at current levels. The play release is below and my comments remain valid.

9/18: Cautious comments from analysts about rising agricultural commodity prices is likely to affect ADM's business. The stock is overbought and is due for correction after an incredible run higher off of the July lows. ADM has also formed a bearish dark cloud cover technical pattern that suggests the decline is imminent. I suggest we open positions at current levels and play for a $1 to $2 move lower. The primary targets are $31.25 and $30.85 and if reached they should produce a +40% to +60% winner. Our stop is above the 52-week high set on Friday.

Current Position: Long October $32.00 PUT, entry was at $0.82

Entry on September 20, 2010
Earnings: 11/2/2010 (unconfirmed)
Average Daily Volume: 6 million
Listed on September 18, 2010


SPDR S&P 500 ETF - SPY - close 113.42 change -0.56 stop 116.25

Target(s): 112.10, 111.50, 110.65
Key Support/Resistance Areas: 115.00, 113.00, 110.60, 50-day, 20-day
Current Gain/Loss: -40%
Time Frame: 1 week
New Positions: Yes, if playing for a quick pullback

Comments:
9/21 & 9/22: The bulls have made an impressive run but it appears they are getting exhausted. If the selling starts, which will most likely come fast, I think traders will run for the exits to lock in profits. This is when we want to exit this position or tighten stops to protect capital. I tweaked the middle target above due to a calculation error.

9/20: My comments from below have not changed. SPY broke out today but I do believe it will get sold into which sets things up for a much need healthy pullback in the broader market. I suggest using this pullback as an opportunity to close positions or tighten stops, even if we have to take a loss. I've adjusted our targets. The first target is just above the 200-day SMA while the final target is a gap fill which is just above the rising 20 and 50-day SMA's.

9/18: I believe any breakouts in the broader market will be sold into and dips will be bought. I'm looking for a retracement in SPY over the next week or so to fill some gaps and retest its converging 100-day, 50-day, and 20-day SMA's from above. This is when we will close the position and consider a new long entry. $110.65 is the primary target at this point which give us a +35% to +40% gain.

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


CLOSED BULLISH PLAYS

NVIDIA Corp. - NVDA - close 11.39 change +0.10 stop 11.08

Target(s): 10.75 (hit), 11.05 (hit), 11.45 (hit), 11.80
Key Support/Resistance Areas: 11.85, 11.45, 11.00, 10.25, 10.00 9.45
Current Gain/Loss: +108.3%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
9/22: We are flat NVDA for a +108% gain. The stock continues to look bullish but we need to lock in gains with October options. Pullbacks in this stock can probably be bought, perhaps to the $10.75 area.

9/21: NVDA broke out today on a weak tape gaining +5.4% on the day. Our options have gained +93% and it is time to fiercely protect capital. Let's move the stop all the way up to $11.08 which will guarantee a nice profit. I also suggest we exit positions at the close tomorrow if our stop or remaining targets are not reached. I've added a target of $11.45 which is near today's highs and the 7/14 highs. Traders may want to consider a 10 or 15 cent trailing stop to see how much more we can get out of the trade.

9/20: I am looking for NVDA to break out above the $10.80 level which should catapult the stock up towards its 100-day SMA (currently at $11.19 but declining). I want to lower the next target to $11.05 to account for the declining 100-day SMA and suggest readers take profits at this level or tighten stops to protect them.

Closed Position: Long October $10.00 CALL at $1.50, entry was at $0.72

Annotated chart:

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


CLOSED BEARISH PLAYS

Freeport-McMoRan - FCX - close 84.51 change +1.52 stop 84.55

Target(s): 80.20, 79.40, 78.00
Key Support/Resistance Areas: 84.25, 76.50, 75.00
Final Gain/Loss: -64%
Time Frame: 1 week
New Positions: Closed

Comments:
9/22: We were taken out of FCX today for a disappointing and bad loss. The money printing promises by the Fed sparked commodities and materials stocks yesterday afternoon and it continued today. FCX has broken through an uptrend line and prior resistance from last fall. The stock will correct at some point but I was simply too early. Hopefully, readers were on board with our other winners which takes some of the sting out of this loss.

9/21: What a day, FCX gave up all of yesterday's big advance and then some by the time noon rolled around. However, after the FOMC announcement the stock rallied hard into the close. All told, FCX traded in a 3% range today and closed down 36 cents. Traders holding long positions in FCX had a scare today and if selling picks up again we could see a sharp move lower. This is when we should consider exiting positions or tightening stops as our targets approach.

9/20: A Goldman Sachs upgrade on FCX to buy from neutral sent the stock +2% higher today. As a result, our position suffered greatly and now we need to look for an exit. This move higher in FCX can not continue but it appears any dips will most likely get bought. I've added an immediate target of $80.20, while $79.40 will fill a gap higher. FCX should make it down to these levels on a pullback and is where I suggest readers close positions or tighten stops to protect capital. This could all come at once on one big down day.

Closed Position: Long October $75.00 PUT $0.63, entry was at $1.75

Annotated Chart:

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


Xilinx, Inc - XLNX - close 26.02 change -0.15 stop 27.20

Target(s): 25.40, 25.00
Key Support/Resistance Areas: 26.75, 25.60, 25.20, 24.00
Final Gain/Loss: +88.2%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
9/22: The breakdown in XLNX happened a faster than I anticipated but the stock hit our final target of $25.00 in early trading this morning. As such, the position has been closed and we'll take the +88% gain. Looking at an intraday chart for readers who still have positions, resistance begins at $25.75 but that is going to take away most of the current gains as of today's close (+60%). It appears XLNX wants to still head lower but broader market weakness needs to continue.

9/21: We are short XLNX as of the open this morning. My comments below haven't changed.

9/20: Semiconductor stocks have experienced a slew of recent downgrades and they keep coming as RBC cut its rating on XLNX to Sector Perform from Outperform. The semi's have been the worst performing sector over the past month and a broader market pullback should send the stocks in the sector back to retest their recent lows. If it weren't for the strong market today XLNX would probably have closed near our targets, but the intraday recovery is providing a second chance to enter short positions. I suggest readers initiate short positions at current levels and play for quick pullback of $0.80 to $1.20. If our targets are reached the estimated gain on the position is +50% to +75%.

Closed Position: Long October $26.00 PUT at $1.28, entry was at $0.68

Annotated Chart:

Entry on September 21, 2010
Earnings: 10/20/2010 (unconfirmed)
Average Daily Volume: 7 million
Listed on September 20, 2010