Current Portfolio:


CALL Play Updates

Petroleo Brasileiro - PBR - close 35.72 change +0.14 stop 33.70

Target(s): 37.40, 38.65
Key Support/Resistance Areas: 39.00, 37.50, 36.60, 34.00
Current Gain/Loss: -2.4%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
9/29: PBR is hanging tough but I am concerned of a broader market pullback, which readers may want to consider as a buying opportunity. I believe our stop is in the right place but we may have to exhibit some patience if there is a pullback. Tighter stops could be considered in the $34.35 to $34.65 area.

9/28: PBR consolidated yesterday's gains, closing marginally lower. We are looking for the short interest to unwind which should cause the stock to spike higher. Be prepared to take profits or tighten stops to protect them as our target approach.

9/25: PBR gapped lower on Friday which improved our entry price into the position. All reports indicate the secondary offering was a success and was priced near the market. We are looking for the short interest to unwind which should cause a quick pop in the stock. Our stop is in place if we are wrong.

Suggested Position: Long November $37.00 CALL, entry was at $1.25

Entry on September 25, 2010
Earnings 11/11/2010 (unconfirmed)
Average Daily Volume: 13 million
Listed on September 23, 2010


Transocean Ltd - RIG - close 65.13 change +1.93 stop 63.90

Target(s): 62.95 (hit), 64.40 (hit), 65.65, 66.50
Key Support/Resistance Areas: 55.50, 58.25, 63.90, 64.90
Current Gain/Loss: +70%
Time Frame: 2 to 4 weeks
New Positions: Yes, on pullbacks

Comments:
9/29: RIG surged another +3% today and it is time to fiercely protect profits as we currently have a +70% gain. Let's move the stop all the way up $63.90. I've also added a target of $65.65 which is where I highly suggest taking profits or tightening stops to protect them.

9/28: After consolidating on light volume over the past couple of weeks RIG has broken out on stronger volume the past two days. The stock came within 5 cents of reaching our 2nd target in early trading today so this target has been lowered to $64.40. Options positions could have been closed for +55% gain on the initial surge this morning. Today's candlestick may be considered a reversal pattern so readers should use caution. However, I do think pullbacks will get bought but the overall broader market strength or weakness will be important.

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


STEC, Inc. - STEC - close 12.72 change -0.07 stop 12.05

Target(s): 14.15, 14.65
Key Support/Resistance Areas: 14.80, 14.15, 13.45, 12.15
Current Gain/Loss: -25%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
9/28 & 9/29: STEC has pulled back from big gains late last week. We may need to exhibit patience as the broader market determines its next direction. I like new positions at current levels.

9/25: The storage sector has been beaten down and is due for a comeback if the broader market cooperates. STEC bounced hard off of its 20-day SMA on Thursday and is forming an ascending triangle on its daily chart. I suggest readers initiate long positions if STEC pulls back to $13.10 or breaks higher to $13.50, whichever occurs first. We are targeting a move up to its congestion areas from April and June. If triggered at $13.10, our profit target on option positions is +50% to +75%.

Current Position: Long November $14.00 CALL, entry was at $0.96

Entry on September XX
Earnings 11/03/2010 (unconfirmed)
Average Daily Volume: 1.8 million
Listed on September 25, 2010


iPath S&P 500 VIX ST Futures - VXX - close 16.93 change +0.33 stop 16.23

Target(s): 17.55, 18.45, 19.25
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.

9/29: Volatility broke an intraday downtrend line but still need to get above Wednesday's highs, which will come if there is broader market weakness. My comments below remain the same.

9/28: Volatility carried into this morning but reversed lower as the bulls stepped in pushing stocks back toward their highs. I want to add a target of $17.55 which should be considered as a place to take profits or tighten stops to protect them. We have a tight stop which will most likely get hit if the broader market continues higher in the coming days.

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 32.57 change -0.32 stop 33.20

Target(s): 32.20, 31.50, 30.85
Key Support/Resistance Areas: 33.50, 31.00, 29.80
Current Gain/Loss: -30%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
9/29: ADM turned lower right where it should have today. I am looking for more downside especially if the broader market pulls back which will likely determine how far this goes. I suggest exiting on weakness in the stock as time decay is going to start to eat away at our premium. $33.20 is our stop. Readers should use caution. My comments below remain the same.

9/28: ADM is testing the backside of a broken intraday upward trend line and a downward trend line (which remains in tact). This is the logical spot for the stock to head lower and make another lower low. $32.20 is still a valid target, although $31.50 (raised 20 cents) looks very doable if the broader market pulls back.

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 DJIA ETF - DIA - close 108.31 change -0.25 stop 110.55

Target(s): 106.55, 105.40
Key Support/Resistance Areas: 112.00, 110.00, 107.30, 106.40, 105.00
Time Frame: 1 to 3 weeks

Comments:
9/29: Let's lower the trigger to $108.80 in DIA. My comments below have not changed.

9/28: Stocks have been flowing into large caps and I believe they are due for a decline after the quarter ends which is Thursday. I also think the broader markets may see a false breakout tomorrow which will head fake late comers to the party into long positions. I suggest readers enter long positions if DIA trades to $108.85 (updated), which is near the highs DIA printed after the flash crash before the DJIA plunged more than -1,000 points. If triggered, our profit targets on options positions are +50% to +75%.

Suggested Position: Buy November $105.00 PUT, current ask $1.97, estimated ask at entry $1.70

Entry on September xx
Earnings: N/A (unconfirmed)
Average Daily Volume: 6.5 million
Listed on September 25, 2010


Charles Schwab - SCHW - close 13.95 change -0.24 stop 14.42

Target(s): 13.45, 13.10, 12.85
Key Support/Resistance Areas: 14.10, 13.35, 13.05, 12.65
Current Gain: -30%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
9/29: SCHW backed off of its 50-day SMA and closed down -1.70% on the day. The stock now needs break down through its 20-day SMA which should catapult the stock towards our first target. If the broader market corrects it should easily happen. There were also more than 5,000 March 2011 puts purchased at the $13 strike today so it appears someone with deep pockets thinks the stock is due for a decline. We just need it to happen sooner rather than later.

9/28: SCHW traded up to its 50-day SMA today and closed just below it. We are very close to being stopped out which will probably happen if there is broader market strength. I've adjusted the targets and suggest readers begin to exit positions on weakness if the stock turns lower from here.

Current Position: Long November $13.00 PUT, entry was at $0.50

Entry on September 23, 2010
Earnings: 10/14/2010 (unconfirmed)
Average Daily Volume: 11 million
Listed on September 22, 2010