Editor's Note:

The market's early morning strength, led by financials, reversed late in the session. It looks like the market's correction may not be over yet. Which means we might get a better entry point in the next day or two to buy the dip.

-James

Current Portfolio:


CALL Play Updates

Ansys, Inc. - ANSS - close: 48.97 change: -0.01

Stop Loss: 44.90
Target(s): 49.50,
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
11/15: ANSS was relatively resistant to any profit taking on Monday and closed virtually unchanged on the session. While I applaud the relative strength we want to see a pull back. The market looks vulnerable to more selling right now so ANSS should follow it lower. Broken resistance near $46.50 should be support. I am suggesting we buy calls on a dip to $46.75. I'm listing a stop loss at $44.90 but you could probably get away with a stop closer to $46.00.

Buy-the-dip trigger @ 46.75

Suggested Position: Buy the 2011 January $50.00 calls (ANSS1018L50)

Entry on November xxth at $ xx.xx
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 651 thousand
Listed on November 13th, 2010


Baidu, Inc. - BIDU - close: 108.80 change: -1.84

Stop Loss: 106.49 *new*
Target(s): 119.75, 124.50
Current Option Gain/Loss: -39.7% and -29.2%
Time Frame: 4 to 5 weeks
New Positions: Maybe

Comments:
11/15: After Friday's -5% plunge in the Shanghai index on Friday the Chinese market managed a +1% bounce on Monday. Sadly BIDU's participation in the rebound quickly faded and the stock lost another -1.6%. Shares of BIDU are quickly approaching the bottom of its recent trading range near $107. A breakdown below this level will most likely hit our stop loss. I am not suggesting new bullish positions in BIDU at this time.

Current Position: Long the 2010 December $120 calls (BIDU1018L120) Entry @ $2.99
- or -
Current Position: Long the 2011 January $120 calls (BIDU1122A120) Entry @ $5.65

Entry on November 12th at $112.97
Earnings Date 02/09/11
Average Daily Volume = 13 million
Listed on November 11th, 2010


Caterpillar - CAT - close: 81.82 change: +0.78

Stop Loss: 79.40
Target(s): 84.85, 89.50
Current Option Gain/Loss: + 1.4% & +21.3%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
11/15: CAT was part of the M&A excitement this morning with news the company was buying mining company Bucyrus (BUCY) for $7.6 billion. This is the biggest acquisition in CAT's 85-year history. The deal values BUCY at $92 a share and shares of BUCY gapped open at $90.08 this morning (FYI: The LEAPSTrader newsletter was long calls on BUCY). Shares of CAT saw some volatility with a gap open lower at $79.80 followed by a quick intraday rally toward $83.60. Unfortunately, like most of the market's strength today it faded by the closing bell.

I remain bullish on CAT but I think we might see another entry point near $80.00 soon. Wait for the dip (or bounce) near $80.00 again and use it as another bullish entry point.

Earlier Comments
Our first target is $84.85. We want to exit the majority of our position here. We'll set a secondary target at $89.50 but again I warn you the $85 level should be tough resistance. FYI: The P&F chart is bullish with a $118 target.

Current Position: Long the December $85 calls (symbol: CAT1018L85)
Entry @ $1.40

Double Down
New Position: Buy the December $85 calls (CAT1018L85), current ask $1.17

Entry on November 9th at $ 81.75
Earnings Date 01/27/11
Average Daily Volume = 7.7 million
Listed on November 6th, 2010


Cliffs Natural Resources - CLF - close: 67.52 change: -0.00

Stop Loss: 64.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/15: Monday proved to be a quiet session for CLF. Shares traded sideways in a narrow range and closed unchanged on the day. Odds that CLF will see a dip toward $66 are growing. Wait for the dip (or bounce) before considering new bullish positions.

Earlier Comments
Stop loss is at $64.75. Our upside targets are $72.00 and $74.75.

Current Position: Long the 2010 December $70.00 CALL, Entry @ $2.42

Entry on November 12th @ 67.00
Earnings Date 02/17/11
Average Daily Volume = 4.3 million
Listed on November 1, 2010


Costco Wholesale - COST - close: 65.48 change: +0.28

Stop Loss: 62.90
Target(s): 69.00
Current Option Gain/Loss: +25.3%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
11/15: COST continues to show relative strength. This morning the U.S. retail sales numbers were released. The headline number was much better than expected but ex-autos retail sales for October were in-line with expectations with a +0.4% gain. Shares of COST managed to rally toward resistance at $66.00 before paring its gains. If the market continues to slip we can look for COST to retest support near $64.00. If the market bounces then look for COST to breakout. Keep in mind that COST could see some movement tomorrow as investors react to earnings from rival Wal-Mart (WMT) who reports Tuesday morning.

Earlier Comments
Look for technical support at the 40-dma. We want to keep our position size small to limit our risk. FYI: The Point & Figure chart is very bullish with an $88 target.

Current Position: December $65.00 calls (symbol: COST1018L65)
Option Entry @ $1.50

Entry on November 8th at $64.50
Earnings Date 12/09/10
Average Daily Volume = 3.4 million
Listed on November 6th, 2010


Humana Inc. - HUM - close: 58.55 change: -0.65

Stop Loss: 51.75
Target(s): 59.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/15: The reversal in HUM continues. Shares reversed on Friday and HUM lost another -1% today. Bear in mind the stock remains stuck in the $58-60 zone, which is where it has been trading for over two weeks. We are still waiting for a pullback toward $55.00. If HUM hits our bullish trigger at $55.25 we'll use a stop loss at $51.75.

Suggested Position:

Trigger to buy calls at $55.25

BUY the 2011 January $55 calls.

Entry on November xxth at $ xx.xx
Earnings Date 11/01/10 (confirmed)
Average Daily Volume = 2.1 million
Listed on October 16th, 2010


iShares DJ Financial ETF - IYF - close 54.34 change +0.13

Stop Loss: 52.90 *new*
Target(s): 57.50, 59.75
Current Option Gain/Loss: -40.0%
Time Frame: 6 to 8 weeks
New Positions: Yes

Comments:
11/15: Financial stocks were showing some relative strength this morning but gains faded into the closing bell. The banking indices still managed to close in positive territory. The IYF rolled over under the $55.00 level and looks ready to retest support in the $54.00-53.50 zone. I would use this dip as a new entry point to buy calls.

Current Position: Long the December $55.00 CALLS, entry @ $2.00

Entry on November 9th @ 55.00
Earnings Date N/A (unconfirmed)
Average Daily Volume: 1.0 million
Listed on November 4, 2010


Macerich Co. - MAC - close: 45.37 change: -0.36

Stop Loss: 43.75
Target(s): 49.75, 54.00
Current Option Gain/Loss: -46.1%
Time Frame: 4 to 5 weeks
New Positions: Yes

Comments:
11/15: MAC is still slipping slowing and looks like it's going to test support near $45.00 or its 50-dma (near 44.40) soon. Wait for the bounce before launching new bullish positions.

Earlier Comments
Our first target is $49.75. Our second target is $54.00 but that's probably wishful thinking on my part.

Current Position: Long the December $50 calls (symbol:MAC1018L50) Entry @ $0.65

Entry on November 11th at $ 46.48
Earnings Date 02/10/11 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on November 10th, 2010


Nike Inc. - NKE - close: 81.80 change: -0.82

Stop Loss: 79.90
Target(s): 86.75, 89.50
Current Option Gain/Loss: -45.2%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/15: The October retail sales numbers did nothing to help shares of NKE. The stock briefly gapped higher and then fell under short-term support near $82.00. The close today under $82.00 and its 30-dma is very short-term bearish and I'm not expecting NKE to fall back toward the $80.00 level. Wait for the dip (or bounce from) near the $80.50-80.00 zone before considering new bullish positions!

Current Position: Long the December $85.00 CALLS (symbol:NKE1018L85) Entry @ $1.15

Entry on November 11th at $83.00
Earnings Date 12/21/10
Average Daily Volume = 2.3 million
Listed on November 6th, 2010


VimpelCom Ltd - VIP - close 15.62 change +0.16

Stop Loss: 14.80
Target(s): 16.75, 17.75
Current Option Gain/Loss: -33.3%
Time Frame: 6 to 8 weeks
New Positions: Yes

Comments:
11/15: Shares of VIP saw some volatility this morning. The stock initially dipped to $16.10 only to rocket higher to $15.89 a few minutes later. The stock closed the session up +1.0% after the company announced an interim dividend payment of $0.46 an ADS (stock traded here in the U.S. instead of back in Russia). The dividend will be paid before Dec. 31st, 2010. Meanwhile the bounce in VIP shares looks encouraging but the action in the market today does not. If you're patient we might see another dip near $15.25 again. FYI: VIP is due to report earnings around Nov. 24th.

Current Position: December $15.00 CALLS, Entry @ $1.05

Entry on November 8, 2010 @ 15.60
Earnings Date 11/24/2010 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on November 3, 2010


PUT Play Updates

Lubrizol Corp. - LZ - close: 106.25 change: +0.85

Stop Loss: 110.25
Target(s): 100.50
Current Option Gain/Loss: -10.3%
Time Frame: 3 to 4 weeks
New Positions: Maybe

Comments:
11/15: The early morning bounce in LZ faded with traders selling into strength near $109.00. The move today looks like a new entry point to buy puts. You may want to keep your position size small to limit your risk.

Current Position: Long the December $105 puts (symbol:LZ1018X105)
Entry @ $2.90

Entry on November 10th at $107.68
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume = 525 thousand
Listed on November 9th, 2010


Millicom Intl. - MICC - close: 92.52 change: -0.38

Stop Loss: 98.25
Target(s): 92.50, 90.25
Current Option Gain/Loss: + 6.1%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/15: It was another quiet session for MICC. Shares are trading in the $92-94 zone. If you look at the last few sessions you can see the bounces failing near technical resistance at the 100-dma. The path of least resistance is still down but I'm not suggesting new positions at this time.

FYI: Our final target is $90.25.

Current Position: Long December 2010 $90 puts (MICC1018X90)
Entry @ $2.45

11/08 Target hit @ 92.50, option @ 2.85 (+16.3%)

Entry on November 1, 2010
Earnings Date 02/01/11
Average Daily Volume = 490 thousand
Listed on October 30th, 2010


Oceaneering Intl. Inc. - OII - close: 68.61 change: -0.32

Stop Loss: 72.15
Target(s): 64.50, 62.25
Current Option Gain/Loss: - 3.5%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
11/15: I don't see any changes from my weekend comments on OII. The stock gapped open at $69.21 and the option opened at $1.45 (entry). Shares of OII spent the session churning sideways in a very tight range. We're expecting a correction toward $65 or lower. I'm still suggesting bearish put positions now. You may want to keep your positions small since this is an aggressive, higher risk trade. Our first target is $64.50. Our second target is $62.25.

Current Position: Long the December $65.00 puts (OII1018x65) Entry @ $1.45

Entry on November 15th at $69.21
Earnings Date 02/17/11
Average Daily Volume = 1.0 million
Listed on November 13th, 2010