Editor's Note:

News that Standard & Poor's had put U.S. long-term debt on creditwatch negative was completely unexpected. Stocks were already looking weak due to headlines in Europe regarding possible debt defaults from Greece or Portugal. The headline from S&P only exacerbated the weakness. Overall the situation could have been a lot worse. The S&P 500 recovered off its lows to close above the 1300 level. Traders should stay on the defensive!

-James

Current Portfolio:


CALL Play Updates

Church & Dwight Co. Inc. - CHD - close: 79.60 change: -1.26

Stop Loss: 79.45
Target(s): 84.75, 89.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see Trigger

Comments:
04/18 update: The market's widespread weakness on Monday sent CHD sliding toward the bottom of its trading range. We are looking for a breakout to new highs.

I do consider an aggressive trade because CHD doesn't have a lot of option volume and the spreads on its options are relatively wide. Keep your position size small to limit your risk.

I am suggesting a trigger to buy calls at $81.35. If triggered we'll use a stop loss at $79.45.

Trigger @ $81.35 (Small Positions Only!)

- Suggested Positions -

Buy the May $85 call (CHD1121E85) current ask $0.35

Entry on April xxth at $ xx.xx
Earnings Date 05/10/11 (unconfirmed)
Average Daily Volume = 390 thousand
Listed on April 16th, 2011


CH Robinson Worldwide Inc. - CHRW - close: 75.88 change: -0.76

Stop Loss: 73.25
Target(s): 79.50
Current Option Gain/Loss: +11.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/18 update: CHRW actually held up pretty well on Monday. A decline in oil prices may have helped with that. Traders were buying the dip most of the day near $75.00 and the afternoon bounce looks like a new bullish entry point.

Keep in mind our time frame. CHRW is due to report earnings on April 26th and we do not want to hold over the announcement. I would keep your position size small to limit your risk.

- Suggested Positions -

Long the May $75.00 calls (CHRW1121E75) Entry @ $2.25

04/16 new stop loss @ 73.25
04/09 New stop loss @ 72.75

Entry on April 7th at $74.50
Earnings Date 04/26/11(confirmed)
Average Daily Volume = 1.2 million
Listed on April 2nd, 2011


Fortune Brands - FO - close: 62.62 change: -0.69

Stop Loss: 61.75
Target(s): 67.50, 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
04/18 update: FO saw a dip toward short-term support near $621 this morning. aggressive traders may want to consider buying dips here with a tight stop loss. The newsletter is still waiting for a breakout higher. Currently our plan is to buy calls when FO hits $64.00. Now that we know earnings are in early May it gives us about three weeks for this trade to work.

If triggered at $64.00 our targets are $67.50 and $69.75. I would keep our position size small to limit our risk.

FYI: A move past $64.00 would create a brand new quadruple top breakout buy signal.

Trigger @ $64.00 (Small Positions)

- Suggested Positions -

Buy the May $65.00 call (FO1121E65) current ask $1.25

Entry on April xxth at $ xx.xx
Earnings Date 05/05/11 (confirmed)
Average Daily Volume = 973 thousand
Listed on April 5th, 2011


Fossil Inc. - FOSL - close: 91.84 change: -2.64

Stop Loss: 91.95
Target(s): 99.75, 104.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
04/18 update: The drop in FOSL might be interpreted as a breakdown from the recent trading range but traders did buy the dip near $90.00 a couple of times. Currently our plan is to buy calls at $95.60. However, we may want to consider buying a dip near the $85.00 level, which should be support that will soon be underpinned by the 50-dma.

Keep positions small. If triggered our first target is $99.75. The $100.00 mark is probably round-number, psychological resistance. We'll set a secondary target at $104.75 but that might be wishful thinking.

Trigger @ 95.60 (small positions only)

- Suggested Positions -

Buy the May $100 call (FOSL1121E100) current ask $2.65

- or -

Buy the June $100 call (FOSL1118F100) current ask $3.70

Entry on April xxth at $ xx.xx
Earnings Date 05/10/11 (unconfirmed)
Average Daily Volume = 858 thousand
Listed on April 13th, 2011


SPDR Gold ETF - GLD - close: 145.93 change: +0.88

Stop Loss: 137.00
Target(s): 149.50, 154.50
Current Option Gain/Loss: +61.4%, and +54.1%
2nd Option Position Gain/loss: +100.6% and +84.5%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
04/18 update: Gold and silver continued to climb in spite of a bounce in the U.S. dollar today. Gold prices hit a new all-time high of $1,498.60 an ounce on an intraday basis. The GLD is hovering under the $146.00 level. I am not suggesting new positions at this time. We'll wait to evaluate the next dip.

More conservative traders can tighten their stops closer to $139 or $140. The newsletter's stop is at $137.00. Our targets are $149.50 and $154.50 within the next six to twelve weeks.

FYI: The Point & Figure chart for GLD is bullish with a $172 target.

- Suggested Positions -

Long the May $145 call (GLD1121E145) Entry @ $1.84

- or -

Long the June $150 call (GLD1118F150) Entry @ $1.33

- Second Entry Point, April 12th, Entry April 13th -

Long the May $145 call (GLD1121E145) Entry @ $1.48

- or -

Long the June $150 call (GLD1118F150) Entry @ $1.10

Entry on April 6th at $142.40
Earnings Date --/--/--
Average Daily Volume = 12.5 million
Listed on April 5th, 2011


Intuit - INTU - close: 54.15 change: -0.31

Stop Loss: 53.45
Target(s): 57.50, 59.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
04/18 update: INTU held up pretty well today with a -0.5% decline. Shares recouped most of their morning losses. There is no change from my prior comments. INTU has resistance in the $54.00-55.00 zone. Our plan is to buy calls when shares hit $55.25.

If triggered we'll use a stop at $53.45. I would keep our position size small to limit our risk (1/2 or less than your normal trade size).

Trigger @ 55.25

- Suggested Positions -

Buy the May $55.00 call (INTU1121E55) current ask $1.75

Entry on April xxth at $ xx.xx
Earnings Date 05/19/11 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on April 14th, 2011


Norfolk Southern - NSC - close: 66.90 change: -0.84

Stop Loss: 65.90
Target(s): 72.00, 74.90
Current Option Gain/Loss: -57.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/18 update: Shares of NSC were upgraded to a "buy" this morning but that didn't stop shares from following the market lower. Fortunately, traders bought the dip near last week's low. Aggressive traders may want to consider new positions here. I would prefer to see a new rally past $68.50 before launching new positions.

Don't forget that earnings are April 27th and we do not want to hold over the announcement. Our targets are $72.00 and $74.90.

- Suggested Positions -

Long the May $70 calls (NSC1121E70) Entry @ $1.40

04/16 New stop loss @ 65.90
04/16 April $70 calls have expired (-100%)
04/09 New stop loss @ 65.70

Entry on March 25th at $67.84
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 3.0 million
Listed on March 24th, 2011


Panera Bread Co. - PNRA - close: 121.93 change: -2.72

Stop Loss: 119.00
Target(s): 129.50, 134.50
Current Option Gain/Loss: -41.7%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
04/18 update: The market's sharp move lower this morning pushed PNRA toward the $120.50 level. Shares did not see much of a rebound. We can buy this dip since shares held support above $120 but readers might want to tighten their stops closer to the $120.00 mark. Bear in mind that we will plan to exit ahead of the April 26th earnings report. Our final target for the May calls is $134.50.

- Suggested Positions -

Long the May $130 call (PNRA1121E130) Entry @ $3.35

04/16 April calls have expired @ -100%
04/04 1st Target Hit @ 129.50. The April option was at $4.82 (+135.1%) and the May option was at $5.25 (+56.7%)

Entry on March 29th at $123.55
Earnings Date 04/26/11 (confirmed)
Average Daily Volume = 363 thousand
Listed on March 26th, 2011


Praxair Inc. - PX - close: 102.90 change: -0.25

Stop Loss: 98.90
Target(s): 104.75, 109.00
Current Option Gain/Loss: + 5.1%, and - 7.1%
2nd Position Gain/Loss: +24.2%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
04/18 update: Considering the widespread losses in the market I would consider PX's 25-cent loss a show of strength. Traders bought the dip at $101.60. I would not launch new bullish positions at this time.

Our first target to take profits is at $104.75. Our second and final target is $109.00. We will plan to exit ahead of the April 27th earnings report.

- Suggested Positions -

Long the May $100 call (PX1121E100) entry @ $3.90

- or -

Long the May $105 call (PX1121E105) entry @ $1.40

- Second Entry Point, April 12th, Entry April 13th -
- Keep Positions Small -

Long the May $100 call (PX1121E100) Entry @ $3.30

04/12 New stop loss at $98.90
04/12 Second position on dip near $100
04/09 new stop loss @ 97.90

Entry on March 30th at $101.54
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 1.4 million
Listed on March 29th, 2011


Rockwell Automation - ROK - close: 91.16 change: -1.89

Stop Loss: 90.45
Target(s): 99.50
Current Option Gain/Loss: Unopened
Time Frame: six trading days
New Positions: Yes, see Trigger

Comments:
04/18 update: ROK sold off this morning but shares held support near $90.00 and its 40 and 50-dma. Aggressive traders may want to consider buying calls right now with a tight stop close to $90.00. The newsletter will stick to our original plan. I'm suggesting we buy calls with a trigger at $93.75. If triggered our exit target is $99.50. More conservative traders could exit around $97.50 instead since the current high is just under $98.00.

Trigger @ $93.75 (Small Positions)

- Suggested Positions -

Buy the May $95 calls (ROK1121E95) current ask $2.50

Entry on April xxth at $ xx.xx
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 1.1 million
Listed on April 16th, 2011


Sohu.com - SOHU - close: 96.07 change: +0.69

Stop Loss: 89.75
Target(s): 99.90, 107.50
Current Option Gain/Loss: - 1.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/18 update: SOHU managed a gain today but shares are still lagging their peers in the Chinese Internet space. The stock did rebound off the bottom of its trading range near the $91.50 area. We do not want to hold positions over the April 25th earnings report.

Our first target to take profits is at $99.90.

I want to reiterate that this is an aggressive, higher-risk trade. I'm suggesting we keep our position size small to limit our risk. FYI: The Point & Figure chart for SOHU is bullish with a $120 target.

- Suggested Positions -

Long the May $100 call (SOHU1121E100) Entry @ $4.25

04/13 New stop loss @ 89.75
04/11 Adjusted first exit target to $99.90

Entry on April 4th at $92.50
Earnings Date 04/25/11 (confirmed)
Average Daily Volume = 1.1 million
Listed on April 2nd, 2011


Stericycle Inc. - SRCL - close: 90.44 change: -1.49

Stop Loss: 87.75
Target(s): 93.50, 98.50
Current Option Gain/Loss: +20.0%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
04/18 update: The market sell-off this morning pull SRCL back down toward its recent lows in the $89.00-90.00 area. The fact that SRCL did not break down harder is a positive sign. We plan to exit ahead of the April 27th earnings report. Our targets are $93.50 and $98.50.

- Suggested Positions -

Long the May $90 calls (SRCL1121E90) Entry @ $2.50

04/16 new stop loss @ 87.75
04/04 New stop loss @ 86.75
04/02 New stop loss @ 85.75

Entry on March 30th at $88.93
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 479 thousand
Listed on March 29th, 2011


Vertex Pharmaceuticals - VRTX - close: 46.99 change: -1.03

Stop Loss: 45.95
Target(s): 51.85, 58.50
Current Option Gain/Loss: -26.0%
Time Frame: about 2, maybe 3 weeks
New Positions: see below

Comments:
04/18 update: VRTX fell toward support near $46.00 before trimming its losses. If there is any follow through lower tomorrow we will likely see VRTX hit our stop loss. Readers can still choose to buy this intraday bounce or wait for a rally past $49.00.

Our first target is $51.85. Our second, much more aggressive target is $58.50 but again, we don't have a lot of time so we may have to exit early. I am listing our stop at $45.95, under last week's lows.

- Very Small Bullish Positions -

Long the May $50.00 calls (VRTX1121E50) Entry @ $2.50

Entry on April 10th at $48.28
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on April 9th, 2011


Whole Foods Market Inc. - WFMI - close: 63.35 change: -1.36

Stop Loss: 61.70
Target(s): 64.75, 69.00
Current Option Gain/Loss: - 2.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/18 update: WFMI slipped to its rising 30-dma this morning. Readers can use this dip as a new entry point or wait for another bounce from $62.00. We do not want to hold positions over the early May earnings report.

- Suggested Positions -

Long the May $65 calls (WFMI1121E65) Entry @ $2.25

04/16/11 April calls have expired @ -100%
04/13/11 New stop loss @ 61.70
04/02/11 new stop loss @ 59.90
03/30/11 1st Target Hit @ 64.75, April $65 call @ 1.25 (+92.3%)
May $65 call @ 3.50 (+55.5%)
03/29/11 new stop loss @ 59.49
03/26/11 New stop loss @ 58.49

Entry on March 21 at $61.55
Earnings Date 05/04/11 (confirmed)
Average Daily Volume = 1.9 million
Listed on March 19th, 2010


Whiting Petroleum Corp - WLL - close: 69.73 change: -0.88

Stop Loss: 64.45
Target(s): 69.75, 74.00
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks maybe
New Positions: Yes, see trigger

Comments:
04/18 update: Oil prices stumbled lower on Monday. Meanwhile the OIX oil index lost -1.9% but the OSX oil services only fell -0.8%. Normally the services stocks are more volatile. Aggressive traders may want to buy dips near $68.00 or the 50-dma. Our plan is to buy calls on a dip at $66.00. If triggered our targets are $69.75 and $74.00. We do not want to hold over the late April earnings report but so far the date is unconfirmed.

Trigger @ $66.00

- Suggested Positions -

Buy the May $70 call (WLL1121E70) current ask $2.70

Entry on April xxth at $ xx.xx
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on April 11th, 2011


PUT Play Updates

Apollo Group Inc. - APOL - close: 40.04 change: -0.06

Stop Loss: 44.25
Target(s): 38.15, 35.50
Current Option Gain/Loss: +11.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/18 update: Hmm... we may need to rethink our APOL trade. Shares failed to move much on Monday. Why did shares fail to drop with the rest of the market? The overall trend remains bearish but I'm less enthusiastic about initiating new positions. More conservative traders may want to use a stop closer to $43.50 instead. Our profit targets are $38.15 and $35.50.
The Point & Figure chart for APOL is bullish with a $31 target.

- Suggested Positions -

Long the May $40.00 puts (APOL1121Q40) Entry @ $1.24

Entry on April 13th at $41.21
Earnings Date 06/30/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on April 12th, 2011


CLOSED BULLISH PLAYS

Wellpoint Inc. - WLP - close: 68.06 change: -1.35

Stop Loss: 67.45
Target(s): 72.25, 74.75
Current Option Gain/Loss: -65.7%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
04/18 update: Healthcare stocks were not very defensive today. Quite the opposite. The HMO healthcare index fell -3.0%. Shares of WLP gave up -1.9% but slipped to $67.34 intraday. Our stop loss was hit at $67.45.

- Suggested Positions -

May $70 call (WLP1121E70) Entry @ $2.80, Exit @ 0.96 (-65.7%)

04/18 Stopped out @ 67.45, Option @ -65.7%
04/16 April calls have expired @ -100%
04/09 New stop loss @ 67.45
04/02 new stop loss @ 66.75

chart:

Entry on April 1st at $70.25
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 3.4 million
Listed on March 26th, 2011