Editor's Note:

The stock market's major indices manage to post another gain but progress was muted. The volatility index is slipping lower and we've closed our play on the VIX.

-James

Current Portfolio:


CALL Play Updates

Apple Inc. - AAPL - close: 340.53 change: +0.66

Stop Loss: 339.40
Target(s): 374.00, 395.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
05/19 update: APPL posted its third gain in a row but shares seemed to stall at technical resistance near the 40 and 50-dma. Volume was fading as well. I don't see any changes from my prior comments. I'd rather buy calls on a dip near $320 and the 200-dma. In the mean time our breakout trigger at $352.50 is ready should AAPL suddenly surge higher.

Buy-the-breakout Trigger @ $352.50

- Suggested Positions -

Buy the June $370 calls (AAPL1118F370)

- or -

Buy the July $380 calls (AAPL1116G380)

Entry on May xxth at $ xx.xx
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume = 16.6 million
Listed on May 2nd, 2011


Boeing Co - BA - close: 78.04 change: +0.88

Stop Loss: 73.60
Target(s): 79.75, 84.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Comments:
05/19 update: Hmmm... did we miss the entry point in BA? The stock bounced for a second day and closed back above what looks like short-term resistance at $78.00 We do not want to open positions at current levels. For the moment, we'll leave our plan unchanged with a buy-the-dip trigger at $75.00. If triggered our targets are $79.75 and $84.50. The Point & Figure chart for BA is bullish with an $87 target.

Trigger @ $75.00

- Suggested Positions -

Buy the June $80 call (BA1118F80) current ask $0.80

Entry on May xxth at $ xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on May 17th, 2011


Estee Lauder Companies - EL - close: 101.80 change: -0.20

Stop Loss: 98.75
Target(s): 107.00, 109.95
Current Option Gain/Loss: -20.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/19 update: It was a relatively quiet day for EL. Shares bounced along the $101.50 level. I would still consider new positions now or you could wait for a dip closer to the $100.50-100.00 zone instead. Our targets are $107.00 and $109.95.

- Suggested Positions -

Long the June $105 call (EL1118F105) Entry @ $1.95

Entry on May 19th at $102.10
Earnings Date 08/11/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 18th, 2011


Express Scripts - ESRX - close: 60.66 change: +0.52

Stop Loss: 56.75
Target(s): 64.00, 68.50
Current Option Gain/Loss: +18.9% & + 7.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/19 update: The healthcare sector index almost closed in negative territory. Yet ESRX continues to drift higher and posted a +0.8% gain. Volume was pretty light on today's session. I would consider new positions here but you might want to use a tighter stop loss. Our targets are $64.00 and $68.50. FYI: The Point & Figure chart for ESRX is bullish with a $72 target.

- Suggested Positions -

Long the June $60 call (ESRX1118F60) Entry @ $1.53

- or -

Long the August $60 call (ESRX1120H60) Entry @ 3.15

Entry on May 10th at $59.21
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on May 9th, 2011


Fastenal Co. - FAST - close: 66.34 change: +0.00

Stop Loss: 64.75
Target(s): 69.50, 74.00
Current Option Gain/Loss: -53.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/19 update: FAST remains stuck in its trading range. The early morning rally failed. Our plan is to exit this position on Friday at the closing bell. FAST will begin trading at its 2-for-1 split price on Monday.

- Suggested Positions -

Long the June $70.00 calls (FAST1118F70) Entry @ $0.75

05/18 Plan on exiting Friday at the close.
05/17 New stop loss @ 64.75
05/16 Exit May $65 calls ASAP. Bid @ 1.40 (-36.3%)

Entry on April 26th at $66.25
Earnings Date 04/12/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on April 23rd, 2011


Freeport McMoran - FCX - close: 47.97 change: -0.65

Stop Loss: 45.99
Target(s): 53.50
Current Option Gain/Loss: - 17.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/19 update: Our very aggressive play on FCX is not off to a very good start. The dollar trended lower today but that did not help the price of copper, which also slipped lower. Gold prices barely closed in positive territory. FCX opened higher at $48.72 and then closed near its lows for the session, which is not a good signal. If FCX doesn't show some strength tomorrow we'll exit and cut our losses early.

Earlier comments:
I consider this a very aggressive and higher-risk trade. We want to keep our position size very small. If FCX does not produce any follow through on this bounce we'll consider an early exit in the next day or two.

- Very Small Positions -

Long the June $50 call (FCX1118F50) Entry @ $1.52

Entry on May 19th at $48.72
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 21.8 million
Listed on May 18th, 2011


International Business Machines - IBM - close: 170.59 change: +0.15

Stop Loss: 165.90
Target(s): 174.75, 179.50
Current Option Gain/Loss: + 26.9%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
05/19 update: IBM is quietly consolidating sideways near the $170 level. The lack of movement these last couple of days makes me cautious. I'm not suggesting new positions at the moment.

Our first target is $174.75. Our second and final target remains $179.50. FYI: The Point & Figure chart for IBM is bullish with a $208 target.

- Suggested Positions -

Long the June $170 calls (IBM1118F170) Entry @ $2.60

05/12 Adjusted first target to $174.75
05/10 New stop loss @ 165.90

Entry on May 5th at $167.50
Earnings Date 04/19/11
Average Daily Volume = 4.8 million
Listed on April 27th, 2011


Illumina Inc. - ILMN - close: 72.89 change: -0.58

Stop Loss: 69.90
Target(s): 79.50, 84.00
Current Option Gain/Loss: -47.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/19 update: Warning! There was no follow through on yesterday's bounce. I would now expect a drop toward the $71-70 area. I am not suggesting new positions at this time.

Our targets are $79.50 and $84.00. The Point & Figure chart for ILMN is bullish with a $90 target.

FYI: The most recent data listed short interest in ILMN at 22% of the 121 million-share float.

- Suggested Positions -

Long the June $75 call (ILMN1118F75) Entry @ $2.75

Entry on May 11th at $74.50
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on May 10th, 2011


Jos. A Bank Clothiers - JOSB - close: 56.51 change: -0.19

Stop Loss: 52.90
Target(s): 59.50
Current Option Gain/Loss: +71.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/19 update: Retail stocks did not react well to some disappointing earnings news in the sector. JOSB did okay with a minor decline. The $54 level should be support of JOSB does see a dip. I am not suggesting new positions at this time. More conservative traders might want their stop closer to the $54.00 level.

FYI: The most recent data listed short interest in JOSB at more than 21% of the small 27.3 million-share float. The risk of a short squeeze is pretty high.

- Suggested Positions -

Long the June $55 calls (JOSB1118F55) entry @ $1.75

05/18 new stop loss @ 52.90
05/14 Exit the May calls. May $55 call @ 0.90 (+28.5%)
05/12 New stop loss at $51.75

Entry on April 26th at $52.75
Earnings Date 06/02/11 (unconfirmed)
Average Daily Volume = 510 thousand
Listed on April 25th, 2011


NetApp, Inc. - NTAP - close: 54.45 change: +0.84

Stop Loss: 51.75
Target(s): 58.00
Current Option Gain/Loss: + 1.5%
Time Frame: about 3 weeks
New Positions: see below

Comments:
05/19 update: NTAP displayed relative strength with a +1.5% gain. The stock is nearing its recent highs from two weeks ago. A breakout past this level should set up for a rally toward the $58 area and the top of the gap down. I am not suggesting new positions tonight.

NOTE: We do not want to hold over the May 25th earnings report.

- Suggested Positions -

Long the June $55 calls (NTAP1118F55) Entry @ $1.90

05/18 New stop loss @ 51.75

Entry on May 9th at $53.33
Earnings Date 05/25/11 (confirmed)
Average Daily Volume = 5.8 million
Listed on May 7th, 2011


O'Reilly Automotive - ORLY - close: 60.19 change: +0.68

Stop Loss: 57.75
Target(s): 62.75, 67.25
Current Option Gain/Loss: - 100% & -54.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/19 update: AAP reported earnings last night and missed. This sent all the auto-part related stocks lower. ORLY spiked lower to $57.92 before bouncing from support. Volume was pretty heavy on today's decline. The drop was really bad timing since we had planned on exiting our May calls tonight at the closing bell. I am not suggesting new positions at this time.

The plan was to keep our position size small to limit our risk.

- Suggested (Small) Positions -

May $60 calls (ORLY1121E60) Entry @ $1.05, Exit 0.00 (-100%)

- or -

Long the June $60 calls (ORLY1118F60) Entry @ $1.65

05/19 Scheduled exit May calls. Closed @ $0.00 (-100%)
05/18 Prepare to exit May calls tomorrow
05/14 Consider exiting the May calls now!

Entry on May 4th at $60.15
Earnings Date 04/27/11
Average Daily Volume = 1.1 million
Listed on April 30th, 2011


Sherwin-Williams Company - SHW - close: 86.51 change: +0.47

Stop Loss: 83.95
Target(s): 92.25, 98.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see Trigger

Comments:
05/19 update: SHW continues to drift higher and shares set a new all-time closing high today. More aggressive traders may want to buy calls now. Our plan is to launch positions when SHW touches $87.00. If triggered our first target is $92.25. Our second, much more aggressive target is $98.50. I would not be surprised to see some resistance near the $90 and $95 levels. The Point & Figure chart for SHW is bullish with a $99 target. If the stock can rally past $87 it will produce yet another buy signal.

Trigger @ $87.00

- Suggested Positions -

buy the June $90 call (SHW1118F90) current ask $0.65

- or -

buy the Sept. $90 call (SHW1117I90) current ask $2.50

Entry on May xxth at $ xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 14th, 2011


ProShares Ultra(long) S&P 500 - SSO - close: 54.82 change: +0.27

Stop Loss: 52.75
Target(s): 59.00
Current Option Gain/Loss: -38.7% and -25.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/19 update: It was a little bit of a choppy session but the market's major indices managed to close higher. I would still consider new call positions here at current levels.

The SSO is twice as volatile as the market so we want to keep our position size small. Our multi-week target is the $59.00 level.

Small Positions Only - Suggested Positions -

Long the June $56 call (SSO1118F56) Entry @ $1.60

- or -

Long the September $60 call (SSO1117I60) Entry @ $2.00

Entry on May 5th at $54.39
Earnings Date --/--/--
Average Daily Volume = 11.3 million
Listed on May 4th, 2011


Tiffany & Co. - TIF - close: 70.26 change: +0.13

Stop Loss: 67.70
Target(s): 74.50
Current Option Gain/Loss: - 2.0%
Time Frame: about five days
New Positions: see below

Comments:
05/19 update: Shares of TIF gapped open to a new all-time high this morning and then faded lower with the market's weakness. Shares managed to recover and still posted a gain. I would open new call positions at current levels.

FYI: In the news today TIF announced an increase in their quarterly cash dividend to 29 cents a share (+16%).

Keep in mind this is a short-term trade. We want to exit ahead of the May 26th earnings report. I'm suggesting a target at $74.50.

- Suggested Positions -

Long the June $72.50 call (TIF1118F72.5) Entry @ $1.48

Entry on May 19th at $70.45
Earnings Date 05/26/11 (unconfirmed)
Average Daily Volume = 1.49 million
Listed on May 18th, 2011


Union Pacific - UNP - close: 102.79 change: +0.76

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -11.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/19 update: UNP spiked higher this morning to briefly traded over the $104 level only to reverse. Shares ended the session up +0.7% but the move looks like a failed rally at resistance. I'd take a step back. UNP might provide another entry point on a dip in the $101-100 zone.

- Suggested Positions -

Long the June $105 call (UNP1118F105) Entry @ $1.62

Entry on May 9th at $102.19
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on May 7th, 2011


United Technologies Corp. - UTX - close: 88.10 change: +0.95

Stop Loss: 83.49
Target(s): 89.50, 94.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
05/19 update: UTX delivered a bounce (+1.0%) on Thursday but the rally stalled at its 10-dma. Shares are kind of in no-man's land right now. There is support in the $86-85 zone and resistance near $90. Currently we have a trigger to buy calls on a dip at $86.50. More conservative traders could wait for a dip near $85 and its 50-dma instead. If UTX hits $86.50 first then our targets are $89.50 and $94.75.

Buy-the-dip Trigger @ $86.50

- Suggested Positions -

Buy the June $90 calls (UTX1118F90)

Entry on April xxth at $ xx.xx
Earnings Date 04/20/11
Average Daily Volume = 3.7 million
Listed on April 27th, 2011


Wynn Resorts Ltd. - WYNN - close: 147.01 change: +0.15

Stop Loss: 146.40
Target(s): 159.75, 169.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Comments:
05/19 update: WYNN barely pushed its bounce to three days in a row. Shares almost didn't close in positive territory. Currently the stock remains in the middle of its trading range. There is no change from my prior comments.

Prior Comments:
This stock can be somewhat volatile so I am suggesting we keep our position sizes small to limit our risk. We'll use a trigger to buy calls at $152.00. If triggered at $152.00 our targets are $159.75 and $169.00. The $160 and $170 levels look like potential resistance.

Trigger @ $152.00

- Suggested Positions -

Buy the June $160 calls (WYNN1118F160) current ask $2.15

Entry on May xxth at $ xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on May 11th, 2011


PUT Play Updates

Pioneer Natural Resources - PXD - close: 90.96 change: -0.87

Stop Loss: 96.15
Target(s): 85.25
Current Option Gain/Loss: -10.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/19 update: Oil stocks were mixed on Thursday. A drop in the dollar failed to live oil prices. PXD spent the day testing the $90.00 level. I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small to limit our risk because oil and oil stocks have been increasingly volatile lately. Our target is $85.25. More aggressive traders could aim for the rising 200-dma instead. FYI: The Point & Figure chart for PXD is bearish with a $72 target.

-Small Bearish-

Long the June $90 PUT (PXD1118R90) Entry @ $3.30

Entry on May 16th at $91.64
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on May 14th, 2011


CLOSED BULLISH PLAYS

Volatility Index - VIX - close: 15.52 change: -0.71

Stop Loss: 15.45
Target(s): 24.00
Current Option Gain/Loss: -40.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/19 update: Our speculative bet on the VIX did not pan out. Stocks bounced instead of breaking down. Now the VIX looks poised to fall toward its recent lows. It was our plan to exit today at the close if stocks close higher.

Earlier Comments: This is an aggressive, higher-risk trade since the stock market's longer-term trend is still higher. I would only trade very small positions. NOTE: VIX June options expire on June 15th.

Small Bullish

June 20.00 call (VIX1115F20) Entry @ $1.75, Exit 1.05 (-40%)

05/19 Planned Close. Option @ -40%

chart:

Entry on May 17th at $18.54
Earnings Date --/--/--
Average Daily Volume = xxx
Listed on May 16th, 2011