Editor's Note:

Nearly two dozen retailers reported June same-store sales and most of them were better than expected. The sector strength lifted TIF to our final exit target.

-James

Current Portfolio:


CALL Play Updates

Caterpillar - CAT - close: 111.63 change: +1.55

Stop Loss: 102.25
Target(s): 112.00
Current Option Gain/Loss: Unopened
Time Frame: Until the earnings report
New Positions: Yes, see trigger

Comments:
07/07 update: Cyclical stocks were popular targets for the bulls today. CAT actually gapped open higher and rallied to $112.65 intraday. Shares settled with a +1.4% gain. The stock is now up +17.5% from its mid June low near $95.00. We really don't want to chase a move like that. However, we might want to adjust our buy-the-dip trigger soon. At the moment I am leaving our trigger at $105.50. After we see how the market reacts to the jobs data tomorrow we'll re-evaluate our trigger placement.

Trigger @ 105.50

- Suggested Positions -

Buy the Aug. $110 call (CAT11H110)

Entry on July xx at $ xx.xx
Earnings Date 07/22/11 (unconfirmed)
Average Daily Volume = 8.4 million
Listed on July 2, 2011


Cerner Corp. - CERN - close: 64.29 change: +0.63

Stop Loss: 60.90
Target(s): 64.75
Current Option Gain/Loss: +150.0% & +87.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/07 update: CERN has almost hit our target. Shares added another +0.9% with its eighth gain in a row. Our risk right now is that the jobs report really disappoints and the market sinks and CERN gaps open lower tomorrow. Cautious traders may want to plan on an early exit at the open on Friday no matter what the news is.

Currently our exit target is $64.75. However, we will exit our July calls tomorrow (Friday) at the closing bell assuming shares have not yet hit target. If you have August options you can hang on and aim higher but CERN is overbought and due for a correction.

Please note our new stop loss at $60.90.

Earlier Comments:
We do not want to hold over the late July earnings report.

- Suggested (small) Positions -

Long July $60 call (CERN1116G60) Entry @ $1.60

- or -

Long Aug. $62.50 call (CERN1120H62.5) Entry @ $1.60

07/07 new stop loss @ 60.90
07/07 plan on exiting July calls on Friday at the close.
07/02 New stop loss @ 58.75
07/02 Cautious traders may want to exit the July calls now for a gain

Entry on June 29 at $60.76
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 624 thousand
Listed on June 28, 2011


Joy Global - JOYG - close: 98.91 change: +2.19

Stop Loss: 89.90
Target(s): 99.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
07/07 update: Cyclical and resource names were strong performers on Thursday. JOYG rallied +2.2%. JOYG is now up almost +20% from its lows just three weeks ago. We do not want to chase this move especially with JOYG nearing resistance at $100. I am leaving our buy-the-dip trigger unchanged at $92.75 but we'll reconsider adjusting after we see the market reaction to the jobs report tomorrow.

Trigger @ $92.75 (Small Positions)

- Suggested Positions - Buy the Aug $95 call (JOYG1120H95)

Entry on June xx at $ xx.xx
Earnings Date 08/31/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on June 30, 2011


Norfolk Southern - NSC - close: 76.99 change: +0.56

Stop Loss: 71.75
Target(s): 79.75
Current Option Gain/Loss: Unopened
Time Frame: up until its earnings report.
New Positions: Yes, see trigger

Comments:
07/07 update: The Dow Jones Transportation index rallied to another new all-time high. Railroad stocks did not contribute much today. NSC managed a +0.7% gain. Currently we have a buy-the-dip trigger at $74.50 with a stop at $71.75. Our target is $79.75 but we do not want to hold over the late July earnings report.

Trigger @ $74.50

- Suggested Positions -

Buy the Aug. $75 call (NSC11H75)

07/06 adjusted entry trigger to $74.50 and stop to 71.75

Entry on July xx at $ xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on July 2, 2011


Sociedad Quimica Minera de Chile - SQM - close: 65.80 change: -0.17

Stop Loss: 59.75
Target(s): 67.25, 69.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Comments:
07/07 update: It looks like the rally in SQM could be running out of steam. The early morning spike reversed. We are expecting a pull back to jump on board the larger up trend.

We want to launch bullish positions on a dip at $63.00 with a stop loss at $59.75. If triggered our upside targets are $67.25 and $69.75. Traders could certainly aim higher but we don't want to hold over the late August earnings.

NOTE: There is always a little extra risk trading a foreign company's stock since the stock will tend to jump around based on trading back in its home country. Readers may want to keep their position size small.

Trigger @ 63.00

- Suggested Positions - These will obviously be cheaper when SQM dips to $63.

buy the Aug. $65 call (SQM1120H65)

- or -

buy the Oct. $70 call (SQM1122J70)

Entry on July xx at $ xx.xx
Earnings Date 08/30/11 (unconfirmed)
Average Daily Volume = 558 thousand
Listed on July 6, 2011


Teradata Corp. - TDC - close: 62.33 change: +0.70

Stop Loss: 54.90
Target(s): 62.00, 64.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
07/07 update: TDC is up four weeks in a row. The stock looks very over extended here. We'll reconsider adjusting our entry point after we see the market's performance following the jobs data. I am suggesting bullish positions on a dip to $58.50.

Trigger @ $58.50

- Suggested Positions -

buy the Aug. $60 call (TDC1120H60)

07/05 new trigger @ 58.50, new targets 62.00 and 64.50
07/02 New trigger @ 57.55, new stop @ 54.90, new targets @ 61.00 & 64.00

Entry on June xx at $ xx.xx
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on June 25, 2011


Toyota Motor Corp. - TM - close: 84.64 change: +0.37

Stop Loss: 79.40
Target(s): 85.75, 89.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Comments:
07/07 update: TM continues to rally and just posted its seventh gain in a row. I don't see any changes from my prior comments.

We don't want to launch new positions right here. I am suggesting we buy calls on a dip at $82.00 with a stop loss at $79.40, under the simple 200-dma. Our target is $85.75 and $89.50. We'll plan on exiting ahead of the early August earnings report.

NOTE: Shares of TM traded here in the U.S. gap open (up or down) every day as the stock adjusts for trading back home in Japan. This can be a frustrating experience with the gaps every day. We may not get triggered at $82.00. The play could be opened on a gap down below this level.

Trigger @ $82.00

- Suggested Positions -

buy the Aug. $82.50 call (TM1120H82.5) current ask $3.05

- or -

buy the Aug. $85 call (TM1120H85) current ask $1.75

Entry on July xx at $ xx.xx
Earnings Date 08/01/11 (unconfirmed)
Average Daily Volume = 539 thousand
Listed on July 05, 2011


PUT Play Updates

Scotts Miracle Gro Co. - SMG - close: 51.77 change: +1.21

Stop Loss: 52.51
Target(s): 47.50, 45.50
Current Option Gain/Loss: -38.8%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
07/07 update: Traders may want to abandon ship! SMG rallied +2.3% on no news. It could be bears trying to cover ahead of the jobs report tomorrow morning. Our risk now is SMG could gap open higher if the economic data tomorrow is bullish. We have a stop loss at $52.51. I am not suggesting new bearish positions at this time.

- Suggested (small) Positions -

Long Aug. $50 PUT (SMG1120T50) Entry @ $1.80

Entry on July 6 at $50.20
Earnings Date 08/02/11 (confirmed)
Average Daily Volume = 991 thousand
Listed on July 5, 2011


CLOSED BULLISH PLAYS

Tiffany & Co. - TIF - close: 83.05 change: +1.62

Stop Loss: 74.85
Target(s): 79.75, 84.00
Current Option Gain/Loss: -------- +119.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/07 update: TIF has hit our final target at $84.00. Two dozens retailers reported their June same-store sales today. TIF was not one of them but most of the results were better than expected giving the retail sector a big boost. The RLX retail index ended the day up +2.3%.

Shares of TIF surged to $84.49 intraday, a +3.75% move. Our exit target was hit at $84.00.

- Suggested (SMALL) Positions -

Aug. $80 call (TIF1120H80) entry @ $2.44, exit $5.35 (+119.2%)

07/07 Final Target Hit @ 84.00, Aug. calls @ +119.2%
07/05 Target hit @ 79.75, Exit July calls @ 2.80 (+47.3%), Sell half of our August $80 calls @ 2.50 (+2.4%)
07/02 new stop loss @ 74.85
07/02 Cautious traders may want to exit the July calls now with the bid at $2.57 (+35%)

chart:

Entry on June 28 at $76.80
Earnings Date 08/26/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on June 27, 2011