Editor's Note:

Lack of a debt ceiling deal and more concerns over Europe push investors on the defensive and rushing to lock in gains. Granted we all knew the market was overbought but after last week's resilience the sharp declines today were a bit surprising. It was the worst one-day loss in a month.

CAT and NSC hit our triggers so these plays are open. JOYG and SBUX were also opened and closed as these stocks hit our stops. I am recording the loss today and relisting both with new triggers to buy calls a little bit lower.

-James

Current Portfolio:


CALL Play Updates

Agrium Inc. - AGU - close: 87.08 change: -2.72

Stop Loss: 85.90
Target(s): 94.00, 98.00
Current Option Gain/Loss: -16.6% & - 9.5%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
07/11 update: Our new AGU is not off to a very good start. Shares gapped open lower at $88.54 and plunged toward the bottom of its recent trading range near $86.50 and its simple 200-dma. I would still buy calls here with our stop loss at $85.90. As a matter of fact, this is probably a better entry point. Readers may want to start small. Our exit targets are $94.00 and $98.00. FYI: The Point & Figure chart for AGU is bullish with a $104 target.

- Suggested Positions -

Long AUG $90 call (AGU1120H90) Entry @ $2.70

- or -

Long AUG $95 call (AGU1120H95) Entry @ $0.94

Entry on July 11 at $88.54
Earnings Date 08/03/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on July 9, 2011


Caterpillar - CAT - close: 108.16 change: -2.25

Stop Loss: 105.95
Target(s): 114.00
Current Option Gain/Loss: + 3.1%
Time Frame: Until the earnings report
New Positions: see below

Comments:
07/11 update: Our trade on CAT is finally open. Shares spiked down toward their rising 10-dma. CAT then spent most of the session consolidating sideways in the $107.50-108.00 zone. Our trigger to buy calls was hit at $107.50. I still consider this an aggressive, higher-risk entry point but it is an entry point. We have a stop at $105.95. Cautious traders may want to hold off and wait for the dip to $105 before initiating positions.

Don't forget that we do not want to hold over the July 22nd earnings report.

- Suggested Positions -

Long Aug. $110 call (CAT11H110) entry @ 3.15

07/11 Triggered @ 107.50.
07/09 adjusted trigger to $107.50, stop to $105.95, target to $114.00

Entry on July 11 at $107.50
Earnings Date 07/22/11 (confirmed)
Average Daily Volume = 8.4 million
Listed on July 2, 2011


Cerner Corp. - CERN - close: 62.83 change: -1.23

Stop Loss: 61.45
Target(s): 64.75
Current Option Gain/Loss: +46.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/11 update: CERN has pulled back to short-term support near the $63.00 area. I would not be surprised to see CERN slip to its 10-dma near $62 before rebounding higher. I am not suggesting new positions at this time.

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

- Suggested (small) Positions -

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

07/09 new stop loss @ 61.45
07/08 Planned exit. July calls @ +125.0%
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: 94.47 change: -2.78

Stop Loss: 94.75
Target(s): 102.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
07/11 update: Ouch! Well that certainly did not go as planned. Traders were in a sell everything mood and JOYG gapped open lower at $95.97 and then plunged to $93.40 intraday. That means the stock opened under our trigger, opening our trade, and then hit our new stop loss at $94.75, closing the trade. I am listing this as a loss below. However, JOYG still offers potential here. I am relisting this trade with a buy-the-dip trigger at $93.00 and a stop loss at $91.40. More aggressive traders could place their stop under support at $90.00 instead. Our upside target is $102.00. I would keep positions small.

Trigger @ $93.00 (Small Positions)

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

07/11 relist this play with a trigger at $93.00 and stop @ 91.40

07/11 JOYG hit our trigger at $96.00 (actually $95.97) and then hit our stop at $94.75. The option opened at $2.32 (ask) and we were stopped out at $2.20 (bid) for a loss of -5.1% We were fortune this loss was not larger!

07/09 Adjusted trigger to $96.00, stop to $94.75, target to $102.00, and option strike to Aug. $100 call.

chart:

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: 74.67 change: -1.01

Stop Loss: 73.40
Target(s): 79.75
Current Option Gain/Loss: + 2.5%
Time Frame: up until its earnings report.
New Positions: see below

Comments:
07/11 update: The market sell-off today was enough to push NSC under support at $75.00 but not under $74.00. Our trigger to buy calls was hit at $74.50. The stock actually gapped open lower at $74.75 and spent the entire day consolidating sideways in a tight range. I would still launch new positions now. We do want to keep our position size small. Our target is $79.75 but we do not want to hold over the late July earnings report.

- Suggested (SMALL) Positions -

Long Aug. $75 call (NSC11H75) Entry @ $1.95

07/11 triggered @ 74.50
07/09 new stop loss @ 73.40. Small positions!
07/06 adjusted entry trigger to $74.50 and stop to 71.75

chart:

Entry on July 11 at $74.50
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on July 2, 2011


Panera Bread Co. - PNRA - close: 130.12 change: -1.82

Stop Loss: 127.95
Target(s): 138.50, 144.00
Current Option Gain/Loss: -14.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/11 update: Hmm... PNRA gapped open lower at $130.61 and then suddenly shot higher to a new high before reversing again. Overall the profit taking in PNRA was not that bad. Cautious traders may want to wait on launching new positions but PNRA is still holding near the $130 level and still above its 10-dma. If we do get stopped out at $127.95 I'd like to try again on a dip or a bounce near $125.00. We do not want to hold over the late July earnings report.

Don't forget that PNRA has significant short interest and could see a short squeeze higher. FYI: The most recent data listed short interest at 8.6% of the small 28.2 million-share float.

- Suggested Positions -

Long AUG $135 call (PNRA1120H135) Entry @ $3.40

Entry on July 11 at $130.61
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume = 337 thousand
Listed on July 9, 2011


Starbucks Corp. - SBUX - close: 39.74 change: -0.61

Stop Loss: 37.75
Target(s): 44.00
Current Option Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
07/11 update: SBUX weathered the market sell-off pretty well. Shares gave up -1.5% but failed to breakdown to new lows. That doesn't mean it won't. Unfortunately, the low today just happened to be $39.45, which is our stop loss. We will mark this as a loss below but we're reloading the play. However, this time we'll use a buy-the-dip entry point at $38.75 and a stop loss at $37.75. We do not want to hold positions over the late July earnings report.

- Suggested (Small) Positions -

buy the AUG $40.00 call (SBUX1120H40)

07/11 Our first attempt at a call play on SBUX did not pan out. Shares opened lower at $39.98 and then hit our relatively tight stop loss at $39.45. The option opened at $1.49 (ask) and we were stopped out at $1.22 (bid)for an -18% loss.
We are reloading this trade with a buy-the-dip trigger at $38.75.

chart:

Entry on July xx at $ xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 6.8 million
Listed on July 9, 2011


VMware, Inc. - VMW - close: 102.13 change: -2.87

Stop Loss: 99.75
Target(s): 109.75, 114.00
Current Option Gain/Loss: -11.2%
Time Frame: seven trading days
New Positions: see below

Comments:
07/11 update: VMW did not see much of a gap down. It opened at $103.19 and actually tried to rally but didn't get very far. VMW dipped to $100.91 before trying to pare its losses. I see today's -2.7% decline as an opportunity to jump into VMW at a better entry point and would still buy calls now.

We only have a few trading days. VMW is due to report earnings on July 19th and we do not want to hold over the announcement. I would keep positions small. VMW can be a little volatile. I am listing our stop at $99.75. Our targets are $109.75 and $114.00.

- Suggested Positions -

Long AUG $110 call (VMW1120H110) Entry @ $3.10

Entry on July 11 at $103.19
Earnings Date 07/19/11 (confirmed)
Average Daily Volume = 1.9 million
Listed on July 9, 2011