Editor's Note:

The early morning rally in stocks eventually faded. The sell-off was gaining steam into the closing bell.

-James

Current Portfolio:


CALL Play Updates

Agrium Inc. - AGU - close: 88.65 change: +1.42

Stop Loss: 85.90
Target(s): 94.00, 98.00
Current Option Gain/Loss: + 7.4% & +22.3%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
07/13 update: Unlike the market's major averages, shares of AGU managed to keep a decent chunk of its gains today. The stock closed up +1.6% but did slide from its intraday highs. I am hesitant to launch new positions with the stock market looking vulnerable here. Readers might want to buy another dip or bounce near $87 otherwise I'd wait for a move past $90.00. 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: 108.64 change: +1.71

Stop Loss: 105.95
Target(s): 114.00
Current Option Gain/Loss: + 9.5%
Time Frame: Until the earnings report
New Positions: see below

Comments:
07/13 update: CAT was one of the Dow Industrials' best performers this morning with a rally above $110. Shares eventually trimmed its gains but still managed to close up +1.59%. The market's late day sell-off is worrisome and I am somewhat hesitant to launch new positions here. We have a stop at $105.95. Aggressive traders willing to handle the risk may want to lower their stop under the $105 level.

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: 62.56 change: +0.27

Stop Loss: 61.45
Target(s): 64.75
Current Option Gain/Loss: +37.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/13 update: CERN struggled to maintain its gains. The stock saw a three-hour slide lower this afternoon. I do not see any changes from my prior comments. More conservative traders may want to exit early. We have a stop loss at $61.45. I would be tempted to buy calls again if we saw a bounce from support near $60 and its 50-dma.

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


Diamond Foods Inc. - DMND - close: 77.30 change: +0.68

Stop Loss: 73.25
Target(s): 79.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
07/13 update: DMND did not see the same late afternoon sell-off evident in the major indices today. Shares of DMND were seeing some volatility in the final minutes of trading. We are still waiting for a dip to the $75.00 mark. More conservative traders could wait for a dip closer to the 30-dma as their entry point instead.

If triggered our first target is $79.50. FYI: The Point & Figure chart for DMND is bullish with a $90 target.

Trigger @ $75.00

- Suggested Positions -

buy the AUG $75 call (DMND1120H75) -small positions-

Entry on July xx at $ xx.xx
Earnings Date 10/05/11 (unconfirmed)
Average Daily Volume = 237 thousand
Listed on July 11, 2011


Joy Global - JOYG - close: 94.87 change: +1.09

Stop Loss: 91.40
Target(s): 102.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
07/13 update: Resource related names were some of the best performers today thanks to the strong Chinese economic data, talk of a potential QE3 program, and a drop in the U.S. dollar. Yet JOYG's gains faded from their midday highs. Shares still managed to close up +1.1%.

Currently our new plan is to buy calls on a dip at $93.00 with a stop 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.

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: 74.61 change: +0.69

Stop Loss: 73.40
Target(s): 79.75
Current Option Gain/Loss: + 0.0%
Time Frame: up until its earnings report.
New Positions: see below

Comments:
07/13 update: The railroad stocks followed the market up and then followed the market down although NSC closed with a +0.9% gain. I am still hesitant to launch new positions here. The option is back to breakeven. Cautious traders could exit here to avoid a loss.

- Suggested (SMALL) Positions -

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

07/13 the option is back to breakeven. readers could exit here.
07/12 NSC has broken support at $74. Readers may want to exit early
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

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: 131.15 change: +1.54

Stop Loss: 128.35
Target(s): 138.50, 144.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/13 update: PNRA almost hit a new high but the rally ran out of steam under the $133 level. The stock pared its gains back to just +1.1%. PNRA is essentially near the top of its two-week trading range. I would not launch new positions here. Wait for a new bounce from $130 or wait for a new rise past $133.

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

07/13 option back to breakeven (+0.0%)
07/12 new stop loss @ 128.35

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: 39.58 change: +0.01

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:
07/13 update: The action today looks a lot like yesterday. SBUX's early morning rally attempt failed in what is part of a growing trend of lower highs. Shares look poised to breakdown under support near the $39.50 area.

Currently our plan is to buy calls on a dip at $38.50. We do not want to hold positions over the late July earnings report.

Trigger @ $38.50

- Suggested (Small) Positions -

buy the AUG $40.00 call (SBUX1120H40)

07/12 adjust trigger to $38.50
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.

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: 100.28 change: -0.12

Stop Loss: 99.75
Target(s): 109.75, 114.00
Current Option Gain/Loss: -30.6%
Time Frame: seven trading days
New Positions: see below

Comments:
07/13 update: Warning! VMW is struggling here. The intraday pop to $103.67 faded away and shares closed in negative territory. At this point, if the market is down tomorrow, I would expect VMW to hit our stop loss at $99.75. More conservative traders may want to exit early as soon as you can.

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.

- 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