Editor's Note:

The U.S. markets are growing increasingly worried over the debt ceiling fiasco. The bearish economic data today only compounded the problem.

We had NUS and POT both get stopped out.

I am removing all of our entry points for ADS, OTEX and QQQ. We'll wait and see what happens tomorrow before we consider any new bullish positions. Don't open new bullish positions in these equities.

-James

Current Portfolio:


CALL Play Updates

Alliance Data Systems - ADS - close: 99.18 change: -1.23

Stop Loss: 96.00
Target(s): 104.50. 107.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/27 update: ADS erased yesterday's gains with a -1.2% decline today. The stock fared better than most of the market's major indices. Our trade is not open yet. The plan was to buy calls if both ADS and the S&P 500 opened higher this morning. That did not happen. Given the market's accelerated weakness today I'm thinking we may want to wait and buy calls on ADS near $97.50 instead. For tomorrow I am suggesting no action. We'll remove any entry point strategy and just sit back and wait to see what happens. Thursday night we'll re-evaluate and plan an entry point strategy for Friday if appropriate.

No Entry Point Today. We will re-evaluate our strategy on Thursday night.


07/27 Our trade was not opened. I am removing our entry point (no trade) until Thursday night and we'll re-evaluate.

Entry on July xx at $ xx.xx
Earnings Date 07/21/11
Average Daily Volume = 825 thousand
Listed on July 26, 2011


Agrium Inc. - AGU - close: 88.93 change: -2.11

Stop Loss: 87.75
Target(s): 94.00, 98.00
Current Option Gain/Loss: -18.5% & -30.8%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
07/27 update: It was an ugly day for the markets. AGU was already correcting lower and appeared like it was headed for the $90 level. Yet today's market-wide sell-off pushed AGU to a -2.3% decline. The stock has broken down under what should have been support at $90.00. Now we could see AGU dip toward its simple 200-dma. If the sell-off continues tomorrow there is a good chance that we will get stopped out at $87.75. More conservative traders may want to abandon ship immediately. I am not suggesting new bullish positions at this time.

- Suggested Positions -

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

- or -

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

07/21 New stop @ 87.75
07/19 Breakout past $90.00 is a new entry point.
07/19 new stop @ 86.90

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


Helmerich & Payne Inc. - HP - close: 70.39 change: -2.18

Stop Loss: 69.75
Target(s): 76.50
Current Option Gain/Loss: -28.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/27 update: HP was not immune to the market's sell-off. Shares plunged toward $70. The stock managed an intraday rebound this morning but it failed under $72. Shares faded back toward its lows for the session. The $70.00 level should be support but if the market continues to drop tomorrow I would expect a breakdown. Cautious traders will want to exit immediately. Our plan is to close this trade tomorrow at the closing bell to avoid holding over earnings on Friday morning.

- Suggested Positions -

Long AUG $75 call (HP1120H75) Entry @ $1.25

07/26 new stop loss @ 69.75
07/23 new stop loss @ 68.45
07/23 Plan to exit on July 28th at the close

Entry on July 20 at $71.49
Earnings Date 07/29/11 (confirmed)
Average Daily Volume = 1.3 million
Listed on July 19, 2011


Open Text Corp. - OTEX - close: 68.03 change: -1.37

Stop Loss: 67.45
Target(s): 74.50
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
07/27 update: We are still unopened with this OTEX trade. Shares opened lower so the conditions to buy calls were not met. The stock is now testing support at the bottom of its two-week trading range near $68.00. A breakdown here would be bearish. I am not suggesting new positions tonight. We'll wait and see what happens tomorrow and then re-evaluate our entry point strategy. So tomorrow we're just spectators with no plans for an entry.

Earlier Comments:
A breakout over $70.00 could produce another short squeeze. The most recent data listed short interest at more than 10% of the 55.9 million-share float. We do not want to hold over the August earnings report.

No Entry Point Today. We will re-evaluate our strategy on Thursday night.

- Suggested Positions -


07/27 trade is still not open. We are temporarily removing our entry point for tomorrow. We will re-evaluate this play on Thursday night.

Entry on July xx at $ xx.xx
Earnings Date 08/10/11 (unconfirmed)
Average Daily Volume = 300 thousand
Listed on July 23, 2011


PowerShares QQQ - QQQ - close: 58.09 change: -1.54

Stop Loss: 57.75
Target(s): 62.50, 64.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/27 update: We can't get an entry point in this ETF. The plan was to buy calls if the Qs opened positive. Instead the Qs gapped open lower. The NASDAQ was an underperformer today. The QQQ fell -2.5%. If this sell-off continues we might see the QQQ dip toward its 50-dma near $57.

I am temporarily removing our entry point. Tomorrow I am suggesting we just sit back and watch. We will re-evaluate our strategy on Thursday night.

No Entry Point Strategy for Thursday

07/27 We are removing our entry point for Thursday. We'll re-evaluate our strategy on Thursday night.

Entry on July xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 61.7 million
Listed on July 23, 2011


PUT Play Updates

FactSet Research - FDS - close: 92.03 change: -2.73

Stop Loss: 97.05
Target(s): 90.50, 86.00
Current Option Gain/Loss: + 5.7% & + 2.0%
2nd Position Gain/Loss: +27.5% Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/27 update: FDS plunged toward the $92.00 level and closed with a -2.88% decline. I was surprised that volume wasn't higher on the decline. This is a new low for the year. We will lower our stop loss down to $97.05. I am not suggesting new positions at this time.

Earlier Comments:
Our targets are $90.50 and $86.00 but the $90.00 level is support and FDS will probably see a bounce from this level. The Point & Figure chart for FDS is bearish with a $64 target.

- Suggested (SMALL) Positions -

Long AUG $95 PUT (FDS1120T95) Entry @ $3.50

- or -

Long SEP $90 PUT (FDS1117U90) Entry @ $2.40

- 2nd Position, listed 7/26 -

Long Aug $95 PUT (FDS1120T95) Entry @ $2.90*

07/27 new stop loss @ 97.05
07/27 entry on the 2nd position (Aug.95 put) is an estimate
07/26 New stop loss @ 98.25, Adding positions

Entry on July 18 at $94.48
Earnings Date 09/21/11 (unconfirmed)
Average Daily Volume = 363 thousand
Listed on July 16, 2011


Toro Co. - TTC - close: 55.07 change: -2.15

Stop Loss: 58.55
Target(s): 55.25, 52.50
Current Option Gain/Loss: + 5.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/27 update: Our new TTC put play is off to a strong start. Shares opened at $56.82 and then plunged to a -3.7% loss and closed at new lows for the year. Our first target was hit at $55.25.

I would not launch new positions here. Look for a failed rally type of move near $57.00 before considering new positions.

FYI: I will confess that I'm surprised the puts did not see bigger gains today!

- Suggested Positions -

Long SEP $55 PUT (TTC1117U55) Entry @ $1.90*

07/27 1st Target Hit @ 55.25, Option @ $2.00 (+5%)
07/27 entry price is an estimate. Option did not trade today

chart:

Entry on July 27 at $56.82
Earnings Date 08/18/11 (unconfirmed)
Average Daily Volume = 167 thousand
Listed on July 26, 2011


CLOSED BULLISH PLAYS

Nu Skin Enterprises - NUS - close: 38.77 change: -1.01

Stop Loss: 39.40
Target(s): 44.00
Current Option Gain/Loss: -47.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/27 update: NUS followed the market lower. Shares opened at $39.59 and soon thereafter hit our stop loss at $39.40. NUS eventually closed with a -2.5% decline. The next level of support is $38.00 and its 50-dma.

- Suggested Positions -

AUG $40 call (NUS1120H40) Entry @ $2.10, exit $1.10 (-47.6%)
07/27 stopped out @ 39.40
07/26 new stop loss @ 39.40, readers may want to exit early now!
07/23 new stop loss @ 38.90
07/20 Entered at $40.80
07/19 buy calls tomorrow if NUS and S&P 500 are both up at the open.
07/19 new stop loss @ 38.40
07/18 Our play has not been opened yet. We're going to wait 24 hours and reconsider.

chart:

Entry on July 20 at $40.80
Earnings Date 08/02/11 (confirmed)
Average Daily Volume = 700 thousand
Listed on July 16, 2011


Potash Corp. - POT - close: 59.18 change: -1.93

Stop Loss: 59.90
Target(s): 63.75, 68.00
Current Option Gain/Loss: - 6.2%
Time Frame: exit prior to July 28th
New Positions: see below

Comments:
07/27 update: The stock market's widespread sell-off pushed POT to a -3.1% decline. Shares hit our new stop loss at $59.90 before lunchtime today. We were planning to exit today anyway to avoid holding over earnings.

- Suggested Positions -

AUG $60 call (POT1120H60) entry @ $2.40, exit $2.25 (-6.2%)
07/27 stopped out @ 59.90
07/26 new stop loss @ 59.90, prepare to exit tomorrow at the close
07/25 new stop loss @ 59.60
07/23 New stop loss @ 58.95
07/23 Time is running out. Prepare to exit on Wednesday
07/19 Play is opened. POT gapped open at $59.98
07/18 We are still unopened. Try again. Both POT and S&P 500 need to open higher on July 19th to buy calls.
07/18 new stop @ 56.70

chart:

Entry on July 19 at $59.98
Earnings Date 07/28/11 (confirmed)
Average Daily Volume = 7.4 million
Listed on July 16, 2011