Editor's Note:

It was another volatile session for the markets, especially the last couple of hours. Of course the market is usually a little schizophrenic after a fed meeting. Stocks surged on short covering. The S&P 500 index saw a +6.4% gain off its intraday lows near 1100. The rebound in the Dow Industrials produced a +635 point gain from its intraday low of 10,604.

The bounce probably continues tomorrow but previous support levels are all new resistance now.

FYI: Our GMCR trade hit our first target this afternoon.

-James

Current Portfolio:


CALL Play Updates

Core Labs - CLB - close: 99.81 change: +0.80

Stop Loss: n/a
Target(s): 104.90, 109.75
Current Option Gain/Loss: -80.0% & +40.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/09 update: CLB continues to weather the volatility storm pretty well. Traders bought the dip near technical support at its 200-dma. The afternoon bounce looks like a new entry point to buy calls. We do not have a stop loss on this trade but more conservative traders could place a stop under today's low instead.

The volatility is doing wacky things to CLB's option prices. The spreads are too wide to trade the August calls right now. Septembers are not much better.

Earlier Comments:
It's an aggressive trade so keep your position size small. FYI: August options expire in less than two weeks.

- Suggested (SMALL) Positions -

Long AUG $105 call (CLB1120H105) Entry $1.25*

- or -

Long SEP $105 call (CLB1117I105) Entry $2.00
08/08 we are REMOVING the stop loss for this trade
08/05 stop loss @ 95.45, under the 200-dma
08/05 play opened.
08/05 *entry price is an estimate. option did not trade today
08/04 Adjusted our strategy for the decline. New stop loss @ 95.80. New targets are $104.90 and $109.75. Buy calls if both CLB and S&P 500 are positive at the open tomorrow.

Entry on August 5 at $100.23
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 526 thousand
Listed on August 2, 2011


Cabot Oil & Gas - COG - close: 65.64 change: +6.34

Stop Loss: n/a
Target(s): 69.75, 72.00
Current Option Gain/Loss: + 69.2% & +22.2%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/09 update: Wow! After yesterday's murderous -11% plunge the stock recouped most of that loss today with a +10.6% gain. The stock gapped open higher and rallied back above potential resistance at the $65.00 level and the 50-dma. Positive comments on the Mad Money show last night could have played a factor in today's rally. I would be tempted to buy calls here.

We do not have a stop loss on our trade. It's up to you if you want to try and use a stop in this volatile market.

Earlier comments:
This is an aggressive trade. The plan was to keep our position size small to limit our risk. FYI: August options expire in less than two weeks.

- Suggested (SMALL) Positions -

Long AUG $70 call (COG1120H70) Entry @ $0.65

- or -

Long SEP $70 call (COG1117I70) Entry $ $2.25*

08/08 * entry price on the Sept. $70 call is an estimate since the option did not trade on Monday.
08/08 COG gapped open lower at $64.23. No Stop Loss.

Entry on August 8 at $64.23
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on August 6, 2011


Green Mountain Coffee Roasters - GMCR - close: 99.49 change: +10.09

Stop Loss: n/a
Target(s): 99.50, 107.50
Current Option Gain/Loss: +129.9% & + 90.4%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/09 update: Target achieved. GMCR was another big winner today. The stock gapped open higher above $92 and eventually surged to an +11.2% gain. Our first target was hit at $99.50 this afternoon.

Please note that I am adjusting our second profit target from $104 to $107.50.

We do not have a stop loss on this trade. More conservative traders may want to try and use a stop but this is a very volatile stock and market.

Earlier Comments:
As a high-risk, speculative play we wanted to keep our position size very small. FYI: August options expire in less than two weeks. We're expecting the bounce to be fast and sharp but you may want to trade September calls for the extra time.

- Suggested (SMALL) Positions -

Long AUG $95 call (GMCR1120H95) Entry @ $2.74

- or -

Long SEP $100 call (GMCR1117I100) Entry $3.65
08/09 adjusting 2nd target to $107.50
08/09 1st target hit at $99.50.
Aug. $95 call bid $6.30 (+129.9%), Sep. $100 call bid $6.95 (+90.4%)
08/08 we are not using a stop loss on this trade

chart:

Entry on August 8 at $91.26
Earnings Date 12/08/11 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on August 6, 2011


O'Reilly Automotive - ORLY - close: 59.99 change: +2.48

Stop Loss: n/a
Target(s): 63.75, 66.00
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Comments:
08/09 update: Uh-oh! ORLY is starting to rally without us. This stock showed uncommon strength over the last few days. Our buy-the-dip trigger has not been hit. Today saw ORLY rallied through technical resistance at the 200-dma and close up +4.3%.

I am adjusting our entry point strategy. Instead of buying the dip we will buy calls tomorrow morning if both ORLY and the S&P 500 both open in positive territory. Use a small position size to limit your risk. The option spreads have gotten a lot wider on us, which is probably due to all the market volatility. We are not using a stop loss, which is another reason to keep your position size small.

I am adjusting our targets to $63.75 and $66.00.
FYI: August options expire in less than two weeks. We're expecting the bounce to be fast and sharp but you may want to trade September calls for the extra time.

buy calls if ORLY and S&P500 both open positive tomorrow.

- Suggested Positions -

buy the AUG $60 call (ORLY1120H60)

- or -

buy the SEP $60 call (ORLY1117I60)

Entry on August xx at $ xx.xx
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on August 6, 2011


SPDR S&P500 ETF - SPY - close: 117.48 change: +5.22

Stop Loss: n/a
Target(s): 119.75, 122.50
Current Option Gain/Loss: +22.3% & +18.8%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/09 update: It was another crazy day in the stock market and the SPY produced a huge +6.5% rally off its intraday low. I warned readers yesterday to expect a dip to $110 and traders could use a dip toward that level as a new entry point. If you missed the entry point readers could still buy calls now but keep your position size very small! The 120, 122.50, and 125 levels are all overhead resistance now. Our first target to take profits is at $119.75.

We are not using a stop loss on this trade but conservative traders may want to try.

Earlier Comments:
FYI: August options expire in two weeks. We're expecting the bounce to be fast and sharp but you may want to trade September calls for the extra time.

- Suggested (SMALL) Positions -

Long AUG $118 call (SPY1120H118) Entry $2.15

- or -

Long SEP $120 call (SPY1117I120) Entry $2.55

08/08 trade opened at $115.00. We are not using a stop loss.

Entry on August 8 at $115.00
Earnings Date --/--/--
Average Daily Volume = 235 million
Listed on August 6, 2011


U.S. Oil Fund - USO - close: 31.62 change: +0.34

Stop Loss: n/a
Target(s): $37.50, 40.00
Current Option Gain/Loss: - 1.9%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
08/09 update: USO is our new oil play on oil prices. I suggested nimble traders look for a dip near $30.00 as an alternative entry point. Our plan was to buy calls at the open. The USO opened at $31.97 and then dipped to $30.31 this afternoon before paring its losses. I would still buy calls here at current levels.

Earlier Comments:
This is another lottery-ticket style of play. We are not listing a stop loss. We plan on holding this trade for several weeks.

- Suggested Positions -

Long NOV $34 call (USO1119K34) Entry $2.05

Entry on August 9 at $31.97
Earnings Date --/--/--
Average Daily Volume = 10.7 million
Listed on August 8, 2011


PUT Play Updates

CBOE Volatility Index - VIX - close: 35.06 change: -12.94

Stop Loss: n/a
Target(s): 26.00, 22.50
Current Option Gain/Loss: -74.0% & -22.5%
Second Position Gain/Loss: -27.7% & + 24.0%
Third Position Gain/Loss: +19.2%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/09 update: After a +50% rally yesterday the VIX gave back -26.9% today. The index opened at 42.12 but hovered around the 40 level most of the day. There was some confusion and fear in the market after the FOMC comments and the VIX spiked to 47.50 again only to reverse sharply on the stock market's rally.

Yesterday I listed a new entry point to buy the September 30 puts at the open this morning.

Earlier Comments:
I am not listing a stop loss on this trade. We should consider this a higher-risk, speculative trade. I'm setting our targets at 26.00 and 22.50. NOTE: August VIX options expire after the 17th of the month. You may want to buy Septembers instead.

- Suggested Positions -

Long AUG $25.00 PUT (VIX1117T25) Entry $2.50

- or -

Long SEP $25.00 PUT (VIX1121U25) Entry $4.00

- Second Position, entered at the open on Monday, Aug. 8th -
(very small positions)

Long AUG $25.00 PUT (VIX1117T25) Entry $0.90

- or -

Long SEP $25.00 PUT (VIX1121U25) Entry $2.50

- 3rd Position, listed Aug. 8th, Open Aug. 9th @ open. -

Long SEP $30.00 PUT (VXI1121U30) Entry $5.70

08/08 3rd position listed to buy at the open on Aug. 9th
08/08 2nd position was filled the open.

Entry on August 5 at $28.48
Earnings Date --/--/--
Average Daily Volume = xxx
Listed on August 4, 2011