Editor's Note:

Don't forget: August options expire in five days!

Both ANF and DECK hit our profit targets to take some money off the table. We've have tweaked our entry point on ORLY again. The VIX is retreating but we're running out of time for August options.

-James

Current Portfolio:


CALL Play Updates

Abercrombie & Fitch Co - ANF - close: 70.10 change: +1.62

Stop Loss: n/a
Target(s): 69.75, 73.50
Current Option Gain/Loss: +33.1% & + 26.2%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/13 update: ANF continues to rally and shares outperformed the market on Friday with a +2.3% gain. The stock did stall at resistance near $70.00 but our first target to take profits was hit at $69.75. The bid on our options were $2.66 for the Aug. $70 call and at $5.00 for the Sept. $70 call.

Please note that we only have two days left. ANF is due to report earnings on Aug. 17th before the opening bell. We will plan on exiting this position on Tuesday at the closing bell to avoid holding over earnings. I am not suggesting new positions at this time.

Earlier Comments:
This is an aggressive, higher-risk trade. ANF is due to report earnings on August 17th. We do not want to hold over the report. I am listing both Aug. and Sept. calls. Keep in mind August calls expire in less than two weeks. We are not listing a stop loss on this trade but if you buy September calls you may want to reconsider and add a stop loss.

- Suggested (SMALL) Positions -

Long AUG $70 call (ANF1120H70) Entry $2.08

- or -

Long SEP $70 call (ANF1117I70) Entry $4.00

08/13 prepare to exit in two days at the close
08/12 1st target hit at $69.75.
bid on the Aug. $70 call $2.66 (+27.8%)
bid on the Sep. $70 call $5.00 (+25.0%)
08/11 conditions to buy calls were met. ANF opened at $66.46.

chart:

Entry on August 11 at $66.46
Earnings Date 08/17/11 (confirmed)
Average Daily Volume = 2.8 million
Listed on August 9, 2011


Core Labs - CLB - close: 106.92 change: +1.59

Stop Loss: n/a
Target(s): 104.90, 109.75
Current Option Gain/Loss: +112.0% & +125.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/13 update: CLB continued to rally even though oil posted a minor decline on Friday. The OIX index traded in line with the market but the OSX oil services index outperformed. CLB added +1.5% on Friday and is nearing potential technical resistance at the 50-dma. I am not suggesting new bullish positions at current levels. Nimble traders might consider buying calls on an intraday dip or bounce in the $104-102 area. Our final target is $109.75. Aggressive traders may want to aim higher (maybe $112 or $114). Cautious trades will want to consider an early exit soon if you're holding August options. Even with the wide spread the August call is up $112%.

Sadly the option spreads on CLB are still too wide. We will most likely not trade CLB again until these improve.

Earlier Comments:
It's an aggressive trade so keep your position size small.

- Suggested (SMALL) Positions -

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

- or -

Long SEP $105 call (CLB1117I105) Entry $2.00
08/11 1st target hit @ $104.90.
Aug. $105 call bid @ $1.80 (+44%)
Sep. $105 call bid @ $3.90 (+95%)
08/10 no new positions at this time.
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.

chart:

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


Deckers Outdoor - DECK - close: 93.60 change: +6.11

Stop Loss: n/a
Target(s): 93.50, 97.00
Current Option Gain/Loss: +235.5% & +80.8%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/13 update: Target achieved. DECK was another big performer on Friday. The stock gapped open higher near $90 and above its 50 and 100-dma. This probably fueled some short covering. DECK closed the day +6.9%. Our first target was hit at $93.50. Shares are arguably short-term overbought here. I am not suggesting new positions at this time.

Our final target is $97.00. Cautious traders may want to add a stop loss if you're holding September calls and exit completely if you're holding August calls.

Earlier Comments:
I do consider this an aggressive trade. DECK can be a volatile normally and in this market the moves get a little crazy. We definitely want to keep our position size small. I am not listing a stop loss on this trade.

- Suggested (SMALL) Positions -

Long AUG $90 call (DECK1120H90) Entry $1.52

- or -

Long SEP $90 call (DECK1117I90) Entry $4.70

08/12 1st target hit @ 93.50
bid on Aug. $90 call @ $5.05 (+232.2%)
bid on Sep. $90 call @ $8.45 (+79.7%)

chart:

Entry on August 11 at $83.53
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on August 9, 2011


Green Mountain Coffee Roasters - GMCR - close: 103.58 change: - 0.35

Stop Loss: n/a
Target(s): 99.50, 107.50
Current Option Gain/Loss: +241.2% & +154.7%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/13 update: After a very impressive bounce this past week GMCR hit the pause button on Friday. Shares opened higher but immediately fell from almost $105 to $101.68. The stock pared its losses and traded sideways the rest of the day. You could argue GMCR is very short-term overbought. I'd probably look for some short-term support at $100. We're not suggesting new bullish positions at this time. Our final target is $107.50.

If you're holding September calls you may want to add a stop loss. If you're holding August calls you'll want to consider an early exit now.

Earlier Comments:
As a high-risk, speculative play we wanted to keep our position size very small. We are not using a stop loss on this play.

- Suggested (SMALL) Positions -

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

- or -

Long SEP $100 call (GMCR1117I100) Entry $3.65
08/10 Consider exiting all August options now
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: 60.23 change: +1.21

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

Comments:
08/13 update: The fact that the market did not sell off into the weekend is encouraging. We will adjust our entry point strategy given that ORLY displayed relative strength on Friday and closed above potential resistance at $60.00 and its 100-dma. I am suggesting we buy calls now if both ORLY and the S&P500 open positive on Monday morning.

Earlier Comments:
Use a small position size to limit your risk.

buy calls if ORLY and S&P500 open positive on Monday morning.

- Suggested (small) Positions -

buy the SEP $60 call (ORLY1117I60)
08/13 adjusted entry point. removed Aug. strike
08/10 new trigger at $55.00
08/09 adjusted targets to $63.75 and $66.00.

chart:

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: 118.12 change: +0.79

Stop Loss: n/a
Target(s): 119.75, 122.50
Current Option Gain/Loss: + 2.3% & +30.1%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/13 update: The S&P 500 produced its first back-to-back gain in three weeks on Friday. If you ignored the first four days of the week, Friday seemed like a typical summer Friday without much direction. The market still looks oversold given the big drop from its late July highs but I would hesitate to launch new positions here. Our first target to take profits is at $119.75. If you are holding August options I would consider an early exit now. We don't have much time left for Aug. calls.

Earlier Comments:
We are not using a stop loss on this trade.

- 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.

chart:

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: 33.23 change: -0.07

Stop Loss: n/a
Target(s): $37.50, 40.00
Current Option Gain/Loss: +17.5%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
08/13 update: The early morning rally in oil prices fizzled and the USO failed at its simple 10-dma. Readers may want to look for another dip into the $32-30 zone before initiating new positions. Our time frame for this trade is several weeks, which is why we are using November calls. We're not using a stop loss on this trade so keep your position size small!

Earlier Comments:
This is another lottery-ticket style of play.

- Suggested Positions -

Long NOV $34 call (USO1119K34) Entry $2.05

chart:

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: 36.36 change: - 2.64

Stop Loss: n/a
Target(s): 26.00, 22.50
Current Option Gain/Loss: -100.0% & -45.0%
Second Position Gain/Loss: -100.0% & - 12.0%
Third Position Gain/Loss: - 7.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/13 update: The volatility index (VIX) closed near its lows for the weak. These huge swings in the market are very unusual and should not last very long. As things normalize the VIX should plunge from these highs. The index lost -6.7% on Friday and is already down -24% from its highs of the week. Unfortunately, the VIX may not fall fast enough for our August options. August VIX options expire midweek.

I am not suggesting new positions here but nimble traders might consider buying some September puts.

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.

chart:

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