Editor's Note:

Stocks extend their gains to three days in a row. CLB hit our final target and the SPY hit our first target. Meanwhile ORLY, UTX and WFM were all opened.

Please note we want to exit our Aug. calls on the GMCR trade.

-James

Current Portfolio:


CALL Play Updates

Abercrombie & Fitch Co - ANF - close: 71.71 change: +1.61

Stop Loss: 69.50
Target(s): 69.75, 73.50
Current Option Gain/Loss: +53.8% & + 37.5%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/15 update: ANF spent the first half of Monday drifting sideways before finally rallying late in the day. The stock has cleared resistance at $70 and its 50-dma with today's +2.2% gain. Now the stock is up four out of the last five sessions and starting to look a little bit short-term overbought.

More conservative traders may want to exit immediately. We are planning to exit tomorrow (Tuesday) at the closing bell to avoid holding over earnings. I am adding a stop loss at $69.50 just in case stocks tank tomorrow.

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.

- Suggested (SMALL) Positions -

Long AUG $70 call (ANF1120H70) Entry $2.08

- or -

Long SEP $70 call (ANF1117I70) Entry $4.00

08/15 new stop loss @ 69.50. Prepare to exit tomorrow at the close
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.

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


Deckers Outdoor - DECK - close: 94.32 change: +0.72

Stop Loss: n/a
Target(s): 93.50, 97.00
Current Option Gain/Loss: +248.6% & +82.9%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/15 update: After Friday's huge gain in DECK the rally stalled a little bit today. Shares only added +0.7%. Shares are looking a little overbought here with last week's low under $80. Conservative traders may want to add a stop loss or take profits now. Our final target is $97.00. I am not suggesting new positions at this time.

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%)

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: 102.38 change: - 1.20

Stop Loss: n/a
Target(s): 99.50, 107.50
Current Option Gain/Loss: +190.1% & +119.1%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/15 update: Warning! The S&P500 index rallied +2.1% and the NASDAQ gained +1.8% and yet GMCR lost -1.1%. It's unusual to see relative weakness in this stock. GMCR failed at the $105 level this morning.

I am suggesting we exit our August calls immediately! If you're holding September calls you may want to add a stop loss. I am not suggesting new positions at this time.

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 -

AUG $95 call (GMCR1120H95) Entry @ $2.74, exit $7.95 (+190.1%)

- or -

Long SEP $100 call (GMCR1117I100) Entry $3.65
08/15 exit August $95 calls immediately. Bid @ $7.95 (+190.1%)
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

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: 60.74 change: +0.51

Stop Loss: n/a
Target(s): 63.75, 66.00
Current Option Gain/Loss: + 10.5%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/15 update: Our ORLY trade is finally open. Both the stock and the S&P500 opened higher, which was our condition to launch positions. ORLY hovered near the $60 level this morning but finally rallied off this round-number support. Unfortunately today's +0.8% gain paled in comparison to the +2.1% jump in the S&P500 today.

I remain bullish here but readers will want to keep their position size small.

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

- Suggested (small) Positions -

Long SEP $60 call (ORLY1117I60) entry $1.90

08/15 trade opened
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 15 at $60.37
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on August 6, 2011


SPDR S&P500 ETF - SPY - close: 120.62 change: +2.50

Stop Loss: n/a
Target(s): 119.75, 122.50
Current Option Gain/Loss: +15.3% & +43.1%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/15 update: Target achieved. Stocks extended their gains to three days in a row. The S&P 500 index delivered a strong +2.1% rally and managed to close above round-number resistance at the 1200 mark. For the SPY this meant a close over $120. Our first target was hit at $119.75 pretty early this morning.

Unfortunately, the spreads seem to be getting wider. Combine that with a fast approaching August expiration and the bid on the August $118 call was at breakeven for us. Currently the bid for the Aug. $118 call is at $2.48.

If you're holding August calls you will want to consider a complete exit now. I am not suggesting new positions at this time.

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

08/15 1st target hit @ 119.75
bid on the Aug. $118 call @ $2.15 (+0.0%)
bid on the Sep. $120 call @ $3.32 (+30.1%)
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: 34.22 change: +0.99

Stop Loss: n/a
Target(s): $37.50, 40.00
Current Option Gain/Loss: +34.6%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
08/15 update: Monday proved to be a bullish day for oil prices and the USO added +2.9%. The close over $34.00 is another win for the bulls. I don't see any changes from my prior comments. 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

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


United Technologies Corp. - UTX - close: 73.54 change: +1.09

Stop Loss: n/a
Target(s): 76.40, 79.75
Current Option Gain/Loss: + 0.0% & +20.6%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/15 update: Our new trade on UTX is now open. Shares have continued to rally and extended their gains to three days in a row. If you don't feel like chasing it here you could wait for a dip into the $72-70 zone as an alternative entry point.

Earlier Comments:
We want to keep our position size small since I'm not listing a stop loss.

- Suggested Positions -

Long SEP $75 call (UTX1117I75) Entry $1.83

- or high-risk trade with August calls -

Long AUG $75 call (UTX1120H75) Entry $0.29

Entry on August 15 at $73.21
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on August 13, 2011


Whole Foods Market, Inc. - WFM - close: 60.27 change: +1.98

Stop Loss: n/a
Target(s): 63.50
Current Option Gain/Loss: + 16.7%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/15 update: WFM is off to a strong start. Our trade was opened this morning. WFM gapped open higher at $58.68 and then rallied to a +3.3% gain to close over potential round-number resistance at $60.00. If you don't feel like chasing WFM here (up $6 in three days) then wait for a dip near $58 or the 200-dma.

Earlier Comments:
We want to keep our position size small since we're not listing a stop loss.

- Suggested Positions -

Long SEP $60 call (WFM1117I60) Entry $2.45

Entry on August 15 at $58.68
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on August 13, 2011


PUT Play Updates

CBOE Volatility Index - VIX - close: 31.87 change: - 4.49

Stop Loss: n/a
Target(s): 26.00, 22.50
Current Option Gain/Loss: -100.0% & -43.7%
Second Position Gain/Loss: -100.0% & - 10.0%
Third Position Gain/Loss: + 0.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/15 update: Another widespread rally for the U.S. markets sent the volatility index plunging lower. The VIX lost -12.3% for its third daily loss in a row. Unfortunately our August puts are running out of time. The Aug. $25 put still has a bid of $0.00.

I am not suggesting new positions here.

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


CLOSED BULLISH PLAYS

Core Labs - CLB - close: 110.99 change: +4.07

Stop Loss: n/a
Target(s): 104.90, 109.75
Current Option Gain/Loss: +220.0% & +242.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15 update: Energy stocks were big winners on Monday. Oil rallied almost +3%. The oil and oil service sector indices were both up more than +3.2%. CLB was an outperformer with a +3.8% gain and a rally past resistance at its 50-dma, 30-dma, and the $110 level.

Our target was hit at $109.75 pretty early this morning.

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

- Suggested (SMALL) Positions -

AUG $105 call (CLB1120H105) Entry $1.25*, exit $4.00* (+220%)

- or -

SEP $105 call (CLB1117I105) Entry $2.00, exit $6.85 (+242.5%)
08/15 2nd target hit @ 109.75.
08/15 *the $4.00 exit price is an estimate. The option did not trade today
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