Editor's Note:

The U.S. markets slipped as investors waited for word from the meeting between Merkel and Sarkozy in Europe.

Our ANF trade was stopped out with our new stop loss from last night. I'm suggesting an early exit in the August SPY calls. Our TDC trade is not open yet.

-James

Current Portfolio:


CALL Play Updates

Deckers Outdoor - DECK - close: 89.50 change: -4.82

Stop Loss: n/a
Target(s): 93.50, 97.00
Current Option Gain/Loss: + 31.5% & +17.0%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/16 update: Ouch! DECK lost -5.1% on Tuesday .Shares failed at $93 this morning and plunged to their 50 and 100-dma just under the $90 level. I didn't see any specific news behind DECK's under performance. Cautious traders will definitely want to consider an early exit now from the August options.

I do want to point out that the three-day candlestick pattern has created a bearish reversal, which is another reason that readers may want to exit now. 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: 100.74 change: - 1.64

Stop Loss: n/a
Target(s): 99.50, 107.50
Current Option Gain/Loss: ---.-- & + 95.8%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/16 update: GMCR retreated again for the second day in a row. The stock gapped open lower and dipped toward $98.50. I will point out that traders bought the dip twice near $98.50. I do not see any changes from my prior comments.

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 -

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: 60.66 change: -0.08

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:
08/16 update: ORLY performed relatively well. Traders bought the dip twice in the $59.60-60.00 zone and shares were rebounding higher in the last couple of hours. I would still consider new bullish positions here if both ORLY and the S&P500 index open positive tomorrow. 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.

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: 119.59 change: -1.03

Stop Loss: n/a
Target(s): 119.75, 122.50
Current Option Gain/Loss: + 5.1% & +43.5%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/16 update: The market started off on a down note and the SPY spent the day chopping sideways. This ETF closed with a -0.8% loss but it did manage to bounce from short-term technical support at its 10-dma midday. You could certainly argue that the SPY is very short-term overbought given its big bounce from last week's lows. I am suggesting we exit our August calls immediately.

I am not suggesting new positions at this time.

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

- Suggested (SMALL) Positions -

AUG $118 call (SPY1120H118) Entry $2.15, exit $2.26 (+5.1%)

- or -

Long SEP $120 call (SPY1117I120) Entry $2.55

08/16 exit Aug. $118 call now. bid $2.26 (+5.1%)
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.

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


Teradata Corp. - TDC - close: 54.58 change: -1.42

Stop Loss: n/a
Target(s): 62.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/16 update: Our new trade on TDC is not open yet. The stock gapped open lower at $55.42 this morning. Shares eventually settled under the $55.00 level and under its 100-dma. If you were looking for a pull back then this could be used as a new entry point. I am suggesting that we open call positions tomorrow but only if TDC and the S&P500 both open positive.

Use your position size to manage risk.

- Suggested Positions -

buy the SEP $60 call (TDC1117I60) current ask $0.65

Entry on August xx at $ xx.xx
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on August 15, 2011


U.S. Oil Fund - USO - close: 33.83 change: -0.39

Stop Loss: n/a
Target(s): $37.50, 40.00
Current Option Gain/Loss: +23.4%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
08/16 update: Oil prices edged lower today but the USO did not see that much profit taking. This oil ETF is hovering near its recent highs. 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: 72.55 change: -0.99

Stop Loss: n/a
Target(s): 76.40, 79.75
Current Option Gain/Loss: Aug: - 62.0% & Sep -23.4%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/16 update: UTX experienced some profit taking after its bounce from last week's lows near $67.00. At this time I would wait for a dip into the $71.50-70.00 zone before considering new bullish positions. The newsletter will think about doubling down at those levels.

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: 59.97 change: -0.30

Stop Loss: n/a
Target(s): 63.50
Current Option Gain/Loss: + 7.7%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/16 update: Shares of WFM are holding up pretty well. The S&P500 lost almost -1% but WFM only fell half as much. The stock spent Tuesday churning sideways near $60.00. I don't see any changes from my prior comments. If you're looking for an entry point then consider waiting for a dip near the $58 level.

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: 32.85 change: + 0.98

Stop Loss: n/a
Target(s): 26.00, 22.50
Current Option Gain/Loss: -100.0% & -50.0%
Second Position Gain/Loss: -100.0% & - 20.0%
Third Position Gain/Loss: - 3.5%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/16 update: The market's pull back today fueled a +3% bounce in the VIX. This is the final nail in the coffin for our short-term August VIX options.

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

Abercrombie & Fitch Co - ANF - close: 71.02 change: -0.69

Stop Loss: 69.50
Target(s): 69.75, 73.50
Current Option Gain/Loss: -11.0% & + 13.7%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/16 update: Our ANF call play has been stopped out. We were planning to exit at the closing bell tonight to avoid holding over earnings tomorrow. Yesterday we added a stop loss at $69.50 to protect ourselves. This morning's market weakness was enough to push ANF to an intraday low of $67.87 so we were stopped out at $69.50.

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 -

AUG $70 call (ANF1120H70) Entry $2.08, exit $1.85 (-11.0%)

- or -

SEP $70 call (ANF1117I70) Entry $4.00, exit $4.55 (-13.7%)

08/16 stopped out @ 69.50
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.

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