Editor's Note:

Stocks surged out of the gate this morning helped by strong gains in European markets.

Our plan was to exit ORLY at the open. SRCL hit our target. Meanwhile FFIV and TSCO were opened. HANS surprised us and hit our new stop loss.

We have updated several stop losses tonight!

-James

Current Portfolio:


CALL Play Updates

CR Bard Inc. - BCR - close: 95.26 change: +1.10

Stop Loss: 91.75
Target(s): 94.75, 98.25
Current Option Gain/Loss: Sep.$85: +18.9% & Oct. $95: +23.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/31 update: BCR continues to rally. Shares added +1.1% and closed above potential round-number resistance at $95.00. BCR is up six out of the last seven days with a move from about $86.50 to $95.00 so it might be time for a pull back. We are raising our stop loss to $91.75. More conservative traders will want to consider a higher stop while aggressive traders may want to keep theirs under $90.00.

NOTE: Cautious traders may want to exit the September calls early (like tomorrow before the close) to avoid the risk of a jobs-report sell-off and the premium decline over the long weekend.

No new positions at this time.

- Suggested (small) Positions -

Long SEP $95 call (BCR1117I95) Entry $1.85*

- or -

Long OCT $95 call (BCR1122J95) Entry $3.40*

08/31 new stop loss @ 91.75
08/30 new stop loss @ 89.90
08/30 1st target hit at $94.75
Sep. $95 call bid at $2.25* (+21.6%)
Oct. $95 call bid at $4.00* (+17.6%)
*these are estimates. options did not trade today
08/29 play opened. BCR gap open entry at $92.11
* these are estimates. options did not trade today
08/27 Adjusted back to old strategy. Buy calls now if both BCR and S&P500 open positive on Monday.
08/27 move stop loss to $87.40 and adjusted strikes to $95
08/25 New strategy. Buy the dip at $86.50, new stop 84.85

Entry on August 29 at $92.11
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 1.25 million
Listed on August 23, 2011


Caterpillar Inc. - CAT - close: 91.00 change: +1.17

Stop Loss: 85.75
Target(s): --.--, 94.50
Current Option Gain/Loss: Sep.$90: +63.0% & Oct. $90: +37.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/31 update: CAT rallied to a new three-week high this morning and hit $93.82. Traders were buying the dip this afternoon near support at $90.00. The stock is up big from $81 just four trading days ago.

I am suggesting an early exit from our September calls. We will keep the October calls but raise our stop loss to $85.75.

I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small.

- Suggested Positions -

SEP $90 call (CAT1117I90) Entry $2.30, exit $3.75 (+63.0%)

- or -

Long OCT $90 call (CAT1122J90) Entry $4.35

08/31 new stop loss @ 85.75. Exit Sep. calls now!
08/31 exit early Sep. $90 call (bid) @ $3.75 (+63%)
08/30 new stop loss @ 84.75, consider taking profits early now.
08/29 trade opened. CAT gapped open at $87.11
08/27 buy-the-dip trigger not hit. We will switch back to buying calls now if both CAT and S&P500 open positive on Monday.
08/27 new stop loss at $79.49
08/24 play was not triggered. New strategy to buy the dip at $80.50 with a stop at $78.75.

Entry on August 29 at $87.11
Earnings Date 10/24/11 (unconfirmed)
Average Daily Volume = 13.9 million
Listed on August 23, 2011


Cabot Oil & Gas - COG - close: 75.86 change: -0.81

Stop Loss: 71.45
Target(s): --.--, 78.85
Current Option Gain/Loss: Sep.$75: +28.5% & Oct.$75: +27.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/31 update: Warning! COG rallied to $78.47 this morning and reversed. This could be a potential bearish double top but we can't know until it's in our rear-view mirror. Our second and final target is $78.85. Conservative traders may want to exit immediately given the intraday reversal, especially if you're holding September calls.

We will raise our stop loss to $71.45. You may want to raise yours even higher!

No new positions at this time.

- Suggested Positions -

Long SEP $75 call (COG1117I75) Entry $2.80

- or -

Long OCT $75 call (COG1122J75) Entry $4.80

08/31 new stop loss @ 71.45. Consider an early exit now!
08/30 new stop loss @ 69.75, adjust final target to $78.85
08/30 1st target hit at $75.85.
Sep. $75 call bid @ 3.70 (+32.1%)
Oct. $75 call bid @ 6.20*(+29.1%)
*option did not trade today. this is an estimate. 08/29 COG gapped open higher at $72.79

Entry on August 29 at $72.79
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on August 27, 2011


Deckers Outdoor - DECK - close: 88.96 change: +0.02

Stop Loss: 84.40
Target(s): 93.50, 97.00
Current Option Gain/Loss: -25.5%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/31 update: The trading action in DECK today worries me. Shares rallied to $92.66 intraday only to reverse lower and close almost unchanged on the session. The move looks like a bearish reversal and failed rally pattern. Once again I am suggesting that conservative traders consider an early 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.

- Suggested (SMALL) Positions -

Long SEP $90 call (DECK1117I90) Entry $4.70

08/30 Readers may want to cut losses now (at -23.4%).
New stop loss @ $84.40
08/20 Remainder of our August $90 call position expires at $0.00 (-100%), We took profits on these on the 12th at +232%
08/18 DECK is down nearly 20 points in three days
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


Energy XXI Ltd. - EXXI - close: 26.81 change: +0.42

Stop Loss: 23.90
Target(s): 27.50, 29.75
Current Option Gain/Loss: + 73.0%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
08/31 update: EXXI displayed some relative strength with a +1.5% gain. Yet most of that came on the opening gap higher. EXXI actually spent the day moving sideways. We will move our stop loss up to $23.90. More conservative traders may want to use a stop closer to the $25.00-25.50 zone instead.

Cautious traders may want to take profits now (option +73%).

No new positions at this time.

- Suggested Positions -

Long DEC $25 call (EXXI1117L25) Entry $2.60

08/31 new stop loss @ 23.90
08/30 new stop loss @ 23.40
08/29 new stop loss @ 21.90
08/27 new stop loss @ 20.90

Entry on August 22 at $22.00
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on August 20, 2011


F5 Networks Inc - FFIV - close: 81.57 change: +2.24

Stop Loss: 76.25
Target(s): 84.50, 89.00
Current Option Gain/Loss: Sep.$85: - 0.0% & Oct.$85: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/31 update: Our aggressive trade on FFIV has been opened. The stock opened at $80.00 and rallied to $82.31 intraday. FFIV eventually settled with a +2.8% gain. The plan was to keep our position size very small to limit our risk. We're using a stop loss at $76.25. More conservative traders may want to use a stop closer to $77.50 instead.

NOTE: Any big dip is going to crush the September calls since they expire in just over two weeks. Readers may want to play the Octobers instead.

- Suggested Positions -

Long SEP $85 call (FFIV1117I85) Entry $2.16

- or -

Long OCT $85 call (FFIV1122J85) Entry $5.05

Entry on August 31 at $80.00
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 3.5 million
Listed on August 30, 2011


Lululemon Athletica - LULU - close: 54.73 change: -1.34

Stop Loss: 51.40
Target(s): 56.00, 59.50
Current Option Gain/Loss: + 6.2%
Time Frame: up to September 9th
New Positions: see below

Comments:
08/31 update: I could be wrong but I doubt the back-to-school shopping surge has the same impact for LULU as it does for other apparel retailers. That's not stopping investors from worry over how the August same-store sales results (out tomorrow) will come in. The trading action in LULU today looks bearish with a failed rally near $58 and a close back under its 50-dma and the $55.00 level.

I am turning cautious here and raising our stop loss to $51.40. Bear in mind that LULU has been very volatile over the last four weeks. Any significant market swoon will probably has LULU hitting our new stop loss.

No new positions at this time.

NOTE: This is a short-term trade. We do not want to hold over the Sept. 9th earnings report.

- Suggested Positions -

Long SEP $55 call (LULU1117I55) Entry $3.20

08/31 new stop loss @ 51.40
08/30 new stop loss at $49.75
08/30 1st target hit @ $56.00, option bid @ $4.05 (+26.5%)

Entry on August 29 at $54.05
Earnings Date 09/09/11 (confirmed)
Average Daily Volume = 4.2 million
Listed on August 27, 2011


Tractor Supply Co. - TSCO - close: 61.37 change: +0.55

Stop Loss: 58.75
Target(s): 64.75
Current Option Gain/Loss: Sep.$65: -35.7% & Oct.$65: + 2.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/31 update: Our TSCO trade is open. Shares opened at $61.15 this morning and then spent the session consolidating in a relatively narrow range. Nimble traders may want to wait and try to enter on another dip near $60.00. Cautious traders will want to wait and see how the market reacts to the jobs data on Friday before considering new positions.

Earlier Comments:
The September options expire in less than three weeks. If TSCO does not see any follow through higher these will evaporate fast. The spread is a larger percentage of the overall trade with the Septembers.

- Suggested Positions -

Long SEP $65 call (TSCO1117I65) Entry $0.70

- or -

Long OCT $65 call (TSCO1122J65) Entry $2.00

Entry on August 31 at $61.15
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 858 thousand
Listed on August 29, 2011


U.S. Oil Fund - USO - close: 34.51 change: +0.07

Stop Loss: 31.90
Target(s): $37.50, 40.00
Current Option Gain/Loss: +37.0%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
08/31 update: It was a quiet day for oil prices. The USO managed to hit a new four-week high intraday. Shares traded in a relatively narrow range. This ETF could have additional resistance near $35.00. I am not suggesting new bullish positions at this time.

Earlier Comments:
Keep your position size small! This is a lottery-ticket style of play.

- Suggested Positions -

Long NOV $34 call (USO1119K34) Entry $2.05

08/27 new stop loss @ $31.90
08/27 removing 2nd trigger to add another position.
08/20 Adding a new buy-the-dip entry at $30.50, stop @ 29.00

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: 74.25 change: +0.49

Stop Loss: 71.75
Target(s): 76.40, 79.75
Current Option Gain/Loss: (Sep. - 18.0%)
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/31 update: UTX displayed some relative strength today. Shares hit a new four-week high at $75.37 this morning. The stock does look short-term overbought with a move from about $69 four days ago to $75 today. It's probably time for a dip. We have about two weeks left on September options. Cautious traders will want to seriously consider an early exit now! I would expect a dip back toward the $73-72 zone. I am raising our stop loss to $71.75.

I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small.

- Suggested Positions -

Long SEP $75 call (UTX1117I75) Entry $1.83

08/31 new stop @ 71.75, consider an early exit now (-18.0%)
08/30 consider cutting your losses now (-30%)
08/27 Adding a stop loss at $68.75
08/27 We have removed the buy-the-dip entry at $65.00
08/20 New entry point to buy calls on dip at $65.00
08/20 Our aggressive, higher-risk trade with August options has expired. Entry price on Aug. $75 call (UTX1120H75) was $0.29. exit 0.00 (-100%)

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


PUT Play Updates

CBOE Volatility Index - VIX - close: 32.28 change: - 3.31

Stop Loss: n/a
Target(s): 26.00, 22.50
Current Option Gain/Loss: -93.7%
Second Position Gain/Loss: - 90.0%
Third Position Gain/Loss: -65.7%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/31 update: The VIX fell to its lowest point in almost four weeks with the morning low at 30.16. The short-term trend is down but we are not suggesting new positions at this time.

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.

- Suggested Positions -

Long SEP $25.00 PUT (VIX1121U25) Entry $4.00

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

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

08/17 August VIX options expire
1st position Aug. $25 put @ $0.00 (-100%)
2nd position Aug. $25 put @ $0.00 (-100%)
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

Hansen Natural Corp. - HANS - close: 85.32 change: -4.26

Stop Loss: 83.40
Target(s): 89.75, 94.50
Current Option Gain/Loss: Sep.90: -53.6% & Oct.90: -37.5%
Time Frame: 2 to 6 weeks
New Positions: see below

Comments:
08/31 update: Ouch! HANS was a big underperformer on Wednesday. The stock collapsed from resistance near $90.00 to hit an intraday low of $81.72 (-8.7% intraday). We had just moved our stop from $80.90 to $83.40 last night thus our trade has been stopped out.

There was no explanation for the sell-off today. No news. No downgrades. Nothing. You will notice that volume was off the charts at 3.7 million compared to normal volume of 1.4 million. Maybe there was a fund manager that needed to raise cash before the month was over.

- Suggested Positions -

SEP $90 call (HANS1117I90) Entry $2.05, Exit $0.95 (-53.6%)

- or -

OCT $90 call (HANS1122J90) Entry $4.40, Exit $2.75 (-37.5%)

08/31 stopped out @ 83.40
08/30 1st target hit at $89.75
Sep $90 call bid @ $3.10 (+51.2%)
Oct $90 call bid @ $5.40 (+22.7%)
08/30 new stop loss @ 83.40
08/29 HANS gapped open at $86.00

chart:

Entry on August 29 at $86.00
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on August 27, 2011


O'Reilly Automotive - ORLY - close: 64.88 change: -0.27

Stop Loss: 61.75
Target(s): 63.75, 66.00
Current Option Gain/Loss: +163.1%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/31 update: ORLY hit our final target at $66.00 today. Shares opened higher at $65.44 and spiked to $66.02 before reversing lower. Except we can't claim an exit at $66.00. Our plan was to exit our call positions at the open this morning.

At the open this morning the bid on the September $60 call would have been about $5.00 (+163.1%). The option did not trade today and the current bid is $4.80.

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

- Suggested (small) Positions -

SEP $60 call (ORLY1117I60) entry $1.90, exit $5.00 (+163.1%)

08/31 planned exit at the open
08/30 prepare to exit tomorrow morning
08/24 new stop loss @ 61.75
08/24 1st target hit @ 63.75, option @ $4.00 (+110.5%)
08/23 new stop loss @ 59.40
08/20 new stop loss @ 57.80
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


Stericycle Inc. - SRCL - close: 87.71 change: +0.31

Stop Loss: 83.75
Target(s): --.--. 88.50
Current Option Gain/Loss: +140.0%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/31 update: Target achieved. SRCL opened at $88.00 and rallied to $88.85 before paring its gains. Our final target to exit was hit at $88.50. The stock looks short-term overbought. I would keep it on your watch list for a pull back before considering new positions.

NOTE: the option did not trade today. Our exit is an estimate.

- Suggested (small) Positions -

SEP $85 call (SRCL1117I85) Entry $1.75, exit $4.20* (+140%)

08/31 final target hit at $88.50
*option did not trade today. this is an estimate.
08/30 new stop loss @ 83.75
Consider an early exit now
08/29 consider exiting now since the option is up +105%
08/27 new stop loss @ 81.25
08/25 new stop loss @ 79.75
08/25 1st target hit @ 84.90, option @ $2.75* (+57.1%)
*this is an estimate. the option did not trade today.

chart:

Entry on August 23 at $81.29
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 858 thousand
Listed on August 22, 2011