Editor's Note:

We are adjusting entry points on our recent additions to the newsletter.

Meanwhile COG was stopped out.

-James

Current Portfolio:


CALL Play Updates

Dollar Tree, Inc. - DLTR - close: 70.31 change: -0.89

Stop Loss: 68.95
Target(s): 76.00, 79.00
Current Option Gain/Loss: Sep$75: -80.0% & Oct$75: -42.5%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/10 update: DLTR has pulled back toward support near the $70.00 level. Shares held there most of the afternoon. Previously I suggested we use a dip in the $70-69 area as a new entry point to buy calls. This is it. More conservative traders may want to wait and buy a bounce instead. I am concerned that the major indices look poised for more declines so readers may want to wait on launching new call trades.

- Suggested Positions -

Long SEP $75 call (DLTR1117I75) Entry $0.50

- or -

Long OCT $75 call (DLTR1122J75) Entry $2.35

09/07 trade is open. DLTR gapped open at $72.97
09/06 trade not open. Adjusted entry point strategy, stop loss, and targets.

chart:

Entry on September 7 at $72.97
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on September 3, 2011


Energy XXI Ltd. - EXXI - close: 23.88 change: -1.44

Stop Loss: 23.49
Target(s): 27.90, 29.75
Current Option Gain/Loss: Oct$27: -45.9% & Dec$30: -40.5%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
09/10 update: Uh-oh! EXXI broke down to new two-week lows. Shares hit $23.50 on Friday. Our stop loss is at $23.49. The entire week (Tuesday-Friday) looks like a failed rally under the 30-dma now. While we're long-term bullish on EXXI the short-term outlook doesn't look so hot. EXXI might be poised for a drop toward the August lows near $22.00 or $21.00. I am not suggesting new positions at this time.

Earlier Comments:
Readers may want to keep their position size small because EXXI can be a volatile stock! Plus, I want to point out that technically EXXI is in a neutral trading pattern of higher lows and lower highs (pennant formation).

- Suggested Positions -

Long OCT $27 call (EXXI1122J27) Entry $1.85*

- or -

Long DEC $30 call (EXXI1117L30) Entry $1.85*

09/09 EXXI almost hit our stop loss at $23.49
09/07 trade open. EXXI opened at $25.67
*prices are estimates. options did not trade today
09/06 original trade stopped out. Try again tomorrow with new stop and targets

chart:

Entry on September 7 at $25.67
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on September 6, 2011


Ingersoll-Rand Plc. - IR - close: 32.27 change: -0.96

Stop Loss: 31.25
Target(s): 34.75, 36.75
Current Option Gain/Loss: Sep$33: -51.8% & Oct$35: -40.5%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/10 update: IR underperformed the major indices on Friday with a -2.88% drop. The stock is down -6.3% from its close on Wednesday. IR seemed to find some support near the $32 level on Friday afternoon. If the market opens higher on Monday then I would buy calls on IR right here.

Cautious traders might want to tighten their stops but keep in mind that IR bounced twice from $31.43 in the last two weeks.

- Suggested Positions -

Long SEP $33 call (IR1117I33) Entry $1.35*

- or -

Long OCT $35 call (IR1122J35) Entry $1.85

09/07 trade opened. IR gapped higher at $33.39
*price is an estimate. option did not trade today
09/06 play not open. try again. new stop loss $31.25

chart:

Entry on September 7 at $33.39
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 8.0 million
Listed on September 3, 2011


Range Resources Corp. - RRC - close: 62.80 change: -2.59

Stop Loss: 59.90
Target(s): 72.25, 74.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/10 update: The market's widespread declines on Friday short circuited our plan to buy a breakout in RRC. Yet I had suggested that nimble traders could look to buy a dip instead. RRC produced a -3.9% plunge toward short-term support near $62 and its rising 40-dma. I am suggesting we take advantage of this dip.

We'll buy calls on RRC now but only if both RRC and the S&P 500 index both open positive on Monday morning. We'll adjust our stop loss to $59.90 and adjust our first target to $69.75 and our second target to $72.50. Cautious traders may want to keep their stop closer to the $62 are instead. Plus, conservative traders may want to take profits near $66.50 instead.

*See play details for entry strategy*

- Suggested Positions -

buy the OCT $65 call (RRC1122J65) current ask $3.80

- or -

buy the OCT $70 call (RRC1122J70) current ask $2.00

chart:

Entry on September xx at $ xx.xx
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on September 8, 2011


Sina Corp. - SINA - close: 104.67 change: -4.07

Target(s): 124.00
Entry #1) Current Option Gain/Loss: Unopened
Stop Loss: 102.00
Entry #2) Current Option Gain/Loss: Unopened
Stop Loss: 99.75
Time Frame: 4 to 6 weeks
New Positions: see trigger

Comments:
09/10 update: Our new trade in SINA is not open yet. The stock opened lower at $107.50 and then dropped to $102.22 intraday.

We are adjusting our entry point strategy. Actually we're listing two different entry points. First, we will keep the breakout trigger to buy calls at $112.55. For this entry point we'll use a stop at $102.00. That's a wide stop so be sure to keep position size small.

Second, we are adding a new entry point to buy calls right now but we only want to open positions if both SINA and the S&P 500 index open positive on Monday morning. This is a much more aggressive entry point since SINA remains under its trendline of resistance. If this position is opened we'll use a stop loss at $99.75. Plus, we'll use the Oct. $120 call.

Earlier Comments:
We do want to keep our position size small because SINA can be a volatile stock and we have a wide stop loss. I am setting our target at $124.00. More aggressive traders could aim higher. The inverse H&S pattern would suggest a target in the $150 area.

FYI: The Point & Figure chart for SINA has just broken through resistance and is bullish with a $146 target.

Entry #1) Trigger @ 112.55 (SMALL positions!)

- Suggested Positions -

buy the OCT $125 call (SINA1122J125)

Entry #2) buy calls now if SINA and S&P500 index open positive on Monday. (SMALL positions!)

- Suggested Positions -

buy the OCT $120 call (SINA1122J120)

chart:

Entry #1) Entry on September xx at $ xx.xx
Entry #2) Entry on September xx at $ xx.xx
Earnings Date 11/15/11 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on September 8, 2011


U.S. Oil Fund - USO - close: 33.85 change: -0.61

Stop Loss: 31.90
Target(s): $34.75,
Current Option Gain/Loss: +22.4%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
09/10 update: The USO retreated from resistance at the $35.00 level but it failed to break down under the bullish trend of higher lows. I had cautioned readers to expect a dip toward $33.00 and shares hit $33.25 on Friday.

NOTE: We are adjusting our exit strategy. The new plan is to exit positions on the next bounce to $34.75.

Cautious traders might want to up their stop toward the $32.50 area, just under Tuesday's low of $32.60.

No new 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

09/10 New exit target at $34.75
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

chart:

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


PUT Play Updates

Moody's Corp. - MCO - close: 28.97 change: -1.11

Stop Loss: 30.85
Target(s): 26.50 , 25.25
Current Option Gain/Loss: Sep$30: -29.5% & Oct$27: -24.4%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/10 update: MCO underperformed the market's major indices on Friday with a -3.69% drop. Volume was light but the pattern of lower highs is intact. Thursday's high was $30.70. We are adjusting our stop loss down to $30.85. Readers can use Friday's drop as a new entry point to buy puts.

Earlier Comments:
FYI: There are plenty of investors who are bearish on MCO. The most recent data listed short interest at almost 15% of the 183 million-share float. That does raise the risk of a short squeeze. We want to keep our position size small.

The Point & Figure chart for MCO is bearish with a $19 target.

* Small Positions * - Suggested Positions -

Long SEP $30 PUT (MCO1117U30) Entry $2.00*

- or -

Long OCT $27 PUT (MCO1122V27) Entry $1.80*

09/10 new stop loss @ 30.85
09/06 *Entry price on these options are estimates. Options did not trade today.

chart:

Entry on September 06 at $28.06
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 4.5 million
Listed on September 3, 2011


CBOE Volatility Index - VIX - close: 38.52 change: + 4.20

Stop Loss: n/a
Target(s): 26.00, 22.50
Current Option Gain/Loss: -100.0%
Second Position Gain/Loss: -100.0%
Third Position Gain/Loss: -97.3%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
09/10 update: We have less than two weeks left before September VIX options expire on Wednesday, Sep. 21.

The market's plunge on Friday sent the VIX to a +12.2% gain but the rally failed to break the trendline of lower highs.

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.

NOTE: These VIX options expire on Wednesday, September 21st.

- 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.

chart:

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


CLOSED BULLISH PLAYS

Cabot Oil & Gas - COG - close: 70.19 change: -4.11

Stop Loss: 69.90
Target(s): 82.00, 84.75
Current Option Gain/Loss: Oct.$80: -57.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/10 update: Ouch! It's been a rough couple of days for COG. The big bounce from support near $70.00 on Tuesday (Sep. 6th) failed the next day at resistance near $78.50. COG has since fallen 8 1/2 points (-10.8%) in two and a half days. Friday afternoon saw COG breakdown under support near $70.00 and hit our stop loss at $69.90.

We're long-term bullish on COG but 10% moves in less than three days are tough to trade.

- Suggested Positions -

OCT $80 call (COG1122J80) Entry $4.50, exit $1.90 (-57.7%)

09/09 stopped out at $69.90
09/07 trade opened. COG gapped open higher at $76.72
09/06 original trade stopped out. Try again tomorrow with new stop and targets

chart:

Entry on September 7 at $76.72
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on September 6, 2011