Editor's Note:

Monday morning saw another drop on growing concerns about Greece. Yet the market managed to shrug it off and reverse higher into the closing bell.

Our EXXI trade was stopped out this morning.

-James

Current Portfolio:


CALL Play Updates

Dollar Tree, Inc. - DLTR - close: 71.79 change: +1.48

Stop Loss: 68.95
Target(s): 76.00, 79.00
Current Option Gain/Loss: Sep$75: -80.0% & Oct$75: -21.2%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/12 update: DLTR saw a dip toward last week's low and then rallied sharply. The stock outperformed the wider market averages with a +2.1% gain by Monday's closing bell. This bounce could be used as a new entry point but consider inching your stop loss higher.

- 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.

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


Ingersoll-Rand Plc. - IR - close: 32.68 change: +0.41

Stop Loss: 31.25
Target(s): 34.75, 36.75
Current Option Gain/Loss: Sep$33: -51.8% & Oct$35: -32.4%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/12 update: IR briefly traded under support near $31.40 this afternoon before sharply reversing higher. It looks like a bounce from its 30-dma and 20-dma. The intraday low was $31.33. Our stop is at $31.25. The late day rebound can be used as a new bullish entry point to buy calls (I would buy Octobers, not Septembers).

- 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

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: -0.00

Stop Loss: 59.90
Target(s): 69.75, 72.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/12 update: RRC saw a dip toward last week's low and its 50-dma before bouncing back to the unchanged level this afternoon. The conditions to launch new positions this morning was not met. I am suggesting we try again.

Buy calls on RRC now but only if RRC and the S&P 500 index both open positive tomorrow morning. 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)

- or -

buy the OCT $70 call (RRC1122J70)

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: 106.73 change: +2.06

Target(s): 124.00
Entry #1) Current Option Gain/Loss: Unopened
Stop Loss: 104.75
Entry #2) Current Option Gain/Loss: Unopened
Stop Loss: 99.75
Time Frame: 4 to 6 weeks
New Positions: see trigger

Comments:
09/12 update: SINA displayed some relative strength and ended the day with a +1.9% gain. Shares did open lower so our aggressive entry point to buy calls this morning was not met. I am suggesting we try again.

I am listing two different entry points to choose from. Entry #1) is to wait for a breakout past the trend of lower highs and buy calls when SINA hits $112.55 with a stop loss at $104.75 (new). Entry #2) is to buy calls right now but only if SINA and the S&P 500 index both open positive tomorrow morning with a stop loss at $99.75.

Be sure to keep position size small.

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 tomorrow. (SMALL positions!)

- Suggested Positions -

buy the OCT $120 call (SINA1122J120)

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


SPDR S&P500 ETF - SPY - close: 116.67 change: +0.75

Stop Loss: 109.90
Target(s): 119.00, 122.00
Current Option Gain/Loss: Unopened
Time Frame: 4 weeks
New Positions: see below

Comments:
09/12 update: The U.S. market was pretty resilient today. European stocks were sinking sharply on growing expectation that Greece will default. The SPY managed to hold near support in the $114 area.

Aggressive traders could buy calls on today's afternoon bounce and use a stop loss under today's low (114.05). The newsletter will stick to our original plan and wait for a drip toward Augusts' closing lows. Currently our trigger to buy calls is at $112.50.

Earlier Comments:
This trade is a bet that investors are willing to buy the dip near the August lows (ignoring the bearish H&S pattern) instead of selling stocks toward the August 2010 lows. We are suggesting readers use a trigger to buy calls on the SPY at $112.50 (just above the 1120 lows on the S&P500 index). More conservative traders could wait for a dip closer to the 1100 level on the index, which is $111.00 on the SPY.

If we are triggered at $112.50 on the SPY we'll use a stop loss at $109.90. Our upside targets are $119.00 and $122.00.

Buy-The-Dip Trigger @ $112.50

- Suggested Positions -

buy the OCT $118 call (SPY1122J118)

Entry on September xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 293 million
Listed on September 10, 2011


U.S. Oil Fund - USO - close: 34.42 change: +0.57

Stop Loss: 32.49
Target(s): $34.75,
Current Option Gain/Loss: +35.1%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
09/12 update: USO is bouncing back toward resistance at $35.00. Our plan is to exit positions at $34.75 to lock in a gain. Please note our new stop loss at $32.49.

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

09/12 new stop loss @ 32.49
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

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


PUT Play Updates

Credit Suisse Group - CS - close: 22.95 change: +0.09

Stop Loss: n/a
Target(s): 19.00, 16.00
Current Option Gain/Loss: -10.0%
Time Frame: 4 to 10 weeks
New Positions: see below

Comments:
09/12 update: European stocks were weak today. Comments from one German leader suggested the only solution to the Greece debt problem might be bankruptcy or expulsion from the EU. There was a mad rush to refute and disagree with this suggestion. Yet the German DAX fell -2.2% and the French CAC40 index lost -4.0%.

Shares of CS opened at $22.48 (our entry) and dipped to $22.23 before bouncing. Volume on CS was very high at 3.8 million shares. Remember, this is a lottery ticket style of trade. European banks could see a lot of volatility on back and forth headlines regarding the fate of the PIIGS countries and their debt woes.

Earlier Comments:
The credit markets are telling investors that a Greek default is almost guaranteed but no one knows the actual date. It could be this month or it could be six months from now. Therefore, we need to label this CS put play as a speculative, aggressive bet. Greece and the EU do not want the country to default so CS could see a lot of volatility with sharp rebounds on positive headlines but these will be temporary.

With so much potential for volatility I am not listing a stop loss on this trade. Limit your risk by using small positions.

*Small Positions*

- Suggested Positions -

Long DEC $20 PUT (CS1117X20) Entry $2.00*

*09/12 option did not trade today but the $ASK did not move and remained at $2.00 (bid is $1.80)

Entry on September 12 at $22.48
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume = 2.3 million
Listed on September 10, 2011


Moody's Corp. - MCO - close: 29.50 change: +0.53

Stop Loss: 30.85
Target(s): 26.50 , 25.25
Current Option Gain/Loss: Sep$30: -52.0% & Oct$27: -35.0%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/12 update: Monday was a rocky session for MCO. The first two hours and the last two hours were volatile, sandwiching a quiet middle of the day. The sharp afternoon rebound left MCO with a +1.8% gain on the session. Shares look poised to retest overhead resistance near $30.00 and its trendline of lower highs. I am not suggesting new positions at this time. More conservative traders may want to consider an early exit now if you're holding the September 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.

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


Stanley Black & Decker - SWK - close: 54.02 change: -0.89

Stop Loss: 58.05
Target(s): 50.25, 46.00
Current Option Gain/Loss: Oct$50: + 2.6%, & Oct$55: +0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/12 update: SWK continues to underperform. Shares opened at $54.78 and dropped to a new 2011 low at $52.73 before trimming its losses. SWK ended the session down -1.6%. Readers might want to wait and see if shares bounce to or roll over under $56.00 before initiating new positions.

Earlier Comments:
Conservative traders could use a stop closer to $56.50-56.00. Our first target is $50.25. The $50-49 area might be support. Yet I'm setting a secondary target at $46.00. FYI: SWK recently produced a new quadruple bottom breakdown sell signal on its Point & Figure chart, which currently points to a $46 target.

- Suggested Positions -

Long OCT $50 put (SWK1122V50) Entry $1.90

- or -

Long OCT $55 put (SWK1122V55) Entry $3.90

Entry on September 12 at $54.78
Earnings Date 10/18/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on September 10, 2011


CBOE Volatility Index - VIX - close: 38.52 change: + 0.07

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: -98.2%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
09/12 update: Another terrible day in European stock markets helped spark a morning sell-off and the VIX opened higher above 42.50. The initial spike higher failed but the VIX managed to crawl higher and hit 43.18 before plunging as stocks rebounded off their lows.

We have less than two weeks left before September VIX options expire on Wednesday, Sep. 21. 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.

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


CLOSED BULLISH PLAYS

Energy XXI Ltd. - EXXI - close: 23.18 change: -0.70

Stop Loss: 23.49
Target(s): 27.90, 29.75
Current Option Gain/Loss: Oct$27: -59.4% & Dec$30: -45.9%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
09/12 update: The market's morning decline was enough to stop us out. EXXI gapped open lower at $23.42. Our stop loss was at $23.49. EXXI underperformed the market and instead of bouncing with the major indices the stock lost -2.9%.

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 -

OCT $27 call (EXXI1122J27) Entry $1.85*, Exit $0.75* (-59.4%)

- or -

DEC $30 call (EXXI1117L30) Entry $1.85*, Exit $1.00* (-45.9%)

09/12 stopped out on gap down at $23.42
*option values are an estimate. options did not trade today
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