Editor's Note:

The widespread market strength and a bounce in oil prices lifted the USO to our exit target. Meanwhile PSMT, RRC, and the SINA trades were all opened today.

-James

Current Portfolio:


CALL Play Updates

Dollar Tree, Inc. - DLTR - close: 72.00 change: +0.21

Stop Loss: 68.95
Target(s): 76.00, 79.00
Current Option Gain/Loss: Sep$75: -90.0% & Oct$75: -29.7%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/13 update: DLTR underperformed the market on Tuesday with choppy sideways trading near the $72 level. Readers might want to inch their stop loss higher. No new positions today.

- 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: 33.22 change: +0.54

Stop Loss: 31.25
Target(s): 34.75, 36.75
Current Option Gain/Loss: Sep$33: -40.7% & Oct$35: -24.3%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/13 update: IR was an outperformer today with a +1.6% gain. Unfortunately the stock is still struggling with technical resistance at the descending 40-dma. I am not suggesting new positions tonight.

NOTE: We have three days left on our September calls. We need to exit soon.

- 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


PriceSmart Inc. - PSMT - close: 69.74 change: +1.93

Stop Loss: 64.65
Target(s): 74.00
Current Option Gain/Loss: + 8.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/13 update: Our new trade on PSMT is open. The stock opened at $68.08 and rallied to a new high near $70.00. The breakout over resistance at $68.00 is bullish. Our trigger to buy calls was hit at $68.25.

Earlier Comments:
It's possible the $70.00 level could be resistance but I'm setting our target at $74.00. The Point & Figure chart for PSMT is bullish with a $77 target.

- Suggested Positions -

Long OCT $70 call (PSMT1122J70) Entry $3.40

Entry on September 13 at $68.25
Earnings Date 11/10/11 (unconfirmed)
Average Daily Volume = 307 thousand
Listed on September 12, 2011


Range Resources Corp. - RRC - close: 63.37 change: +0.61

Stop Loss: 59.90
Target(s): 69.75, 72.50
Current Option Gain/Loss: Oct$65: - 2.8% & Oct$70: +10.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/13 update: Our RRC trade is now open. Shares opened at $63.12 and after a rocky morning finally ended the day up +0.9%. If you missed the entry point I would still consider new positions now. The next obstacle for bulls is resistance in the $66.50-67.00 zone. Conservative traders may want to take profits near $66.50 instead.

- Suggested Positions -

Long OCT $65 call (RRC1122J65) Entry $3.50

- or -

Long OCT $70 call (RRC1122J70) Entry $1.45

09/13 trade opened. RRC @ 63.12

Entry on September 13 at $63.12
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on September 8, 2011


Sina Corp. - SINA - close: 113.98 change: +7.25

Target(s): 124.00
Entry #1) Current Option Gain/Loss: + 8.7%
Stop Loss: 104.75
Entry #2) Current Option Gain/Loss: +25.0%
Stop Loss: 101.70
Time Frame: 4 to 6 weeks
New Positions: see trigger

Comments:
09/13 update: It was a big day for SINA. The stock opened higher and then soared past resistance near $110 and $112 to breakthrough multiple levels of resistance. A Bloomberg article today mentioned that SINA had "invited" some of its users to try an upgraded version of its "Weibo" service, similar to Twitter. Analysts see this as a move by SINA toward more social-network applications.

We had two different entry points. Both of them were triggered today. The plan was to keep our 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 recently broken through resistance and is bullish with a $146 target.

Entry #1) Triggered @ 112.55, stop: 104.75 (SMALL positions!)

Long OCT $125 call (SINA1122J125) Entry $ 5.15

Entry #2) Entry @ 107.29, stop: 101.70 (SMALL positions!)

Long OCT $120 call (SINA1122J120) Entry $ 6.00

09/13 trade opened. both entry points hit.

Entry #1) Entry on September 13 at $112.55
Entry #2) Entry on September 13 at $107.29
Earnings Date 11/15/11 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on September 8, 2011


SPDR S&P500 ETF - SPY - close: 117.74 change: +1.07

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

Comments:
09/13 update: There is no change from my prior comments. Aggressive traders could buy this bounce with a tight stop under yesterday'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


PUT Play Updates

Credit Suisse Group - CS - close: 23.28 change: +0.33

Stop Loss: n/a
Target(s): 19.00, 16.00
Current Option Gain/Loss: -20.0%
Time Frame: 4 to 10 weeks
New Positions: see below

Comments:
09/13 update: CS is still trying to stage an oversold bounce. The stock managed a +1.4% gain. Readers may want to wait for a failed rally near the $24.00 or $25.00 levels before launching new bearish positions.

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: 30.47 change: +0.97

Stop Loss: 30.85
Target(s): 26.50 , 25.25
Current Option Gain/Loss: Sep$30: -80.5% & Oct$27: -51.3%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/13 update: This could be it for our MCO trade. The stock is at a key turning point. Today's +3.2% gain and breakout over $30.00 is short-term bullish. Yet the stock stalled at the 30-dma, has not yet broken above its highs from last week, nor its multi-week trend of lower highs. That could all change tomorrow. A failure here would be a new entry point for puts. Any further gains and we'll probably see MCO hit our stop loss at $30.85.

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: 54.94 change: +0.92

Stop Loss: 58.05
Target(s): 50.25, 46.00
Current Option Gain/Loss: Oct$50: -15.7%, & Oct$55: -15.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/13 update: Today's +1.7% gain in SWK has erased yesterday's loss. Yet the stock remains under what should be new overhead resistance at $56.00. 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: 36.91 change: - 1.68

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: -99.1%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
09/13 update: The VIX retreated -4.3% as stocks slowly worked their way higher. There is no change from my prior comments.

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

U.S. Oil Fund - USO - close: 34.85 change: +0.43

Stop Loss: 32.49
Target(s): $34.75,
Current Option Gain/Loss: +39.0%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
09/13 update: Target achieved. USO rallied back toward resistance near $35.00. Our target was hit at $34.75.

- Suggested Positions -

NOV $34 call (USO1119K34) Entry $2.05, exit $2.85 (+39.0%)

09/13 exit target hit at $34.75
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

chart:

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