Editor's Note:

The U.S. market extended its gains to four days in a row. We had two bullish plays (DLTR and IR) hit our profit targets.

-James

Current Portfolio:


CALL Play Updates

Dollar Tree, Inc. - DLTR - close: 75.27 change: +0.51

Stop Loss: 71.45
Target(s): 76.00, 79.00
Current Option Gain/Loss: Sep$75: +30.0% & Oct$75: +36.1%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/15 update: Target achieved. The action in DLTR was a bit disappointing actually. The stock garnered some bullish analyst comments. Yet DLTR only closed up +0.6% versus +1.3% in the NASDAQ. The intraday high was $76.19 and our first target to take profits was hit at $76.00. The plan was to exit our September $75 calls this morning. The bid was $0.65 (+30.0%). Our October $75 calls had a bid of $3.20 (+36.1%) when DLTR hit our target at $76.00.

I am concerned that DLTR is poised to contract and will dip back toward the $74-72 zone. I am not suggesting new positions at this time. We will raise our stop loss to $71.45.

No new positions today.

- Suggested Positions -

SEP $75 call (DLTR1117I75) Entry $0.50, exit $0.65 (+30.0%)

- or -

Long OCT $75 call (DLTR1122J75) Entry $2.35

09/15 new stop loss @ 71.45
09/15 1st Target hit at $76.00. Oct $75 call bid @ 3.20 (+36.1%)
09/15 planned exit for Sep. $75 call. bid $0.65 (+30%)
09/14 exit the September $75 calls ASAP (tomorrow morning)
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


Ingersoll-Rand Plc. - IR - close: 34.89 change: +1.24

Stop Loss: 31.25
Target(s): 34.75, 37.25
Current Option Gain/Loss: Sep$33: -37.0% & Oct$35: + 5.4%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/15 update: Target achieved. IR managed to rally to a multi-week high and hit $34.92 this afternoon. Our first target was hit at $34.75. The bid on our October $35 calls were trading at $1.90 (+ 2.7%). We had already planned to exit our September $33 calls at the open this morning. They opened at $0.85 (-37.0%).

IR has rallied to resistance near $35.00 and its 50-dma. I am not suggesting new positions at this time. We will adjust our secondary exit target from $36.75 to $37.25.

- Suggested Positions -

SEP $33 call (IR1117I33) Entry $1.35*, exit $0.85 (-37.0%)

- or -

Long OCT $35 call (IR1122J35) Entry $1.85

09/15 1st target hit @ 34.75. Oct. $35 call @ 1.90 (+2.7%)
09/15 planned exit on Sep$33 call. bid $0.85 (-37%)
09/14 exit Sep. $33 calls tomorrow morning at the open
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


Mead Johnson Nutrition - MJN - close: 75.27 change: +0.02

Stop Loss: 69.90
Target(s): 77.00, 79.50
Current Option Gain/Loss: Oct$70: +17.3% & Oct$75: - 3.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/15 update: After yesterday's bullish breakout the action in MJN today was downright disappointing. Shares bounced around the $74-76 zone and closed virtually unchanged on the session. I do not see any changes from my prior comments. Broken resistance in the $72-73 area should be new support.

I would not open positions at current levels. Look for another bounce from the $73-72 area.

Earlier Comments:
NOTE: The spreads on the Oct. $75 calls are a lot wider than the spreads on the $70s. Buying the $75s would be a riskier bet.

- Suggested Positions -

Long OCT $70 call (MJN1122J70) Entry $5.20*

- or -

Long OCT $75 call (MJN1122J75) Entry $3.15

09/14 new stop loss @ 69.90
*09/14 entry price is an estimate

Entry on September 14 at $73.22
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on September 13, 2011


PriceSmart Inc. - PSMT - close: 72.74 change: +0.10

Stop Loss: 67.25
Target(s): 74.00
Current Option Gain/Loss: +55.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/15 update: Sadly the action in PSMT was also disappointing. After yesterday's bullish breakout past the $70.00 level the stock closed virtually unchanged today. Traders did buy the dip this morning at $71.24. Please note that the 10-dma has risen to $67.38 and we will raise our stop loss to $67.25. If we're lucky, PSMT will see a morning rally to $74.00 and we'll exit this trade.

NOTE: Cautious trades will want to consider exiting now since the stock market might see another Friday sell-off.

- Suggested Positions -

Long OCT $70 call (PSMT1122J70) Entry $3.40

09/15 new stop loss @ 67.25
09/14 new stop loss @ 66.60

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: 63.27 change: +1.02

Stop Loss: 59.90
Target(s): 69.75, 72.50
Current Option Gain/Loss: Oct$65: -18.5% & Oct$70: -17.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/15 update: Just looking at the chart it seems like RRC didn't move much today but shares added +1.6% by the closing bell. The rally struggled this morning near $64 and the simple 10-dma. If you're looking for a new entry point I'd probably wait for another dip or bounce near the 50-dma around $61.15ish.

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: 110.15 change: -2.26

Target(s): 124.00
Entry #1) Current Option Gain/Loss: -30.0%
Stop Loss: 104.75
Entry #2) Current Option Gain/Loss: -13.3%
Stop Loss: 101.70
Time Frame: 4 to 6 weeks
New Positions: see trigger

Comments:
09/15 update: Yesterday I suggested readers look for a bounce from the $110 level as a new entry point. SINA provided a dip to $110 today. Actually the intraday low was $108.55. Technically I see this pull back as a potential entry point but the relative weakness today, while the rest of the market was moving higher, is a warning signal.

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


PUT Play Updates

Credit Suisse Group - CS - close: 25.49 change: +1.75

Stop Loss: n/a
Target(s): 19.00, 16.00
Current Option Gain/Loss: -50.0%
Time Frame: 4 to 10 weeks
New Positions: see below

Comments:
09/15 update: Yesterday the big news was a conference call between German, French and Greek leaders, which was supposed to be a show of support to keep Greece in the EU. Today the big headline was news that a coordinated effort between the U.S. Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, and the Swiss National Bank all extended three-month loans to EU banks to provide liquidity throughout the rest of this year. This fueled more optimism that authorities were making some sort of progress on the EU debt crisis. Naturally, European banks rallied. Shares of CS surged +7.3% and closed over what should have been resistance at $25.00.

We knew this was an aggressive, speculative trade. Yet cautious traders may want to exit now anyway. If we see CS post more gains tomorrow then we will most likely drop it from the newsletter.

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


iShares Russell 2000 ETF - close: 71.41 change: +0.99

Stop Loss: n/a
Target(s): see below
Current Option Gain/Loss: -77.1%
Time Frame: 1 or 2 days
New Positions: see below

Comments:
09/15 update: Our new put play on the IWM is not off to the best start. This ETF opened at $71.07, dipped toward $70.00 early on, and then reversed higher. Our put opened at 35 cents, traded to a high of 40 cents, and then collapsed as stocks rallied.

The IWM ended the day up +1.4% but it is still stuck in the $71.30-72.00 zone of potential resistance. Currently the IWM is up +7.5% from its Monday morning low. What are the odds that stocks will see some profit taking as we head into another weekend?

You could wait for the failed rally pattern of you could buy puts at the open tomorrow. Of course if you do, don't buy Septembers. We bought the September $69 puts and need to sell them at the closing bell tomorrow. If the IWM is not trading under $69.00 then these puts will have no value and we'll have nothing to sell.

- Suggested Positions -

Long SEP $69 PUT (IWM1117U69) Entry $0.35, current bid at $0.08

Entry on September 15 at $71.07
Earnings Date --/--/--
Average Daily Volume = 80 million
Listed on September 14, 2011


Stanley Black & Decker - SWK - close: 57.02 change: +0.14

Stop Loss: 58.05
Target(s): 50.25, 46.00
Current Option Gain/Loss: Oct$50: -50.0%, & Oct$55: -43.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/15 update: There was very little follow through on yesterday's breakout above the $56.00 level. SWK spent most of the day churning sideways. There is no change from my prior comments.

I would wait for a new drop under $56.00 before considering 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: 32.05 change: - 2.63

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: -95.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
09/15 update: The VIX is down sharply from its Monday afternoon highs near 43.00. Yet the "fear gauge" is still trading above the 30.00 level. Today saw a -7.6% drop to a new two-week low. 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

SPDR S&P500 ETF - SPY - close: 121.43 change: +2.06

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

Comments:
09/15 update: The S&P 500 index is up four days in a row and up +6.4% from its Monday intraday low of $114.05. If you took my suggestion on Monday night to buy the bounce with a stop under $114.00 you're looking pretty good and I would take profits now.

Our official trade to buy the dip at $112.50 was never opened. I'm dropping the SPY as a candidate tonight.

Trade never Opened.

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