Editor's Note:

Stocks pared their gains in the last two hours and the S&P 500 closed in the red. We saw FFIV and SINA get stopped out. I am suggesting an early exit for IR. PSMT hit our profit target. Meanwhile both the PX and TIF trades are open. The VIX trade has been closed.

-James

Current Portfolio:


CALL Play Updates

Dollar Tree, Inc. - DLTR - close: 75.69 change: -0.60

Stop Loss: 72.25
Target(s): 76.00, 79.00
Current Option Gain/Loss: Oct$75: +36.1%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/20 update: DLTR managed to hit a new high this morning at $77.45 but retreated to a -0.7% loss. Tomorrow will likely be a volatile session as investors react to the Fed news. More conservative traders will want to consider exiting our DLTR positions early to lock in a gain. I am not suggesting new positions at current levels.

- Suggested Positions -

Long OCT $75 call (DLTR1122J75) Entry $2.35

09/19 new stop loss @ 72.25
09/17 new stop loss @ 71.75
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.

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


Mead Johnson Nutrition - MJN - close: 75.43 change: -0.37

Stop Loss: 71.75
Target(s): 77.00, 79.50
Current Option Gain/Loss: Oct$70: +15.3% & Oct$75: + 3.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/20 update: MJN is still consolidating sideways in the $75-76 zone. Tomorrow will probably be a volatile day, especially tomorrow afternoon, as investors react to the FOMC news. More conservative traders will want to consider an early exit or tighten their stops.

I am not suggesting new positions tonight but a new bounce from the $74.00 or $72.00 levels might change my mind.

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

09/19 new stop loss @ 71.75
09/17 new stop loss @ 71.45
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


Praxair Inc. - PX - close: 101.51 change: +1.42

Stop Loss: 97.75
Target(s): 104.80, 109.00
Current Option Gain/Loss: +38.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/20 update: Our trade on PX is now open. The stock gapped open at $100.32 and rallied toward its 100-dma, which might be technical resistance. Shares displayed relative strength with a +1.4% gain. Tomorrow might be a volatile day for the market as investors react to the Fed news. I'd keep an eye open for a new bounce from $100 or $98 as potential entry points.

Our first target is $104.80. Our second target is $109.00. The Point & Figure chart for PX is bullish with a $115 target.

- Suggested Positions -

Long OCT $105 call (PX1122J105) Entry $1.05

09/20 trade opened.
09/19 new stop loss @ 97.75

Entry on September 20 at $100.32
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on September 17, 2011


Range Resources Corp. - RRC - close: 64.89 change: -0.94

Stop Loss: 59.90
Target(s): 69.75, 72.50
Current Option Gain/Loss: Oct$65: - 8.5% & Oct$70: +31.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/20 update: RRC traded inside the $64-67 range today. I do not see any changes from my prior comments. I am not suggesting new positions at this time but readers may want to consider buying calls if we see RRC close over the $67.00 level. Our final target is $72.50.

- Suggested Positions -

Long OCT $65 call (RRC1122J65) Entry $3.50

- or -

Long OCT $70 call (RRC1122J70) Entry $1.45

09/19 1st target hit @ 69.75
bid on Oct. $65 call @ $6.30 (+80%)
bid on Oct. $70 call @ $4.45 (+206%)
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


Tiffany & Co - TIF - close: 75.04 change: -1.03

Stop Loss: 72.75
Target(s): 79.90, 83.50
Current Option Gain/Loss: - 23.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/20 update: The new trade on TIF is open. Unfortunately shares rallied to $77.84 intraday and reversed, essentially erasing yesterday's gains. If shares break down under the $75.00 level it could be a quick drop back toward the next level of support near $73.00. I am not suggesting new positions tonight since tomorrow (Wednesday) could be volatile due to the FOMC meeting. Nimble traders could look for a new bounce near $73 as a new entry point anyway.

The plan was to use small positions to limit our risk.

(Small Positions) - Suggested Positions -

Long OCT $80 call (TIF1122J80) Entry $2.22

Entry on September 20 at $76.54
Earnings Date 11/29/11 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on September 19, 2011


Whole Foods Market - WFM - close: 72.00 change: -0.10

Stop Loss: 65.25
Target(s): 74.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/20 update: WFM closed virtually unchanged for the day. Traders are probably waiting to see what Ben Bernanke has to say tomorrow afternoon. We currently have no trade and new entry point set up for WFM. I'm concerned that tomorrow could be a volatile session for stocks. Nimble traders might want to buy a dip or a bounce near $70.00. Personally, I'd rather see a dip or a bounce near $68.00 instead. Officially the newsletter has not entry point for WFM tonight. We will re-evaluate tomorrow and either list an entry point or drop WFM as a trade candidate.

No Trade Tonight - Just Wait and Watch

Entry on September xx at $ xx.xx
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on September 17, 2011


PUT Play Updates

Stanley Black & Decker - SWK - close: 53.95 change: -1.37

Stop Loss: 58.05
Target(s): 50.25, 46.00
Current Option Gain/Loss: Oct$50: -31.5%, & Oct$55: -30.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/20 update: SWK continues to underperform. The stock lost -2.4% and closed on its lows for the session.

- 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


CLOSED BULLISH PLAYS

F5 Networks - FFIV - close: 78.17 change: -4.72

Stop Loss: 79.95
Target(s): 89.50, 94.50
Current Option Gain/Loss: -32.9% & -36.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/20 update: Our FFIV trade did not last long. Both the stock and the S&P 500 index opened higher so the trade was opened this morning. FFIV opened at $83.20. Yet shares quickly reversed at $83.92 and then plunged to a -5.6% loss. There was no news to explain the relative weakness. This is a breakdown under the 10, 20, and 40-dma. Our stop loss was hit at $79.95 before 11:00 a.m. this morning.

The plan was to use small positions to limit our risk.

- Suggested Positions - (Small Positions)

OCT $85 call (FFIV1122J85) Entry $4.65, exit $3.12 (-32.9%)

- or -

OCT $90 call (FFIV1122J90) Entry $2.50, exit $1.60 (-36.0%)

09/20 traded opened this morning, stopped out before 11:00 a.m.

chart:

Entry on September 20 at $83.20
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on September 19, 2011


Ingersoll-Rand Plc. - IR - close: 33.20 change: -0.44

Stop Loss: 32.90
Target(s): 34.75, 37.25
Current Option Gain/Loss: Oct$35: -40.5%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/20 update: I am giving up on IR and suggesting an early exit immediately. Shares were stuck under resistance at $35.00 most of the day and currently look poised to breakdown further.

- Suggested Positions -

OCT $35 call (IR1122J35) Entry $1.85, exit $1.10 (-40.5%)

09/20 exit early.
09/19 readers may want to exit immediately! new stop @ 32.90
09/17 new stop loss @ 32.40
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


PriceSmart Inc. - PSMT - close: 72.56 change: -1.60

Stop Loss: 69.90
Target(s): 74.75
Current Option Gain/Loss: +88.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/20 update: Target achieved. Actually PSMT exceeded our target of $74.75 when it gapped open higher at $74.90. The stock hit a new high at $75.16 before succumbing to profit taking.

- Suggested Positions -

OCT $70 call (PSMT1122J70) Entry $3.40, exit $6.40 (+88.2%)

09/20 target exceeded. gap open at $74.90. option: +88.2%
09/19 new stop loss @ 69.90
09/17 Readers may want to take profits now. Option bid at $5.50 (+61.7%).
09/17 new stop loss @ 67.75, adjust target to $74.75
09/15 new stop loss @ 67.25
09/14 new stop loss @ 66.60

chart:

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


Sina Corp. - SINA - close: 92.76 change: -16.59

Target(s): 124.00
Entry #1) Current Option Gain/Loss: -49.5%
Stop Loss: 104.75
Entry #2) Current Option Gain/Loss: -45.8%
Stop Loss: 101.70
Time Frame: 4 to 6 weeks
New Positions: see trigger

Comments:
09/20 update: Ouch! What happened to SINA? Chinese stocks were down hard today but SINA seemed to suffer the worst of it -15% plunge today. Multiple sources suggested that investors were reacting to talk of a new Chinese regulation regarding the Variable Interest Entity structure for companies that list overseas. This "news" actually came out over the weekend. So why it would affect shares of SINA today and not yesterday is a mystery.

Today's move is a very bearish breakdown with SINA breaking through the $100 level and its 200-dma. Our stop losses were hit pretty early on today.

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.

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

OCT $125 call (SINA1122J125) Entry $5.15, exit $2.60 (-49.5%)

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

OCT $120 call (SINA1122J120) Entry $6.00, exit $3.25 (-45.8%)

09/20 SINA plunged -15% hitting both of our stops.
09/13 trade opened. both entry points hit.

chart:

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



CLOSED BEARISH PLAYS

CBOE Volatility Index - VIX - close: 32.86 change: + 0.13

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:
09/20 update: The VIX has not traded this long above the 30.00 level since early 2009. Prolonged periods of high volatility are very uncommon. Our put options did not fare very well in this environment.

- Suggested Positions -

SEP $25.00 PUT (VIX1121U25) Entry $4.00, exit 0.00 (-100%)

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

SEP $25.00 PUT (VIX1121U25) Entry $2.50, exit $0.00 (-100%)

- 3rd Position, listed Aug. 8th, Open Aug. 9th @ open. -

SEP $30.00 PUT (VXI1121U30) Entry $5.70, exit $0.00 (-100%)

09/20 planned exit
09/19 prepare to close any positions tomorrow (Tuesday).
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