Editor's Note:

Stocks plunged around the globe on renewed concerns that the world may be experiencing another recession. Lower earnings guidance from FedEx and disappointing economic data out of Europe and China all fueled fears over the economy. The DJIA fell to -500 intraday.

The DLTR and MJN trades were stopped out.

I am listing a new entry point on CHKP.

Our SWK put play exceeded our first target.

-James

Current Portfolio:


CALL Play Updates

Check Point Software - CHKP - close: 52.19 change: -4.17

Stop Loss: 50.80
Target(s): 55.75 , 57.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/22 update: The market's sharp sell-off today is providing a new opportunity in CHKP. Shares gapped open lower under its 50-dma and 100-dma and then plunged to a -7.3% decline. Actually it was off -9.2% at its worst today. Yet CHKP managed a bounce off its exponential 200-dma, which is also near its September lows.

I am suggesting we take advantage of this pull back and bounce from support. We will buy calls now but only if CHKP and the S&P 500 index both open positive tomorrow morning. Our new stop loss is at $50.80. Today's low was $51.14 and the mid September low was $51.00. Our new targets are $55.75 and $57.75. More aggressive traders can aim higher.

NOTE: We have changed our strike price.

*See Entry Point Details Above*

- Suggested Positions -

buy the OCT $55 call (CHKP1122J55) current ask $1.65

chart:

Entry on September xx at $ xx.xx
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on September 20, 2011


PUT Play Updates

Stanley Black & Decker - SWK - close: 47.83 change: -3.08

Stop Loss: 562.5
Target(s): 50.25, 46.00
Current Option Gain/Loss: Oct$50: +110.5%, & Oct$55: +71.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/22 update: Nope, you're not seeing things. SWK lost $3.00 today and $3.00 yesterday. Shares actually gapped open lower at $49.12 this morning and then plunged to a -6.0% decline. Our first exit target was $50.25 so the gap open at $49.12 triggered the exit. Our second and final target is $46.00. More aggressive traders may want to aim lower. Please note our new stop loss at $52.25.

- Suggested Positions -

Long OCT $50 put (SWK1122V50) Entry $1.90

- or -

Long OCT $55 put (SWK1122V55) Entry $3.90

09/22 new stop loss @ 52.25
09/22 1st target exceeded on gap down at $49.12
bid Oct. $50 put @ 3.12 (+64.2%)
bid Oct. $55 put @ 5.75 (+47.4%)
09/21 new stop loss @ 56.25

chart:

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

Dollar Tree, Inc. - DLTR - close: 74.32 change: -1.68

Stop Loss: 73.75
Target(s): 76.00, 79.00
Current Option Gain/Loss: Oct$75: - 8.5%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/22 update: The S&P 500 is down -6% in two days. DLTR is only down -1.8%. The stock did pull back to support near $74.00 as expected. Yet the intraday low was just enough to hit our stop loss at $73.75. I would definitely keep DLTR on your watch list for a new entry point. If the market continues to drop we could see DLTR testing support near $70 again.

- Suggested Positions -

OCT $75 call (DLTR1122J75) Entry $2.35, Exit $2.15 (-8.5%)

09/22 stopped out @ 73.75
09/21 new stop loss @ 73.75
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.

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


Mead Johnson Nutrition - MJN - close: 72.99 change: -1.24

Stop Loss: 71.75
Target(s): 77.00, 79.50
Current Option Gain/Loss: Oct$70: -40.3% & Oct$75: -65.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/22 update: MJN managed to pare its losses and ended the session down -1.6% versus -3.1% for the S&P 500. Unfortunately the intraday low this morning at $70.42 was more than enough to close our play. We were stopped out pretty early at $71.75. The intraday bounce near $70 and the close back above potential support/resistance in the $72.00-72.50 area could be used as a new bullish entry point. Nimble traders may want to reload their call positions.

NOTE: The option spreads exploded as volatility soared. This exacerbated our losses on both of the options below.

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*, Exit $3.10 (-40.3%)

- or -

Long OCT $75 call (MJN1122J75) Entry $3.15, Exit $1.10 (-65.0%)

09/21 stopped out @ 71.75
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

chart:

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