Editor's Note:

The stock markets suffered a little scare today thanks to some troubling headlines out of Europe. Yet after four big weekly gains in a row the market was poised for profit taking. Investors could have used any headline as an excuse to sell.

Our new trades on DE and IYF are open. I've adjusted the trigger on our Visa trade. Meanwhile our FXI trade has been stopped out.

-James

Current Portfolio:


CALL Play Updates

Bed Bath & Beyond Inc. - BBBY - close: 61.84 change: +0.69

Stop Loss: 59.75
Target(s): 64.75
Current Option Gain/Loss: - 9.3%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
10/31 update: BBBY displayed relative strength today with a +1.1% gain thanks to takeover speculation. The bullish trend remains intact but I'm reluctant to launch new positions at current levels. Thankfully the options saw a nice rebound today.

*Small Positions*- Suggested Positions -

Long NOV $62.50 call (BBBY1119K62.5) Entry $1.50

10/27 new stop loss @ 59.75

Entry on October 14 at $61.00
Earnings Date 12/21/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on October 12, 2011


Costco Wholesale - COST - close: 83.25 change: -1.68

Stop Loss: 81.80
Target(s): 97.50
Current Option Gain/Loss: Nov$85 call: -51.9% & Jan $90 call: + 3.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/31 update: Hmm... what happened to COST today? In the last hour of trading the stock fell off a cliff. I couldn't find any specific news to account for the late day drop. The stock looks headed for the $82.50-82.00 zone. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week exit target is $97.50. Cautious traders will want to consider an exit near $90 or $94 instead. Keep positions small.

(small positions)- Suggested Positions -

Long NOV $85 call (COST1119K85) Entry $1.52

- or -

Long 2012 Jan $90 call (COST1221A90) Entry $1.01

10/27 trade opened on gap higher at $85.00
10/26 Adjusted entry point strategy. Buy calls tomorrow if COST and S&P 500 index open positive. New stop loss at $81.80.

Entry on October xx at $ xx.xx
Earnings Date 12/07/11 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on October 22, 2011


Deere & Co. - DE - close: 75.90 change: -2.77

Stop Loss: 73.75
Target(s): 82.00
Current Option Gain/Loss: Nov$77.50c: - 6.1% & Dec$80c: - 4.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/31 update: It looked like DE was going to hold support at the $76.00 level today. Traders bought the dip just above $76.00 early this morning and then again very late this afternoon. It wasn't until the very last few minutes of trading that DE actually hit $76.00 and traded lower. Our plan was to buy calls on a dip at $76.00. Readers may want to wait for a dip near $75.00 instead as their entry point.

Please note that upon further view I think our stop loss at $74.40 is too tight. We'll move it to $73.75.

- Suggested Positions -

Long NOV $77.50 calls (DE1119K77.5) Entry $1.80

- or -

Long DEC $80 calls (DE1117L80) Entry $2.15

10/31 adjusting stop loss to $73.75.
10/31 trade opened at $76.00

Entry on October 31 at $76.00
Earnings Date 11/23/11 (unconfirmed)
Average Daily Volume = 5.6 million
Listed on October 29, 2011


iShares U.S.Financials ETF - IYF - close: 50.16 change: -1.73

Stop Loss: 48.40
Target(s): 54.00
Current Option Gain/Loss: Nov$50c: -25.0% & Dec $53c: -35.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/31 update: Thankfully we didn't have to wait very long for the IYF to hit our entry point. Shares gapped open lower at $50.90 and fell toward the 100-dma before closing with a -3.3% decline. Our trigger to buy the dip was hit at $50.50. Investors were unnerved this morning over headlines out of Europe and renewed worries over Greece and Italy.

Please note that I am adjusting our stop loss from $48.75 to $48.40. Our multi-week target is $54.00. FYI: The Point & Figure chart for IYF is bullish with a $75 target.

- Suggested Positions -

Long NOV $50 call (IYF1119K50) Entry $2.00

- or -

Long DEC $53 call (IYF1117L53) Entry $1.35

10/31 adjusted stop loss to $48.40
10/31 Trade opened at $50.50

Entry on October 31 at $50.50
Earnings Date --/--/--
Average Daily Volume = 697 thousand
Listed on October 29, 2011


Roper Industries - ROP - close: 81.10 change: -1.79

Stop Loss: 79.45
Target(s): 84.90
Current Option Gain/Loss: -18.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/31 update: There are no surprises here. I warned readers to expect a pull back toward $80. Shares of ROP gapped open lower and ended the session down -2.1%. Wait for a dip or a bounce near $80.00 before considering new positions.

- Suggested Positions -

Long NOV $80 call (ROP1119K80) Entry $3.30

10/29 wait for a dip near $80 before considering new positions.
10/27 new stop loss @ 79.45
10/27 gap higher at $82.03 is our entry point. Plan was to buy calls at $80.25.

Entry on October 27 at $82.03
Earnings Date 01/31/12 (unconfirmed)
Average Daily Volume = 740 thousand
Listed on October 26, 2011


Tractor Supply Co - TSCO - close: 70.94 change: -0.25

Stop Loss: 69.90
Target(s): 79.00
Current Option Gain/Loss: Nov$75c: -65.7% & Jan$80c: -43.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/31 update: TSCO held up reasonably well. Traders bought the dip near support at $70.00 this morning. The bounce did roll over but shares only fell -0.3% on Monday. I would still consider buying dips or a bounce near $70.00 tomorrow.

(small positions)- Suggested Positions -

Long NOV $75 call (TSCO1119K75) Entry $1.75

- or -

Long Jan $80 call (TSCO1221A80) Entry $2.30

10/27 TSCO gapped open higher at $74.36 (up from $72.41)

Entry on October 27 at $74.36
Earnings Date 10/19/11
Average Daily Volume = 904 thousand
Listed on October 26, 2011


Visa, Inc. - V - close: 93.26 change: -1.84

Stop Loss: 89.49
Target(s): 99.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
10/31 update: Right on cue shares of Visa pulled back. I still think there is a little bit more profit taking to go. We are adjusting our buy-the-dip trigger from $93.00 to $92.25. We'll move the stop loss a tiny bit to $89.40. More conservative traders may want to wait for a pull back closer to the $90.50-90.00 zone as their entry point instead.

buy-the-dip Trigger @ $92.25

- Suggested Positions -

buy the Nov. $95 call (V1119K95)

- or -

buy the Dec. $95 call (V1117L95)

10/31 adjusted trigger to $92.25

Entry on October xx at $ xx.xx
Earnings Date 10/26/11
Average Daily Volume = 5.0 million
Listed on October 29, 2011


PUT Play Updates

Dollar Tree - DLTR - close: 79.96 change: +1.09

Stop Loss: 82.65
Target(s): 75.10
Current Option Gain/Loss: -11.5%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
10/31 update: The relative strength in DLTR today is surprising. The stock was strong right at the open but struggled to hold its gains over $80.00. Readers may want to wait for a new drop under $79.50 before considering new bearish positions. More conservative traders might want to tighten their stop loss.

Earlier Comments:
More conservative traders may want to use a trigger under $78.45 to buy puts. Our target is $75.10. More aggressive traders could aim for the 100-dma instead.

- Suggested Positions -

Long NOV $80 put (DLTR1119W80) Entry $2.60

Entry on October 28 at $79.46
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on October 27, 2011


Shutterfly, Inc. - SFLY - close: 41.67 change: -1.23

Stop Loss: 48.05
Target(s): 35.25
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/31 update: SFLY continues to look weak. The stock gapped open lower at $42.32 and ended the session down -2.8%. I am not suggesting new positions at this time.

FYI: The spread on our put is a bit wide, which makes an impact on our gain/loss for this trade. Today the bid has bounced back and we're at breakeven.

Earlier Comments:
The $40 level could offer potential support but we're aiming for $35.25 as our exit target.

- Suggested Positions -

Long NOV $40 PUT (SFLY1119W40) Entry $0.95

Entry on October 28 at $42.88
Earnings Date 10/26/11 (confirmed)
Average Daily Volume = 1.1 million
Listed on October 27, 2011


CLOSED BULLISH PLAYS

iShares China 25 index ETF - FXI - close: 36.06 change: -1.73

Stop Loss: 36.90
Target(s): 39.50
Current Option Gain/Loss: -37.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/31 update: Our FXI trade didn't last very long and the huge gap up entry on Thursday last week probably doomed our trade. Shares opened at $36.91 this morning and quickly hit our stop loss at $36.90 before falling to $35.96 this afternoon.

- Suggested Positions -

NOV $37 call (FXI1119K37) Entry $1.82, exit $1.14 (-37.3%)

10/31 stopped out at $36.90
10/27 new stop loss @ 36.90
10/27 FXI gaps higher at $37.72, our new entry
10/26 adjusted our entry point strategy. New stop loss @ 33.90

chart:

Entry on October 27 at $37.72
Earnings Date --/--/--
Average Daily Volume = 30 million
Listed on October 24, 2011