Editor's Note:

Italian bond yields rose past the psychologically important 7% level today. It was at the 7% mark that Portugal, Ireland and Greece all asked for a bailout. Unfortunately Italy is too big for a bailout.

Is this a knee-jerk reaction by investors? Or is it a true bearish reversal? The answer is going to take some time to develop but right now the market looks very fragile.

Financials were hit very hard by this news from Europe and GS hit our stop loss today. We also saw ROST and SCHN get stopped out.

I've adjusted our entry point strategy on APC, FLS and UA.

-James

Current Portfolio:


CALL Play Updates

Anadarko Petroleum - APC - close: 77.81 change: -6.14

Stop Loss: 77.45
Target(s): 98.50
Current Option Gain/Loss: Unopened
Time Frame: 8 to 12 weeks
New Positions: Yes, see below

Comments:
11/09 update: The sell-off in APC today looks pretty bearish but I suspect it's overdone. We're going to take a more aggressive approach to bullish positions.

The high today was $80.68. I am suggesting we open small bullish positions at $81.05. If triggered we'll use a stop loss at $77.45, a little bit below today's low. This is a more aggressive approach since APC still has resistance near $85.00. I'm adjusting our December strike price to the $85 calls.

FYI: Our target is for the January position. We will likely exit the December calls at a lower price.

Earlier Comments:
Shares of APC are on the verge of a major breakout past resistance near $85.00. This would produce a new all-time, record high for the stock. We want to be ready when that happens.

Trigger @ $81.05

- Suggested Positions -

buy the DEC $85 call (APC1117L85)

- or -

buy the JAN $90 call (APC1221A90)

11/09 adjusting our trigger to buy calls down to $81.05 and stop loss to $77.45.

Entry on November xx at $ xx.xx
Earnings Date 01/31/12 (unconfirmed)
Average Daily Volume = 5.0 million
Listed on November 8, 2011


Cabot Oil & Gas - COG - close: 80.34 change: -2.63

Stop Loss: 79.65
Target(s): 89.75
Current Option Gain/Loss: Nov$85c: -59.3% & Dec$90c: -22.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/09 update: COG has pulled back to short-term support near $80.00 and its simple 10-dma. If the market continues to breakdown tomorrow then there is a good chance that COG will hit our stop loss at $79.65. On the other hand, if the market bounces tomorrow, then this dip to $80.00 is a new bullish entry point.

Earlier Comments:
Remember, this is an aggressive, higher-risk trade so let's keep our position size small. I am listing both November and December calls but bear in mind that Novembers will expire in about two weeks. FYI: The Point & Figure chart for COG is bullish with a $116 target.

(small positions)

- Suggested Positions -

Long NOV $85 call (COG1119K85) Entry $2.58

- or -

Long DEC $90 call (COG1117L90) Entry $2.45

11/08 trade opened.
11/07 not open yet. try again

Entry on November 08 at $84.66
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on November 5, 2011


Costco Wholesale - COST - close: 83.41 change: -1.59

Stop Loss: 82.45
Target(s): 97.50
Current Option Gain/Loss: Nov$85 call: -59.2% & Jan $90 call: - 4.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
11/09 update: COST actually held up reasonably well today. The S&P 500 is down -3.6% but COST is only off -1.8%. Shares did not violate technical support at the rising 50-dma. If the market can bounce tomorrow then this dip could be used as an entry point.

Please note that we are raising our stop loss to $82.45, just a little bit under the 50-dma.

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

11/09 new stop loss @ 82.45
11/01 COST bounced at short-term support near $82 but readers may want to exit positions early right now
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 27 at $85.00
Earnings Date 12/07/11 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on October 22, 2011


DaVita Inc. - DVA - close: 72.68 change: -1.78

Stop Loss: 72.25
Target(s): 79.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/09 update: Our new trade on DVA is not open yet. Shares gapped open lower and settled on short-term technical support at the rising 10-dma. Aggressive traders may want to consider buying calls on a bounce from this level with a tight stop loss. Currently our plan calls for a trigger at $75.25 to open bullish positions.

In the news today DVA announced that one of its European divisions has purchased ExtraCorp AG, a German company that owns two dialysis centers and manages two more in Germany (source: DVA press release).

Earlier Comments:
I am suggesting a trigger to buy calls at $75.25. If triggered we'll aim for the $79.50 mark. More aggressive traders could aim for the May-June lows near $82.50 instead. FYI: The Point & Figure chart for DVA is bullish with a $97 target.

Trigger @ $75.25

- Suggested Positions -

buy the DEC $75 call (DVA1117L75)

Entry on November xx at $ xx.xx
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on November 8, 2011


Flowserve Corp. - FLS - close: 94.89 change: -5.09

Stop Loss: 93.95
Target(s): 109.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/09 update: Ouch! The market-wide sell-off today shaved -5% off FLS. The stock gapped open lower at $96.66 and settled near the $95 level. The stock is currently trading very close to its six-week trendline of higher lows (see chart).

We are going to take a more aggressive approach to bullish positions. More conservative traders will want to wait for the breakout past $100.00. Tonight I am suggesting a trigger to open small bullish positions at $97.30 since the high today was $97.16. We will adjust our stop loss to $93.95 since the low today was $94.25.

Earlier Comments:
I do consider this a slightly more aggressive trade because FLS can be so volatile. We want to keep our position size small to limit our risk.

Trigger @ $97.30 (small positions)

- Suggested Positions -

buy the DEC $105 call (FLS1117L105)

- or -

buy the JAN $105 call (FLS1221A105)

11/09 New strategy: trigger to buy calls at $97.30, stop loss $93.95. Small positions only

chart:

Entry on November xx at $ xx.xx
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 712 thousand
Listed on November 8, 2011


SPDR Gold Shares - GLD - close: 172.07 change: -1.46

Stop Loss: 164.95
Target(s): 182.50
Current Option Gain/Loss: +16.6%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
11/09 update: Hmm... our gains in the GLD are started to fade. You might normally think that with the European markets in distress that gold would rally as a safe haven trade. Yet the GLD lost -0.8%. It's possible that investors were selling gold to raise cash for margin calls elsewhere.

I remain bullish on gold and the GLD. Readers may want to buy calls on a dip or a bounce near the $170 level.

Cautious traders might also want to consider an exit target near $179.00 instead. Our target is $182.50.

- Suggested Positions - (Small Positions)

Long 2012 Jan $175 call (GLD1221A175) Entry $6.00

11/07 new stop loss @ 164.95

Entry on November 2 at $168.59
Earnings Date --/--/--
Average Daily Volume = 15.3 million
Listed on November 1, 2011


McDonald's Corp. - MCD - close: 92.65 change: -1.95

Stop Loss: 91.60
Target(s): 99.75
Current Option Gain/Loss: Nov95c: -55.7% & Dec95c: -32.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/09 update: Shares of MCD lost -2.0% versus -3.1% in the Dow Industrials and -3.6% in the S&P 500. The stock is nearing what should be support in the $92.00 area. I would wait for a bounce before considering new bullish positions. If we happened to get stopped out at $91.60 I would keep MCD on your watch list for anther entry point near $90.00 and its 50-dma.

Earlier Comments:
I am suggesting small positions to limit our risk. We will list both November calls and Decembers, but keep in mind that Novembers will expire in about two weeks. FYI: The Point & Figure chart for MCD is bullish with a $112 target.

(small positions)- Suggested Positions -

Long NOV $95 call (MCD1119K95) Entry $0.70

- or -

Long DEC $95 call (MCD1117L95) Entry $1.55

11/07 MCD hit our trigger at $94.05

Entry on November 7 at $94.05
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on November 5, 2011


Tech Data Corp - TECD - close: 47.93 change: -2.23

Stop Loss: 47.49
Target(s): 53.75
Current Option Gain/Loss: -54.3%
Time Frame: up to November earnings
New Positions: see below

Comments:
11/09 update: Surprisingly our trade in TECD is still open. Shares gapped open lower and eventually traded beneath its simple 200-dma. There were two dips to the $47.50 level before TECD finally pared its losses a little bit. Our stop loss is at $47.49.

If the market opens positive tomorrow, I would buy calls on TECD here. If the market opens weak then TECD will most likely hit our stop loss.

Earlier Comments:
Our target is $53.75. Don't be surprised if the $52.00 level acts as short-term resistance. FYI: The Point & Figure chart for TECD is bullish with a $67 target.

- Suggested Positions -

Long DEC $50 call (TECD1117L50) Entry $2.85

11/03 TECD gapped open at $50.03

Entry on November 3 at $50.03
Earnings Date 11/21/11 (confirmed)
Average Daily Volume = 650 thousand
Listed on November 2, 2011


Under Armour, Inc. - UA - close: 80.89 change: -2.88

Stop Loss: 79.90
Target(s): 92.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/09 update: The market-wide sell-off has pushed UA toward support near $80.00. The fact that it held support is positive. We are going to adjust our strategy here. The high today was $82.92. I am suggesting we buy calls at $83.50 with a stop loss at $79.90. We still want to keep our position size small to limit our risk. We will adjust our strike price to the Dec $85 call.

Earlier Comments:
We do want to keep our position size small to limit risk since UA can be a volatile stock.

Trigger @ 83.50 (small positions)

- Suggested Positions -

buy the DEC $85 call (UA1117L85)

11/09 new strategy: use a trigger at $83.50 to buy calls, stop loss @ 79.90
11/08 adjusted entry trigger from $86.25 to 85.25 and moved stop loss from $81.90 to $80.90.

Entry on November xx at $ xx.xx
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on November 5, 2011


Visa, Inc. - V - close: 93.13 change: -1.41

Stop Loss: 89.75
Target(s): 99.75
Current Option Gain/Loss: Nov$95c: - 1.8% & Dec$95c: + 6.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/09 update: Visa held up reasonably well spending most of the day in a $1.50 range. If shares see another dip toward the $91-90 zone I would use it as a new bullish entry point, or you could wait for a new breakout past $95.00 instead.

- Suggested Positions -

Long Nov. $95 call (V1119K95) Entry $1.10

- or -

Long Dec. $95 call (V1117L95) Entry $2.75

11/08 new stop loss @ 89.75
11/01 new stop loss @ 88.75
11/01 Visa gapped lower at $91.16
10/31 adjusted trigger to $92.25

Entry on November 1 at $91.16
Earnings Date 10/26/11
Average Daily Volume = 5.0 million
Listed on October 29, 2011


VMware, Inc. - VMW - close: 96.91 change: -3.86

Stop Loss: 97.40
Target(s): 107.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/09 update: Uh-oh! The sell-off in VMW today doesn't bode well. Many of the technical oscillators are starting to look bearish. If shares continue to sink VMW could see a drop toward $91-90 and its 200-dma. I am leaving our strategy unchanged. We will wait for a breakout to new relative highs and keep our trigger to buy calls at $101.00.

Trigger @ $101.00

- Suggested Positions -

buy the DEC $105 call (VMW1117L105)

11/08 adjust stop loss to $97.40.
11/07 Adjust strategy. Instead of buy the dip at $97.00 we want to buy calls on a rally at $101.00. Stop loss at $96.75. Target 107.75.

Entry on November xx at $ xx.xx
Earnings Date 01/24/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on November 3, 2011


PUT Play Updates

Shutterfly, Inc. - SFLY - close: 37.06 change: -2.84

Stop Loss: 38.55
Target(s): 35.25
Current Option Gain/Loss: +215.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/09 update: The weakness in SFLY continues. Shares lost -7.1% on strong volume. The low today was $36.64. More conservative trades may want to take profits now. The bid on the Nov. $40 put is up to $3.00 (+215.7%). Our exit target remains $35.25.

Please note that we are adjusting our stop loss down to $38.55.

Earlier Comments:
FYI: The spread on our put is a bit wide, which makes an impact on our gain/loss for this trade.

- Suggested Positions -

Long NOV $40 PUT (SFLY1119W40) Entry $0.95

11/09 new stop loss @ 38.55, readers may want to go ahead and take profits now
11/08 new stop loss @ 43.15
11/01 new stop loss @ 44.15

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

Goldman Sachs - GS - close: 99.67 change: -8.91

Stop Loss: 99.75
Target(s): 113.75
Current Option Gain/Loss: -52.9%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
11/09 update: Today's action in GS is very frustrating. The stock has been showing strength and our call option was up +51% as of yesterday. Unfortunately the turmoil over Europe today (specifically Italy) sent financial stocks plunging. GS gapped open lower at $104.99 and then dropped to an intraday low of $98.83. Our stop loss was hit at $99.75. The breakdown under a virtual cloud of moving averages and the $100 level for GS is very bearish!

Earlier Comments:
We do want to keep our position small because GS can be a volatile stock.

- Suggested Positions - (small positions)

NOV $105 call (GS1119K105) Entry $3.40, exit $1.60 (-52.9%)

11/09 stopped out at $99.75
11/08 new stop loss @ 99.75
11/02 corrected our entry price for the correct November call
11/01 new stop loss @ 97.45
11/01 GS gapped open lower at $103.49, under our trigger. Play opened.

chart:

Entry on November 1 at $103.49
Earnings Date 01/19/12 (unconfirmed)
Average Daily Volume = 8.5 million
Listed on October 31, 2011


Ross Stores Inc. - ROST - close: 86.62 change: -3.70

Stop Loss: 87.75
Target(s): 94.75
Current Option Gain/Loss: Nov90c: -60.0% & Dec92.50c: -50.0%
Time Frame: up to earnings on Nov. 17th
New Positions: see below

Comments:
11/09 update: The action in ROST today is disappointing. It's merely profit taking with investors rushing to lock in gains thanks to a widespread market decline. Our stop loss was hit at $87.75 but I would keep ROST on your watch list. A dip toward the $84-82 zone or its 50-dma could be a good entry point to look for bullish positions.

- Suggested Positions -

NOV $90 call (ROST1119K90) Entry $2.50, exit 1.00 (-60.0%)

- or -

DEC $92.50 call (ROST1117L92.5) Entry $2.50, exit 1.25 (-50.0%)

11/09 stopped out @ 87.75 (NASDAQ is down -3.8% today)
11/08 trade opened.

chart:

Entry on November 08 at $90.10
Earnings Date 11/17/11 (confirmed)
Average Daily Volume = 1.0 million
Listed on November 7, 2011


Schnitzer Steel Industries - SCHN - close: 44.91 change: -3.93

Stop Loss: 44.49
Target(s): 51.90
Current Option Gain/Loss: -60.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/09 update: Material and industrial names were hit really hard today. SCHN underperformed with a -8.0% plunge. The stock broke down under its a few moving averages and hit our stop loss at $44.49.

- Suggested Positions -

DEC $50 call (SCHN1117L50) Entry $2.50, exit 1.00 (-60.0%)

11/09 stopped out at $44.49
11/05 adjusted exit target to $51.90
11/03 SCHN gapped open at $48.38

chart:

Entry on November 3 at $48.38
Earnings Date 01/05/12 (unconfirmed)
Average Daily Volume = 311 thousand
Listed on November 2, 2011