Editor's Note:

The U.S. market accelerated lower on Thursday. The S&P 500 has broken down from a triangle or pennant formation. The NASDAQ has broken support near the 2600 level.

We had several trades get stopped out today. I am updating our entry point strategy on SWK. We've also dropped a couple of unopened trades.

-James

Current Portfolio:


CALL Play Updates

Pioneer Nat. Res. - PXD - close: 91.07 change: -3.20

Stop Loss: 89.45
Target(s): 99.75
Current Option Gain/Loss: Dec$100c: -48.4% & Jan$100c: -38.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/17 update: Warning! I cautioned traders about yesterday's pull back from PXD's intraday high. Now today's decline (and underperformance, -3.3%) is follow through on yesterday's reversal. Wednesday's rally looks like a bull trap. PXD dipped to support near $90 this afternoon and if the market continues lower tomorrow we will likely see PXD hit our stop at $89.45.

I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small because PXD can be a volatile stock and we're using a wide stop loss.

(Small Positions Only) - Suggested Positions -

Long DEC $100 call (PXD1117L100) Entry $3.20

- or -

Long JAN $100 call (PXD1221A100) Entry $5.50

Entry on November 16 at $95.05
Earnings Date 02/06/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on November 15, 2011


Stanley Black & Decker Inc. - SWK - close: 64.52 change: -0.84

Stop Loss: 63.25
Target(s): 69.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes , see below

Comments:
11/17 update: SWK has dipped to short-term support near $64.00 and its exponential 200-dma. We are going to gamble on a bounce here and adjust our entry point strategy. The new plan is to buy calls on SWK tomorrow morning but only if SWK and the S&P 500 index both open positive. We'll adjust our stop loss to $63.25.

NOTE: I've adjusted our option strikes below.

*See Entry Details Above*

- Suggested Positions -

buy the DEC $65 call (SWK1117L65) current ask $2.70

- or -

buy the JAN $70 call (SWK1221A70) current ask $2.15

11/17 new entry strategy. Buy calls if both SWK and S&P500 open positive tomorrow morning. New stop loss @ 63.25.

Entry on November xx at $ xx.xx
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on November 15, 2011


PUT Play Updates

Deutsche Bank - DB - close: 36.03 change: -1.08

Stop Loss: 41.55
Target(s): 30.50
Current Option Gain/Loss: Dec$35p: +11.5% & Jan$30p: +24.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/17 update: European stocks continue to sink while the EU debt crisis smolders. Shares of DB have closed under technical support at the 50-dma and are now resting near possible price support near $36.00. After a drop from $40.00 you could argue DB is short-term oversold and due for a bounce so I am not suggesting new positions at this time.

Earlier Comments:
Keep position size small to limit risk. This is going to be a volatile trade. FYI: The Point & Figure chart for DB is bearish with a $30 target.

- Suggested Positions - (small positions)

Long DEC $35 PUT (DB1117x35) Entry $2.60

- or -

Long JAN $30 PUT (DB1221m30) Entry $2.09

11/12 new stop loss @ 41.55
11/11 DB gapped open higher at $39.00

Entry on November 11 at $39.00
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 4.3 million
Listed on November 10, 2011


CLOSED BULLISH PLAYS

Anadarko Petroleum - APC - close: 76.44 change: -2.51

Stop Loss: 77.45
Target(s): 98.50
Current Option Gain/Loss: Dec$85c: -49.2% & Jan $90c: -45.6%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
11/17 update: APC accelerated lower with a -3.1% decline. Shares traded under their 30-dma and 200-dma intraday. Our stop loss was hit at $77.45.

I'd keep APC on your watch list for a bounce from support in the $75-74 zone or a close over resistance at $85.00.

- Suggested Positions -

DEC $85 call (APC1117L85) Entry $2.60 exit $1.32 (-49.2%)

- or -

JAN $90 call (APC1221A90) Entry $2.76 exit $1.50 (-45.6%)

11/17 stopped out at $77.45
11/11 Triggered at $81.05
11/09 adjusting our trigger to buy calls down to $81.05 and stop loss to $77.45.

chart:

Entry on November 11 at $81.05
Earnings Date 01/31/12 (unconfirmed)
Average Daily Volume = 5.0 million
Listed on November 8, 2011


DaVita Inc. - DVA - close: 71.26 change: -2.09

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

Comments:
11/17 update: DVA underperformed the market with a -2.8% decline. Shares look headed for the $70.00 level or its 50-dma near $69.

Given the market's (and DVA's) new weakness we are removing this stock from the newsletter. Our play has not opened. Readers may want to keep it on their watch list for a breakout past $75.00 down the road.

Trade Did Not Open

chart:

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: 95.17 change: -2.79

Stop Loss: 94.90
Target(s): 106.00
Current Option Gain/Loss: Dec$105c: -50.8% & Jan$105c: -27.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/17 update: Our aggressive entry point on FLS did not pay off. Shares underperformed the market today with a -2.8% decline and an intraday breakdown under the $95.00 level. Our stop was hit at $94.90.

Traders may want to keep FLS on their watch list for a bounce from $90 or a breakout past $100.

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.

(small positions) - Suggested Positions -

DEC $105 call (FLS1117L105) Entry $2.95 exit $1.45 (-50.8%)

- or -

JAN $105 call (FLS1221A105) Entry $4.65 exit $3.35 (-27.9%)

11/17 stopped out at $94.90
11/12 adjusted exit target to $106.00
11/11 trade opened at $97.30
11/09 New strategy: trigger to buy calls at $97.30, stop loss $93.95. Small positions only

chart:

Entry on November 11 at $97.30
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 712 thousand
Listed on November 8, 2011


SPDR Gold Shares - GLD - close: 167.10 change: -4.41

Stop Loss: 168.45
Target(s): 182.50
Current Option Gain/Loss: -22.5%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
11/17 update: Ouch! It was a rough day for gold prices. Futures fell -3% to $1,720.20 an ounce. The theory behind today's losses was traders selling gold to raise money for margin calls on other assets (like stocks).

The GLD gapped open lower at $170.04 and fell to its 30 and 50-dma near $167. Our stop loss was hit at $168.45.

- Suggested Positions - (Small Positions)

2012 Jan $175 call (GLD1221A175) Entry $6.00 exit $4.65 (-22.5%)

11/17 stopped out at $168.45
11/16 new stop loss @ 168.45
11/15 new stop loss @ 166.40
11/07 new stop loss @ 164.95

chart:

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: 92.29 change: -0.86

Stop Loss: 91.95
Target(s): 99.75
Current Option Gain/Loss: Nov95c: -98.5% & Dec95c: -58.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/17 update: Traders were in a mood to take money off the table. Profit taking in MCD pushed the stock under the $92.00 level and shares hit our stop at $91.95. I would keep MCD on your watch list. A dip or a bounce near the $90.00 level and its 50-dma could be a new bullish entry point.

(small positions)- Suggested Positions -

NOV $95 call (MCD1119K95) Entry $0.70 exit $0.01 (-98.5%)

- or -

DEC $95 call (MCD1117L95) Entry $1.55 exit $0.65 (-58.0%)

11/17 stopped out at @91.95
11/12 new stop loss @ 91.95
11/07 MCD hit our trigger at $94.05

chart:

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


Occidental Petroleum - OXY - close: 94.43 change: -3.17

Stop Loss: 95.75
Target(s): 104.50
Current Option Gain/Loss: Dec$100c: -48.8% & Jan105c: -42.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/17 update: Oil and energy stocks were hit hard today with the OIX index down -2.1% and the OSX oil services index down -3.1%. Shares OXY underperformed with a -3.2% plunge. Shares broke down under the 200-dma and its trend of higher lows. Our stop was hit at $95.75.

Earlier Comments:
We do want to keep our position size small because the oil stocks can be a volatile bunch.

(small positions) - Suggested Positions -

DEC $100 call (OXY1117L100) Entry $5.04 exit 2.58 (-48.8%)

- or -

JAN $105 call (OXY1221A105) Entry $4.79 exit 2.75 (-42.5%)

11/17 stopped out @ 95.75
11/11 trade opened.

chart:

Entry on November 11 at $99.67
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 5.4 million
Listed on November 10, 2011


Parker Hannifin Corp. - PH - close: 80.86 change: -2.32

Stop Loss: 81.45
Target(s): 89.75
Current Option Gain/Loss: Dec$90c: -60.0% & Jan $90c: -40.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/17 update: Suddenly Tuesday's breakout past resistance near $85.00 looks like a bull-trap pattern. PH accelerated lower with a breakdown under its simple 200-dma. Our stop loss was hit at $81.45.

- Suggested Positions -

DEC $90 call (PH1117L90) Entry $1.75 exit $0.70 (-60.0%)

- or -

JAN $90 call (PH1221A90) Entry $3.60 exit $2.15 (-40.2%)

11/17 stopped out at $81.45
11/15 trade triggered at $85.25

chart:

Entry on November 15 at $85.25
Earnings Date 01/19/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on November 12, 2011


Under Armour, Inc. - UA - close: 78.60 change: -2.25

Stop Loss: 79.35
Target(s): 92.50
Current Option Gain/Loss: -53.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/17 update: UA is down sharply in the last two session. Today's -2.7% drop is a breakdown under what should have been support near $80.00. Our stop loss was hit at $79.35.

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

(small positions) - Suggested Positions -

DEC $85 call (UA1117L85) Entry $3.75 exit $1.75 (-53.3%)

11/17 stopped out at $79.35
11/10 adjusted trigger to 82.55 and stop to 79.35
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.

chart:

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: 91.40 change: -2.00

Stop Loss: 91.25
Target(s): 99.75
Current Option Gain/Loss: Nov$95c: -31.8% & Dec$95c: -34.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/17 update: Visa has lost two dollars twice in a row. Shares actually fell to $90.86 intraday before bouncing off its 50-dma. Our stop loss was hit at $91.25.

I would keep Visa on your watch list for a breakout past the $96.00 level.

- Suggested Positions -

Dec. $95 call (V1117L95) Entry $2.75 exit $1.80 (-34.5%)

11/16 new stop loss @ 91.25
11/16 scheduled exit for Nov.$95 calls. exit $0.75 (-31.8%)
11/15 plan to exit Nov.$95 calls at the open tomorrow morning.
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

chart:

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: 97.84 change: -3.27

Stop Loss: 97.40
Target(s): 107.75
Current Option Gain/Loss: -46.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/17 update: It was a rough morning for VMW. The stock opened lower, under support near $101.00. Shares briefly bounced off the $99.00 level only to roll over again and plunge toward $96.50. Our stop loss was hit at $97.40.

Earlier Comments:
We want to keep our position size small to limit risk.

(small positions) - Suggested Positions -

DEC $105 call (VMW1117L105) Entry $3.35 exit $1.80 (-46.2%)

11/17 stopped out @ 97.40
11/14 trade opened at $101.00
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.

chart:

Entry on November 14 at $101.00
Earnings Date 01/24/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on November 3, 2011


Whole Foods Market, Inc. - WFM - close: 65.86 change: -0.99

Stop Loss: 67.40
Target(s): 74.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/17 update: We are giving up on WFM as a bullish candidate. Shares have continued to slip slowly lower with a pattern of lower highs and lower lows. I might reconsider if we see WFM bounce from its simple 200-dma near $63.00.

Our trade never opened.

chart:

Entry on November xx at $ xx.xx
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on November 12, 2011