Current Portfolio:


CALL Play Updates

Caterpillar - CAT - close: 95.96 change: -0.89

Stop Loss: 95.45
Target(s): 107.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/06 update: CAT failed to make any progress today. Shares actually broke down from the short-term 96-98 trading range. Now the stock looks as if it will dip to its 50-dma or possibly fill the gap with a drop toward $92.00. Our trade is unopened. We're still waiting for a breakout past resistance.

I am suggesting we buy calls with a trigger to open positions at $98.55. If triggered we'll use a stop loss at $95.45. Our target is $107.00.

Trigger @ 98.55

- Suggested Positions -

buy the 2012Jan $100 call (CAT1221A100)

Entry on December xx at $ xx.xx
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 8.1 million
Listed on December 03, 2011


Edwards Lifesciences - EW - close: 65.18 change: -0.06

Stop Loss: 63.25
Target(s): 69.50
Current Option Gain/Loss: Dec$65c: - 5.1% & Jan$70c: -14.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/06 update: It was a quiet day for EW. Shares did manage a bounce off its intraday lows. Shares are getting squeezed between their 10-dma and 20-dma. I am not suggesting new positions at this time.

More conservative traders may want to exit early now to avoid or limit any losses.

- Suggested Positions -

Long DEC $65 call (EW1117L65) Entry $1.95

- or -

Long 2012Jan $70 call (EW1221A70) Entry $1.70

12/03 new stop loss @ 63.25
11/30 new stop loss @ 61.95
11/28 trade opened. EW gapped higher at $63.97
11/26 trade still not open. Adjusting stop loss to $59.90
11/23 still not open
11/22 not open yet

Entry on November 28 at $63.97
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on November 21, 2011


Family Dollar Stores - FDO - close: 58.78 change: -0.42

Stop Loss: 56.75
Target(s): 64.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/06 update: FDO continues to churn sideways. Shares essentially erased yesterday's minor gain. We have a buy-the-dip trigger at $58.00. More conservative traders may want to use a trigger at $57.50 or $57.00 instead.

Earlier Comments:
We want to keep our position size small because the spreads on the options below are getting wide, making this trade more risky.

buy the dip Trigger @ 58.00 (small positions)

- Suggested Positions -

buy the JAN $60 call (FDO1221A60)

12/03/11 Adjust buy-the-dip trigger to $58.00
12/03/11 new stop loss @ 56.75
11/30 New strategy to account for FDO's bullish breakout higher. We want to use a trigger at $58.50 to open bullish positions with a stop at $56.45. New target is $64.00. I've updated our option strikes.
11/26 new strategy. buy a dip at $54.50, stop loss @ 53.75. Keep positions small because option spreads are wide.
11/22 not open yet

Entry on November xx at $ xx.xx
Earnings Date 01/04/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 21, 2011


Hewlett-Packard Co. - HPQ - close: 28.18 change: +0.06

Stop Loss: 26.75
Target(s): 32.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/06 update: HPQ rebounded off its morning low and managed to eke out another gain. Yet shares remain under resistance near $28.50.

I am suggesting a trigger to buy calls at $28.65. However, this is an aggressive entry point. The top of the August gap down near $29.50 could be resistance. Plus HPQ could find round-number resistance at $30.00 and technical resistance at the 150-dma, simple 200-dma and exponential 200-dma all above in the $30.00-34.00 zone. Thus we want to keep our position size small to limit our risk. We'll se our stop loss at $26.75 and our exit target at $32.00. FYI: The Point & Figure chart for HPQ is bullish with a $41 target.

Trigger @ $28.65

- Suggested Positions -

buy the 2012Jan $30 call (HPQ1221A30)

Entry on December xx at $ xx.xx
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 22.4 million
Listed on December 05, 2011


JB Hunt Transport Services - JBHT - close: 45.53 change: -0.50

Stop Loss: 44.75
Target(s): 48.25
Current Option Gain/Loss: + 4.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/06 update: JBHT spent most of the day churning on either side of the $45.50 level. If the market pulls back tomorrow we could easily see JBHT hit our stop loss at $44.75. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week target is $48.25. JBHT doesn't move super fast so give yourself time for the trade to work. FYI: The Point & Figure chart for JBHT is bullish with a $63 target.

- Suggested Positions -

Long 2012JAN $45 call (JBHT1221A45) Entry $2.05

12/03/11 new stop loss @ 44.75. More aggressive traders may want to leave their stop under $44.00 instead
11/30/11 new stop loss @ 42.45
11/29/11 triggered at $44.35

Entry on November 29 at $44.35
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 22, 2011


NetApp, Inc. - NTAP - close: 37.28 change: -0.26

Stop Loss: 34.95
Target(s): 39.50
Current Option Gain/Loss: +31.4%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/06 update: Profit taking in NTAP was relatively mild. Shares did bounce off their intraday lows. Volume was light on today's dip. Shares are facing resistance near $38.00 and its 20-dma and 50-dma. I am not suggesting new positions with NTAP sitting just under resistance.

Earlier Comments:
I do consider a more aggressive trade. We want to keep our position size small to limit risk. FYI: Readers should note that there is a risk that NTAP might make an acquisition soon. There are rumors floating around that NTAP could buy Quantum (QTM) or CommVault (CVLT) in an effort to better compete with rival EMC. If NTAP does make a bid for either company typically shares of the buyer go down while shares of the target go up.

- Suggested Positions - (small positions)

Long JAN $35 call (NTAP1221A35) Entry $2.51

12/03/11 new stop loss @ 34.95

Entry on November 29 at $35.82
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 9.2 million
Listed on November 28, 2011


O'Reilly Automotive - ORLY - close: 79.54 change: +0.01

Stop Loss: 74.90
Target(s): 84.00
Current Option Gain/Loss: Dec$75c: +61.4% & Jan$80c: +43.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/06 update: ORLY closed virtually unchanged after a sideways session. Looking at the intraday chart and ORLY appears ready to dip back toward the $78.00 level. I am not suggesting new positions at this time.

NOTE: The plan was to exit our December calls at the open this morning.

- Suggested Positions -

DEC $75 call (ORLY1117L75) Entry $2.80 exit $4.52 (+61.4%)

- or -

Long JAN $80 call (ORLY1221A80) Entry $1.50*

12/06/11 Planned exit Dec. calls at the open. The Bid on the Dec. $75 call was $4.52 (+61.4%)
12/05/11 Strategy change: Exit the December calls tomorrow at the open. Move the exit target for the January calls from $82.50 to $84.00.
12/03/11 new stop loss @ 74.90
11/28/11 ORLY gapped open higher at $76.96, which was above our trigger to buy calls at $76.15.
*Jan $80 call did not trade today. Entry price is an estimate.

Entry on November 28 at $76.96
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 26, 2011


Phillip Morris Intl. - PM - close: 75.58 change: -0.29

Stop Loss: 73.75
Target(s): 78.50
Current Option Gain/Loss: + 81.2%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/06 update: PM also produced a very quiet sideways session. If the market does pull back we can look for PM to dip toward the $74.00 level. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week target is $78.50. FYI: The Point & Figure chart for PM is bullish with a $95 target.

- Suggested Positions -

Long 2012 Jan $75 call (PM1221A75) Entry $1.12

12/05 Call is up +100%, readers may want to exit now!
12/03 new stop loss @ 73.75
11/30 new stop loss @ 71.40
11/23 adjusted stop loss to $69.49
11/22 trade opened. PM opened at $72.11

Entry on November 22 at $72.11
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 7.3 million
Listed on November 19, 2011


Boston Beer Co. Inc. - SAM - close: 101.72 change: -2.19

Stop Loss: 98.75
Target(s): 109.50
Current Option Gain/Loss: -29.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/06 update: SAM underperformed the market today with a -2.1% decline. Shares look poised to test the $100 level as support again. Wait for the dip or bounce near $100.00 as our next entry point.

Earlier Comments:
Our exit target is $109.50. More aggressive traders may want to aim higher. FYI: The Point & Figure chart for SAM is bullish with a $117 target. NOTE: The most recent data listed short interest at 20% of SAM's extremely small 8.3 million-share float. That's definitely a recipe for a short squeeze.

(small positions) - Suggested Positions -

Long JAN $105 call (SAM1221A105) Entry $2.05

12/03/11 new stop loss @ 98.75
12/02/11 trade triggered at $102.00

Entry on December 02 at $102.00
Earnings Date 03/08/12 (unconfirmed)
Average Daily Volume = 72.3 thousand
Listed on December 01, 2011


PUT Play Updates

SPDR S&P 500 ETF - SPY - close: 126.26 change: +0.04

Stop Loss: 127.55
Target(s): 120.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/06 update: The market rallied again this afternoon but the SPY struggled with resistance near the $127.00 level. Readers could use this failure to breakout as a new entry point to launch new bearish positions.

More aggressive traders may want to inch their stop higher so it's just above $128.00 instead.

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

- Suggested Positions -

Long 2012Jan $120 PUT (SPY1221M120) Entry $2.67

12/02/11 trade opened at $126.12 (gap higher), trigger was 126.00

Entry on December 02 at $126.12
Earnings Date --/--/--
Average Daily Volume = 224 million
Listed on November 30, 2011


Thermo Fisher Scientific - TMO - close: 47.18 change: +0.40

Stop Loss: 48.25
Target(s): 42.75
Current Option Gain/Loss: Dec$45p: -22.2% & Jan$45P: -10.7%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
12/06 update: TMO managed to outperform the major indices today with a +0.8% gain. Yet the path of least resistance still appears to be down. I would still consider new positions now or you could wait for a new failed rally under the $48.00 level.

Our target is $42.75. FYI: The Point & Figure chart for TMO is bearish with a $41 target.

- Suggested Positions -

Long DEC $45 put (TMO1117X45) Entry $0.45
(about 2 weeks left for Decembers)

- or -

Long JAN $45 put (TMO1221M45) Entry $1.40

12/05/11 TMO gapped open higher at $47.10

Entry on December 05 at $47.10
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 3.5 million
Listed on December 03, 2011


Watson Pharmaceuticals - WPI - close: 62.39 change: -0.87

Stop Loss: 64.25
Target(s): 56.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/06 update: WPI is still churning sideways in the $64-62 zone. There is no change from my weekend comments.

I am suggesting we use a trigger to buy puts at $61.75 with a stop loss at $64.25. There is potential support at $60.00 but I am aiming for the $56.00 level.

Trigger @ $61.75

- Suggested Positions -

buy the DEC $60 PUT (WPI1117X60)
(about 2 weeks left for Decembers)

- or -

buy the JAN $60 PUT (WPI1221M60)

Entry on December xx at $ xx.xx
Earnings Date 02/14/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on December 03, 2011