Current Portfolio:


CALL Play Updates

Boeing Co. - BA - close: 69.94 change: -0.96

Stop Loss: 69.25
Target(s): 77.00
Current Option Gain/Loss: -33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: The stock market's widespread decline pulled BA to the bottom of its recent trading range. Shares are hovering near support at the $70 level and its 200-dma is just below at $69.34. We have a stop loss at $69.25 but more conservative traders may want to abandon ship and exit early. I am not suggesting new positions in BA at this time.

Earlier Comments:
There is potential resistance at $75.00 and more conservative traders may want to exit there. I am aiming for $77.00. FYI: The Point & Figure chart for BA is bullish with a $79 target.

- Suggested Positions -

Long 2012Jan $75 call (BA1221A75) entry $1.08

12/13/11 trade opened
12/12/11 adjusted stop loss to $69.25
12/12/11 trade did not open, try again.

Entry on December 13 at $71.67
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 6.2 million
Listed on December 10, 2011


NetApp, Inc. - NTAP - close: 37.13 change: -0.79

Stop Loss: 36.25
Target(s): 39.50
Current Option Gain/Loss: +21.5%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/14 update: Gains in NTAP are fading. Readers may want to exit early. If the market continues to drop tomorrow we could see NTAP h it our stop loss. I am not suggesting new positions at this time.

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

12/10/11 new stop loss @ 36.25
12/08/11 new stop loss @ 35.75, more conservative traders may want to exit immediately.
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


Phillip Morris Intl. - PM - close: 74.86 change: -0.65

Stop Loss: 73.75
Target(s): 78.50
Current Option Gain/Loss: + 25.8%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/14 update: PM tried to rally this morning but failed near yesterday's highs. The stock settled near the bottom of its recent trading range. More conservative traders may want to raise their stop loss toward the $74.40 area. 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: 102.00 change: +0.33

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:
12/14 update: SAM continues to show some relative strength. Traders bought the dip near round-number, psychological support at $100 this morning. While normally I might be tempted to buy calls on a bounce from support I am not suggesting new positions tonight.

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


Varian Medical Sys. - VAR - close: 63.09 change: -0.93

Stop Loss: 62.49
Target(s): 69.75
Current Option Gain/Loss: -43.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: VAR has sunk toward last week's low near $63.00. Yesterday's move is starting to look like a bull trap pattern. We are tweaking our stop loss and moving it from $62.80 down to $62.49 so that it's under the simple 200-dma. However, if the market continues to drop tomorrow we'll probably see VAR get stopped out.

No new positions at this time.

- Suggested Positions -

Long JAN $65 call (VAR1221A65) entry $2.65

12/14/11 adjust stop loss to $62.49

Entry on December 13 at $65.25
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on December 12, 2011


PUT Play Updates

Check Point Software - CHKP - close: 51.97 change: -0.95

Stop Loss: 55.05
Target(s): 48.00
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: CHKP finally broke support near $52.80. The stock fell to $50.74 before paring its losses. I am not suggesting new positions at this time.

Earlier Comments:
There is potential support near $51.00 but we're aiming for the $48.00 level. More aggressive traders could aim lower. FYI: The Point & Figure chart for CHKP is bearish with a $46 target.

(Small Positions) - Suggested Positions -

Long Jan $50 PUT (CHKP1221M50) Entry $1.20

12/13/11 new stop loss @ 55.05

Entry on December 09 at $53.29
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 08, 2011


Fluor Corp. - FLR - close: 48.31 change: -1.69

Stop Loss: 52.05
Target(s): 45.15
Current Option Gain/Loss: + 8.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: Our new play on FLR has been triggered. Shares hit our entry point to buy puts at $49.35 this morning. The stock closed down -3.3%, underperforming the market's major indices.

Earlier Comments:
We want to keep our position size small because FLR is arguably already oversold here with a drop from $56 to $50 over the last several days but that doesn't mean it can't get more oversold. FYI: The Point & Figure chart for FLR is bearish with a $43 target.

- Suggested Positions - (Small Positions)

Long 2012Jan $45 PUT (FLR1221M45) entry $1.20

Entry on December 14 at $49.35
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on December 13, 2011


Juniper Networks - JNPR - close: 18.88 change: -0.11

Stop Loss: 20.55
Target(s): 16.75
Current Option Gain/Loss: + 14.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: JNPR continues to drop but it seems to be fighting every step. The stock dipped to $18.26 before bouncing back and reducing its loss to just -0.5%. The stock continues to look short-term oversold. I am adjusting our stop loss down to $20.55. I am not suggesting new positions at this time.

(small positions) - Suggested Positions -

Long 2012Jan $17.50 PUT (JNPR1221M17.5) entry $0.57

12/14/11 new stop loss @ 20.55
12/12/11 JNPR gapped open lower at $19.58, opening our trade. Stop loss at $20.75

Entry on December 12 at $19.58
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 8.8 million
Listed on December 10, 2011


Monsanto Co - MON - close: 67.72 change: -0.33

Stop Loss: 71.05
Target(s): 60.50
Current Option Gain/Loss: - 3.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: Our new trade on MON has been opened but I am immediately concerned. Shares dipped to $67.09 this morning but bounced back and limited its losses to just -0.5%. The lack of follow through lower in the breakdown to new relative lows is worrisome. After today's performance I would probably wait for MON to fall under $67.00 or see a failed rally near $70.00 before considering new positions.

Earlier Comments:
Our target is $60.50. More conservative traders may want to exit near $63.00 instead. FYI: The Point & Figure chart for MON is bearish with a $60 target.

(small positions) - Suggested Positions -

Long 2012Jan $65 PUT (MON1221M65) entry $2.05

Entry on December 14 at $67.35
Earnings Date 01/05/12 (unconfirmed)
Average Daily Volume = 3.7 million
Listed on December 13, 2011


SPDR S&P 500 ETF - SPY - close: 121.74 change: -1.31

Stop Loss: 127.55
Target(s): 120.50
Current Option Gain/Loss: +24.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: The market sell-off is picking up speed. The SPY broke down under its simple 50-dma today. The newsletter is planning to exit this position at $120.50. More aggressive traders may want to choose a lower exit target.

I am not suggesting new positions at this time.

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: 43.75 change: -0.94

Stop Loss: 46.15
Target(s): 42.75
Current Option Gain/Loss: Dec$45p: +166.6% & Jan$45P: +64.2%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
12/14 update: TMO has broken down to new 52-week lows. We are quickly running out of time on our December $45 puts. I am suggesting we exit these puts at the open tomorrow morning. Currently these Dec. $45 puts have a bid of $1.20 (position +166.6%). We'll keep our exit target for the January puts at $42.75.

Please note that I am adjusting our stop loss down to $46.15.

- Suggested Positions -

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

- or -

Long JAN $45 put (TMO1221M45) Entry $1.40

12/14/11 Prepare to exit Dec. $45 puts at the open tomorrow, current bid on these puts is $1.20 (+166.6%)
12/14/11 new stop loss @ 46.15
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: 59.97 change: -0.60

Stop Loss: 64.25
Target(s): 56.00
Current Option Gain/Loss: Dec$60p: -18.7% & Jan$60p: +12.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: WPI has fallen to round-number support at $60.00. This is a good spot for this stock to bounce so we're not suggesting new positions at this time.

NOTE: Our December puts expire in two days. I am suggesting we exit our Dec. $60 puts at the open tomorrow morning. The current bid is $0.65.

Earlier Comments:
There is potential support at $60.00 but we are aiming for the $56.00 level.

- Suggested Positions -

Long DEC $60 PUT (WPI1117X60) Entry $0.80
(only 2 trading days left for Decembers)

- or -

Long JAN $60 PUT (WPI1221M60) Entry $2.00

12/14/11 Prepare to exit Dec. $60 puts at the open tomorrow, current bid on these puts is $0.65

Entry on December 07 at $61.75
Earnings Date 02/14/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on December 03, 2011


Market Neutral Play Updates

iShares Russell 2000 ETF - IWM - close: 71.04 change: -0.90

Stop Loss: n/a
Target(s): TBD
Current Option Gain/Loss: + 6.8%
Time Frame: up to December options expiration
New Positions: Must Be Opened on Thursday 12/08

Comments:
12/14 update: The small cap Russell 2000 index and the IWM have both broken down under their simple 50-dma with today's drop. This index is nearing potential support near the 700 level (70.00 for the IWM). Will it bounce or will it breakdown? The value on our strangle play has risen to $2.18 (+6.8%).

Traders have a decision to make. Do you exit at the open tomorrow to preserve capital? You could exit tomorrow at the close instead. We are taking an aggressive stance on this trade. Stocks are likely to decline into the weekend. We'll plan on exiting on Friday at the closing bell.

- Market Neutral Strangle - cost: 2.04 value: 2.18 (+ 6.8%)

Long DEC $77 call (IWM1117L77) Entry $0.58, current bid/ask $0.00/0.01

- Also Buy the -

Long DEC $73 put (IWM1117X73) Entry $1.46, current bid/ask $2.18/2.28

Entry on December 08 at $73.90
Earnings Date --/--/--
Average Daily Volume = 61 million
Listed on December 07, 2011


CLOSED BULLISH PLAYS

O'Reilly Automotive - ORLY - close: 78.58 change: -0.33

Stop Loss: 77.85
Target(s): 84.00
Current Option Gain/Loss:(Dec$75c: +61.4%)& Jan$80c: -10.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/14 update: Our ORLY trade has been stopped out. I warned readers that the recent action looked like a reversal pattern. Today saw a drop to $77.69 before bouncing. Our stop loss was hit at $77.85. The larger trend for ORLY is still up but readers may want to wait for shares to bounce off the 50-dma before considering new bullish positions.

- Suggested Positions -

JAN $80 call (ORLY1221A80) Entry $1.50* exit 1.35 (-10.0%)

12/14/11 stopped out @ 77.85
12/13/11 caution! readers may want to exit immediately
12/12/11 new stop loss @ 77.85
12/10/11 new stop loss @ 76.90
12/08/11 new stop loss @ 76.40, more conservative traders may want to exit early.
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.

chart:

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