Editor's Note:

Stocks produced an oversold bounce thanks to some positive economic data out this morning. Yet stocks seemed to struggle to hold on to their gains.

Our NTAP play has been stopped out. We have exited our December options on TMO and WPI. We need to exit our IWM play by the close tomorrow.

-James

Current Portfolio:


CALL Play Updates

Boeing Co. - BA - close: 70.61 change: +0.67

Stop Loss: 69.25
Target(s): 77.00
Current Option Gain/Loss: -28.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/15 update: BA saw a bounce off the bottom of its trading range but shares struggled to reach the $71.00 level I remain cautious here. No new positions at this time. We have a stop at $69.25. More conservative traders may want a stop closer to $69.70 instead.

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


Phillip Morris Intl. - PM - close: 75.92 change: +1.06

Stop Loss: 73.75
Target(s): 78.50
Current Option Gain/Loss: + 64.2%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/15 update: PM displayed some relative strength with a +1.4% gain. Although I remain cautious here. If you look hard enough PM appears like it might be building a trend of lower highs. It's still very short-term at this point. PM still has overhead resistance at $77.00. 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: 102.27 change: +0.27

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:
12/15 update: SAM continues to hover near the $102 level. The stock appears to be churning inside the $100-105 zone, which isn't necessarily a bad thing. Nimble trades can still buy dips or bounces near the $100.00 mark.

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: 63.56 change: +0.47

Stop Loss: 62.49
Target(s): 69.75
Current Option Gain/Loss: -41.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/15 update: VAR gapped open higher this morning but then spent the rest of the session churning sideways in a 40-cent range. I remain cautious on the stock.

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

BMC Software Inc. - BMC - close: 33.56 change: +0.23

Stop Loss: 35.05
Target(s): 30.05
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/15 update: BMC followed the market higher but it was a volatile morning. The larger trend remains bearish. I don't see any changes from my prior comments.

I am suggesting a trigger to open bearish put positions at $32.75. We'll start this trade with a wide stop at $35.05. More conservative traders may want to use a tighter stop loss instead. Our target is $30.50. FYI: The Point & Figure chart for BMC is bearish with a $29 target.

Trigger @ 32.75

- Suggested Positions -

buy the 2012Jan $32.50 PUT (BMC1221M32.5)

Entry on December xx at $ xx.xx
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 14, 2011


Check Point Software - CHKP - close: 52.72 change: +0.75

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:
12/15 update: CHKP managed to recoup most of yesterday's decline. Yet the bearish trend of lower highs is still in effect. Readers could look for a move toward the 20-dma in the $53.75-54.00 zone as a new bearish entry point or wait for CHKP to roll over near this area and then consider new positions.

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: 48.27 change: -0.04

Stop Loss: 52.05
Target(s): 45.15
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/15 update: FLR failed to fully participate in the market's oversold bounce. The stock gapped higher this morning and then faded back toward unchanged. The move looks like a new entry point for bearish positions.

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: 18.60 change: -0.28

Stop Loss: 20.55
Target(s): 16.75
Current Option Gain/Loss: + 19.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/15 update: JNPR is still underperforming the market. Shares also saw their morning rally attempt fade. JNPR ended the session down -1.4%. 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: 68.41 change: +0.69

Stop Loss: 71.05
Target(s): 60.50
Current Option Gain/Loss: -20.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/15 update: I cautioned readers yesterday that the action on Wednesday was a bit troubling if you're bearish on MON. The stock outperformed today with a +1% gain but at this point it's just an oversold bounce. 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: + 9.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/15 update: After a -3% decline for the week in three days it's not surprising the S&P 500 (& SPY) see an oversold bounce. Gains faded off the opening pop. There is no change from my prior comments.

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: 44.15 change: +0.40

Stop Loss: 46.15
Target(s): 42.75
Current Option Gain/Loss: Dec$45p: +111.1% & Jan$45P: +39.2%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
12/15 update: Hmm... did our target just get hit? If you look at an intraday chart it appears that TMO traded down to $42.71 this morning. Yet that must be a bad tick since the quote services I checked both listed today's low at $43.06. The stock's morning weakness was due to an analyst downgrade before the opening bell.

It was our plan to exit our December puts at the open this morning. Those opened with a bid at $0.95 (+111.1%). We still have the January puts and our target is $42.75 but readers may want to aim lower. I am not suggesting new positions at this time.

- Suggested Positions -

(planned exit this morning)
DEC $45 put (TMO1117X45) Entry $0.45 exit $0.95 (+111.1%)

- or -

Long JAN $45 put (TMO1221M45) Entry $1.40

12/15/11 planned exit for Dec. $45 put. bid @ 0.95 (+111.1%)
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: 60.91 change: +0.94

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

Comments:
12/15 update: I had cautioned readers that WPI might see a bounce near $60.00. Shares outperformed the market with a +1.5% oversold bounce today. The stock should find resistance at its 10-dma or the $62.00 level.

It was our plan to exit our December puts at the open this morning.

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

- Suggested Positions -

(planned exit) DEC $60 PUT (WPI1117X60) Entry $0.80 exit $0.70 (-12.5%)

- or -

Long JAN $60 PUT (WPI1221M60) Entry $2.00

12/15/11 planned exit for Dec. $60 puts, bid $0.70 (-12.5%)
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: 71.70 change: +0.66

Stop Loss: n/a
Target(s): TBD
Current Option Gain/Loss: -38.2%
Time Frame: up to December options expiration
New Positions: Must Be Opened on Thursday 12/08

Comments:
12/15 update: The market's oversold bounce produced a +0.9% rebound in the IWM. It looks like the $72 level might be short-term resistance.

Tomorrow is our last day for December options. We're planning to exit at the closing bell.

- Market Neutral Strangle - cost: 2.04 value: 1.26 (-38.2%)

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 $1.26/1.37

12/15/11 prepare to exit at the closing bell tomorrow

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


CLOSED BULLISH PLAYS

NetApp, Inc. - NTAP - close: 36.28 change: -0.85

Stop Loss: 36.25
Target(s): 39.50
Current Option Gain/Loss: - 3.9%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/15 update: The tech-heavy NASDAQ continues to underperform. NTAP was definitely an anchor as the stock underperformed with a -2.2% drop. Shares fell to the $36.00 level this afternoon. Our stop was hit at $36.25.

Earlier Comments:
I do consider a more aggressive trade. We want to keep our position size small to limit risk.

- Suggested Positions - (small positions)

JAN $35 call (NTAP1221A35) Entry $2.51 exit $2.41 (-3.9%)

12/15/11 stopped out at $36.25
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

chart:

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