Editor's Note:

The U.S. markets experienced a broad-based pull back with the major indices all down -1.1% or worse on Wednesday.

We saw our OPEN trade get stopped out.

-James

Current Portfolio:


CALL Play Updates

The Andersons, Inc. - ANDE - close: 43.87 change: -1.62

Stop Loss: 42.75
Target(s): 49.75
Current Option Gain/Loss: -53.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: The stock market's widespread decline hit ANDE pretty hard with a -3.5% drop. Shares are under what should have been short-term support near $44.00 but they are still trading above the simple 10-dma. A bounce from here could be used as a new entry point. I am raising our stop loss to $42.75.

(small positions) - Suggested Positions -

Long Jan $45 call (ANDE1221A45) entry $1.60
(readers might want to consider buying February calls instead)

12/28/11 new stop loss @ 42.75
12/23/11 triggered at $45.25

Entry on December 23 at $45.25
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 211 thousand
Listed on December 21, 2011


Boeing Co. - BA - close: 73.26 change: -1.01

Stop Loss: 71.40
Target(s): 77.00
Current Option Gain/Loss: -12.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: BA faded lower with the major indices. Technically today's move has produced a bearish engulfing candlestick pattern. We'll see if there is any follow through tomorrow. I am not suggesting new positions at this time. We will adjust our stop loss higher to $71.40.

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

12/28/11 new stop loss @ 71.40
12/22/11 new stop loss @ 69.85
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


Dover Corp. - DOV - close: 57.61 change: -1.31

Stop Loss: 56.75
Target(s): 64.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/28 update: DOV couldn't get past the $59.00 level today. Shares gave up -2.2% on the session. The stock might see short-term support near the $57.00 level and aggressive traders may want to look for an entry there. We are suggesting readers wait for a breakout higher with a trigger to buy calls at $59.55.

Earlier Comments:
More conservative traders may want to wait for DOV to rally past the $60.00 level instead since $60.00 might be considered round-number resistance. If we are triggered at $59.55 our target is $64.50. FYI: The Point & Figure chart for DOV is bullish with a $75 target.

Trigger @ 59.55

- Suggested Positions -

buy the Jan $60 call (DOV1221A60)

Entry on December xx at $ xx.xx
Earnings Date 01/27/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on December 27, 2011


Hi Tech Pharmacal Co. - HITK - close: 38.21 change: -1.08

Stop Loss: 36.70
Target(s): 44.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: HITK's bounce is already reversing. Shares are back to testing short-term support near $38.00. We are still on the sidelines. The current plan is to buy calls (small positions) at $40.15 with a stop at $38.85. We want to keep our position size small to limit our risk.

Earlier Comments:
The most recent data listed short interest at more than 13% of the very small 10 million share float. Our target is $44.50. Readers might want to aim higher. The Point & Figure chart for HITK is bullish with a $58 target.

New Trigger, buy calls @ 40.15, stop loss @ 38.85 (small positions)

- Suggested Positions -

buy the 2012Jan $40 call (HITK1221A40)

12/27/11 new trigger @ 40.15, stop loss 38.85
12/22/11 not open yet. New Trigger @ 37.25, stop 36.70
12/21/11 trade not open yet. (SP500 opened lower) Try again. New stop loss @ 37.90

Entry on December xx at $ xx.xx
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 298 thousand
Listed on December 20, 2011


iShares Transportation - IYT - close: 88.72 change: -1.46

Stop Loss: 87.45
Target(s): 94.75 or 98.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/28 update: After showing relative strength last week the transports underperformed today. The IYT fell -1.6%. We are still waiting for a breakout. Our plan is to use a trigger at $90.75 to open bullish positions. I have listed individual targets depending on which month you choose to play.

Trigger @ 90.75

- Suggested Positions -

buy the Jan $95 call (IYT1221A95)
target 94.75

- or -

buy the Feb $95 call (IYT1218B95)
target 98.50

Entry on December xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 582 thousand
Listed on December 22, 2011


JPMorgan Chase & Co - JPM - close: 32.65 change: -0.38

Stop Loss: 30.35
Target(s): 37.50
Current Option Gain/Loss: Jan$33c: - 8.5% & Feb$35c: -11.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/28 update: Financials displayed relative weakness today. Even though Italy's debt auction was successful the yields on Italian bonds has continued to rise and that makes investors nervous about tomorrow's Italian debt auctions. Meanwhile there was a Forbes article out today suggesting that U.S. banks could lose up to $10 trillion from their European counterparts if the situation in Europe deteriorates.

Shares of JPM lost -1.1% and are back under their 100-dma. The next stop looks like the 50-dma or the $32.00 level. I am not suggesting new positions at this time.

Our multi-week target is $37.50.

- Suggested Positions -

Long 2012Jan $33 call (JPM1221A33) entry $1.05

- or -

Long February $35 call (JPM1218B35) entry $0.90

Entry on December 22 at $32.75
Earnings Date 01/13/12 (unconfirmed)
Average Daily Volume = 45.3 million
Listed on December 20, 2011


O'Reilly Automotive - ORLY - close: 80.97 change: -0.73

Stop Loss: 79.75
Target(s): 87.00
Current Option Gain/Loss: Jan$85c: -60.0% & Feb$85c: -25.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/28 update: ORLY tagged a new high this morning before fading to a -0.9% decline. Look for a dip or a bounce near $80.00 as a new bullish entry point.

Earlier Comments:
Our multi-week target is $87.00 but the $85.00 level might be round-number resistance so we'll need to stay flexible. FYI: The Point & Figure chart for ORLY is bullish with a $103 target.

- Suggested Positions -

Long Jan $85 call (ORLY1221A85) entry $0.50

- or -

Long Feb $85 call (ORLY1218B85) entry $1.60

Entry on December 27 at $82.05
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 941 thousand
Listed on December 24, 2011


Phillip Morris Intl. - PM - close: 78.51 change: -0.32

Stop Loss: 75.75
Target(s): 79.50
Current Option Gain/Loss: +243.7%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/28 update: PM could not escape the market-wide profit taking and shares lost -0.4%. I am still suggesting that readers consider an early exit now to lock in gains. We are not suggesting new positions at this time.

Earlier Comments:
FYI: The Point & Figure chart for PM is bullish with a $95 target.

- Suggested Positions -

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

12/24 new stop loss @ 75.75, adjusted target to $79.50
12/21 new stop loss @ 74.90, readers may want to take profits now (+225%)
12/17 new stop loss @ 74.25
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


TJX Companies - TJX - close: 64.84 change: -0.54

Stop Loss: 61.90
Target(s): 68.00
Current Option Gain/Loss: Jan$65c: +15.0% & Feb$65c: + 8.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/28 update: TJX couldn't get past the $65.50 level for the second day in a row. Shares eventually slipped to a -0.8% decline. We can use a dip or a bounce near $64.00 as a new entry point.

Earlier Comments:
TJX doesn't move super fast so we'll need some patience. Our target is $68.00. FYI: The Point & Figure chart for TJX is bullish with a $78 target.

- Suggested Positions -

Long 2012Jan $65 call (TJX1221A65) Entry $1.00

- or -

Long Feb $65 call (TJX1218B65) Entry $1.75

Entry on December 22 at $64.10
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on December 21, 2011


Trimble Navigation Ltd. - TRMB - close: 43.21 change: -1.39

Stop Loss: 42.70
Target(s): 49.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/28 update: TRMB underperformed the market today with a -3.1% decline. Fortunately we're still on the sidelines waiting for a breakout past resistance. I am suggesting a trigger to buy calls at $45.25 with a stop loss at $42.70. Our target is $49.50. FYI: The Point & Figure chart for TRMB is bullish with a $63 target.

Trigger @ 45.25

- Suggested Positions -

buy the Jan $45 call (TRMB1221A45)

Entry on December xx at $ xx.xx
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 544 thousand
Listed on December 22, 2011


Varian Medical Sys. - VAR - close: 65.77 change: -0.91

Stop Loss: 62.49
Target(s): 69.25
Current Option Gain/Loss: -20.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: VAR lost -1.3% today, most of that shortly after the open. Broken resistance near $65.00 should be new support. More conservative traders might want to adjust their stop loss higher.

- Suggested Positions -

Long JAN $65 call (VAR1221A65) entry $2.65

12/27/11 adjust exit target to $69.25
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


Waters Corp. - WAT - close: 73.26 change: -1.36

Stop Loss: 70.75
Target(s): 79.50
Current Option Gain/Loss: -42.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: Readers may want to give up on WAT. I am concerned with today's -1.8% decline. True, the entire market turned lower today but the action in WAT looks like a failed rally under its 20 and 30-dma. It's also a bearish reversal near the 38.2% Fibonacci retracement of its December decline.

I am not suggesting new positions at this time. Traders might want to exit early now.

- Suggested Positions -

Long Jan $75 call (WAT1221A75) entry $2.25

12/28/11 Traders may want to exit early now.

Entry on December 22 at $74.55
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 787 thousand
Listed on December 20, 2011


PUT Play Updates

BMC Software Inc. - BMC - close: 32.30 change: -0.70

Stop Loss: 34.55
Target(s): 30.05
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: BMC has fallen to new two-year lows with today's -2.1% decline. We are moving our stop loss down to $34.55.

- Suggested Positions -

Long 2012Jan $32.50 PUT (BMC1221M32.5) entry $1.05

12/28/11 new stop loss @ 34.55
12/21/11 trigger hit at $32.75

Entry on December 21 at $32.75
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 14, 2011


Watson Pharmaceuticals - WPI - close: 60.26 change: -1.11

Stop Loss: 62.55
Target(s): 56.00
Current Option Gain/Loss: Dec$60p: -12.5% & Jan$60p: -25.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: WPI continues to retreat. The stock is once again testing support near $60.00 but this time I expect it will break. We are moving our stop loss down to $62.55.

- Suggested Positions -

(December position closed 12/15/11)
DEC $60 PUT (WPI1117X60) Entry $0.80 exit $0.70 (-12.5%)

- or -

Long JAN $60 PUT (WPI1221M60) Entry $2.00

12/28/11 new stop loss @ 62.55
12/19/11 new stop loss @ 63.05
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


CLOSED BULLISH PLAYS

OpenTable, Inc. - OPEN - close: 39.58 change: -1.12

Stop Loss: 39.45
Target(s): 48.50
Current Option Gain/Loss: - 53.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: OPEN hit our stop loss at $39.45. The stock's breakdown under support near $40.00 is bearish and shares under performed today with a -2.7% loss.

Earlier Comments:
The most recent data listed short interest at 53% of the very small 16.2 million-share float. This can be a volatile stock. Our target is the simple 100-dma but we'll tentatively put our exit target at $48.50. We want to keep our position size small to limit our risk.

(small positions) - Suggested Positions -

2012Jan $45 call (OPEN1221A45) entry $1.50 exit $0.70 (-53.3%)

12/28/11 stopped out @ 39.45
12/20/11 new stop loss @ 39.45

chart:

Entry on December 20 at $41.55
Earnings Date 02/07/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 17, 2011