Editor's Note:

The U.S. market delivered a very lackluster reaction to news that Europe was giving Greece another bailout.

We did see our CAT and ROK plays triggered. We had plans to exit our DLTR trade today.

Current Portfolio:


CALL Play Updates

BorgWarner Inc. - BWA - close: 81.21 change: -0.70

Stop Loss: 78.75
Target(s): 89.00
Current Option Gain/Loss: -64.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21 update: BWA underperformed on Tuesday but traders did buy the dip twice near round-number support at the $80.00 level. A bounce from current levels can be used as a new bullish entry point.

Earlier Comments:
A breakout would mean new record highs and could produce a some short covering in BWA. The most recent data listed short interest at 14% of the 108 million share float. FYI: The Point & Figure chart for BWA is bullish with a $108 target.

- Suggested Positions -

Long Mar $85 call (BWA1217C85) Entry $1.55

02/17/12 trade opened on BWA's gap open higher at $82.49

Entry on February 17 at $82.49
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on February 16, 2012


Caterpillar, Inc. - CAT - close: 115.00 change: +1.05

Stop Loss: 111.95
Target(s): 119.75
Current Option Gain/Loss: -14.7%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/21 update: Our new play on CAT is open but I am urging some caution here. Shares opened at $114.50, rallied to $116.44 intraday, and then pulled back to the $115.00 level. CAT closed up +0.9% but the intraday pull back almost looks like a bull trap pattern. Readers may want to wait to see if there is any follow through on today's gain before considering new bullish positions.

FYI: You'll notice that today's high could also be considered a failed rally at the 2011 high near $116.50.

The Point & Figure chart for CAT is bullish with a $165 target.

- Suggested Positions -

Long Mar $120 call (CAT1217C120) Entry $1.15

Entry on February 21 at $115.25
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 7.5 million
Listed on February 14, 2012


Capital One Financial - COF - close: 48.66 change: -0.17

Stop Loss: 47.75
Target(s): 54.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/21 update: COF spent Tuesday's session churning sideways between $49.00 overhead and the 10-dma below. Currently we're waiting for shares to breakout past resistance near $50.00. I am suggesting a trigger to buy calls at $50.25. We want to keep our position size small to limit our risk. Our multi-week exit target is $54.75.

Trigger @ $50.25 (small positions)

- Suggested Positions -

buy the Mar $50 call (COF1217C50)

Entry on February xx at $ xx.xx
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 6.4 million
Listed on February 15, 2012


Eastman Chemical Co. - EMN - close: 54.39 change: -0.22

Stop Loss: 53.25
Target(s): 59.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/21 update: The intraday bounce in EMN almost made it to $55.00 before fading lower. Shares didn't see that much profit taking so I don't see any changes from my weekend comments.

I am suggesting a trigger to open small bullish positions at $55.05 with a stop loss at $53.25. Our target is $59.00. More conservative traders may want to wait for EMN to trade past its all-time high of $55.36 (set in 2011) before initiating positions. FYI: The Point & Figure chart for EMN is bullish with a long-term $91 target.

Trigger @ $55.05

- Suggested Positions -

buy the Mar $55 call (EMN1217C55)

Entry on February xx at $ xx.xx
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on February 18, 2012


Jones Lang LaSalle - JLL - close: 81.97 change: -1.07

Stop Loss: 79.95
Target(s): 89.50
Current Option Gain/Loss: -47.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21 update: The stock market's afternoon slide pulled JLL down to a -1.2% decline. Shares should find support near $80.00 and nimble traders could buy calls on a dip or a near the $80 level. FYI: The Point & Figure chart for JLL is bullish with a $105 target.

- Suggested Positions -

Long Mar $85 call (JLL1217C85) Entry $2.40

Entry on February 17 at $83.75
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 518 thousand
Listed on February 16, 2012


3M Co. - MMM - close: 87.60 change: +0.04

Stop Loss: 86.45
Target(s): 94.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
02/21 update: MMM eked out a very small gain but shares remain inside its sideways trading range. News that MMM was teaming up with CHK to design compressed natural gas tanks didn't have much impact on the share price.

Currently I am suggesting a trigger to buy calls when MMM trades at $88.50 or higher. More conservative traders may want to wait for MMM to actually close over $88.50 before considering bullish positions.

Earlier Comments:
The $90 level could be round-number resistance but we're setting our exit target at $94.00. FYI: The Point & Figure chart for MMM is bullish with a $109 target.

Breakout Trigger (buy calls) @ $88.50

- Suggested Positions -

buy the MAR $90 call (MMM1217C90)

02/09/12 removed the February call.

Entry on February xx at $ xx.xx
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on February 07, 2012


Rockwell Automation - ROK - close: 83.51 change: +1.21

Stop Loss: 79.90
Target(s): 89.50
Current Option Gain/Loss: -16.1%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/21 update: ROK continues to show relative strength. The stock gapped open higher at $82.66 and quickly hit our trigger to buy calls at $82.75. The intraday high was $83.85. The next level of significant resistance should be the $90 area. Our exit target is $89.50. FYI: The Point & Figure chart for ROK is bullish with a $95 target.

- Suggested Positions -

Long Mar $85 call (ROK1217C85) Entry $1.55

Entry on February 21 at $82.75
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on February 18, 2012


Sherwin-Williams - SHW - close: 100.58 change: +0.26

Stop Loss: 97.45
Target(s): 104.75
Current Option Gain/Loss: - 7.1%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
02/21 update: SHW is also showing relative strength. The stock hit another new record high (this time at $101.39). Traders bought the dip near $100.00 this afternoon, which is a good sign.

- Suggested Positions -

Long Mar $100 call (SHW1217C100) Entry $2.10

Entry on February xx at $ xx.xx
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on February 14, 2012


S&P Oil ETF - XES - close: 38.65 change: -0.02

Stop Loss: 36.90
Target(s): 43.00
Current Option Gain/Loss:(Feb37c: -48.1%) & Mar36c: + 4.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/21 update: News that Iran was cutting oil exports to certain Western nations helped push oil prices higher today. Yet this strength did not translate to widespread gains in the oil sector. Oil stocks did trend higher but some issues saw some profit taking. The XES tried to rally past resistance near $39.00 all day and eventually faded to a minor decline.

Earlier Comments:
The option spreads on the XES a bit wide, which makes this a higher-risk trade. I am suggesting we keep our position size small to limit our risk. Our multi-week exit target is $43.00.

(small positions) - Suggested Positions -

Long Mar $36 call (XES1217C36) Entry $2.45

02/18/12 new stop loss @ $36.90
02/14/12 exited Feb. calls at the close: bid @ $0.70 (-48.1%)
02/13/12 prepare to exit our Feb. $37 calls at the closing bell tomorrow.

Entry on February 06 at $37.75
Earnings Date --/--/--
Average Daily Volume = 177 thousand
Listed on February 04, 2012


Oil & Gas Exploration ETF - XOP - close: 60.93 change: +0.41

Stop Loss: 56.45
Target(s): 63.00
Current Option Gain/Loss: Mar$60c: +35.2% & Jun$60c: +17.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/21 update: The XOP was showing a bit more strength than its XES rival. Shares inched to new relative highs. This ETF continues to look overbought. Don't be surprised to see a dip near its rising 10-dma. FYI: The Point & Figure chart for XOP is bullish with a $74 target.

- Suggested Positions -

Long Mar $60 call (XOP1217C60) Entry $1.70

- or -

Long Jun $60 call (XOP1216F60) Entry $4.10

Entry on February 14 at $58.75
Earnings Date --/--/--
Average Daily Volume = 3.8 million
Listed on February 13, 2012


PUT Play Updates

Currently we do not have any active put trades.


CLOSED BULLISH PLAYS

Dollar Tree - DLTR - close: 88.01 change: -1.34

Stop Loss: 86.95
Target(s): 90.00
Current Option Gain/Loss:(Feb$87.5c:+130.0%) & Mar$87.5c: +23.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21 update: DLTR came very close to hitting our new exit target. Over the weekend I adjusted our exit price to $90.00. DLTR gapped open higher at $89.91 but topped out at $89.98. Kudos if you were quick enough to exit in the first 15 minutes of trading this morning. DLTR began to reverse and closed down -1.5%. We had planned to exit positions at the closing bell if DLTR didn't hit $90.00 today. Earnings are out tomorrow. FYI: The option opened with a bid of $3.45 (+50%). DL

(small positions) - Suggested Positions -

Mar $87.50 call (DLTR1217C87.5) entry $2.30 exit $2.85 (+23.9%)

02/21/12 scheduled exit!
02/18/12 prepare to exit on Tuesday. new stop loss @ 86.95. New exit target at $90.00, or exit at the closing bell
02/14/12 scheduled close for the Feb. $87.50 calls at the closing bell tonight. bid on the call option was $1.15 (+130%).
02/13/12 prepare to exit our Feb. calls at the close tomorrow
02/09/12 trade opened
02/04/12 Only open small (half-sized) positions if DLTR hits our entry point at $86.75

chart:

Entry on February 09 at $86.75
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on February 02, 2012