Editor's Note:

Shorts were on the defensive today following big gains in European markets. We have been expecting a big bounce in stocks, which is why we have been tightening our stop losses on our bearish plays.

COL, DD, GS, MCD, and RS were all stopped out.

COST and MNST were both triggered.

Current Portfolio:


CALL Play Updates

Costco Wholesale - COST - close: 87.78 change: +1.01

Stop Loss: 86.25
Target(s): 91.50
Current Option Gain/Loss: + 8.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: The stock market's widespread rally today helped push COST up through resistance. Shares closed at new four-week highs. Our trigger to buy calls was hit at $87.25.

We are adjusting our stop loss higher to $86.25

- Suggested Positions -

Long Jul $90 call (COST1221G90) Entry $1.10

06/06/12 new stop loss @ 86.25
06/06/12 triggered at $87.25

Entry on June 06 at $87.25
Earnings Date 10/03/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on June 04, 2012


Monster Beverage - MNST - close: 73.95 change: +1.12

Stop Loss: 70.75
Target(s): 79.50
Current Option Gain/Loss: - 14.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: MNST also rallied to new relative highs and hit our trigger to buy calls at $74.25. Unfortunately the stock pared its gains to close back under the $74.00 level, which is a little disappointing. I would wait for a new rally past $74.25 before considering new positions.

We are adjusting our stop loss higher to $70.75.

FYI: MNST's annual shareholder meeting is scheduled for June 8th (Friday).

- Suggested Positions -

Long Jul $80 call (MNST1221G80) Entry $1.70

06/06/12 new stop loss @ 70.75
06/06/12 triggered at $74.25

Entry on June 06 at $74.25
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on June 04, 2012


PUT Play Updates

Baxter Intl. - BAX - close: 50.36 change: +0.47

Stop Loss: 51.51
Target(s): 48.00
Current Option Gain/Loss: Jun$50p: -34.8% & Jul50p: -12.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: BAX didn't move that much in spite of the market's big bounce today. Shares merely churned sideways and eventually ended the day up +0.9%. I don't see any changes from my prior comments. If the stock was going to bounce this is a good spot for one to show up. For that reason readers may want to exit early now. I am not suggesting new positions at this time.

- Suggested Positions -

Long Jun $50 PUT (BAX1216R50) Entry $0.66

- or -

Long Jul $50 PUT (BAX1221S50) Entry $1.55

06/02/12 new stop loss @ 51.51
05/31/12 triggered at $50.95

Entry on May 31 at $50.95
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on May 29, 2012


NASDAQ OMX Group - NDAQ - close: 22.24 change: +0.38

Stop Loss: 22.55
Target(s): 20.15
Current Option Gain/Loss: -35.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/06 update: As expected the NASDAQ issued a statement today saying they are prepared to offer $40 million in restitution (cash and trading discounts) to the market makers who were "harmed" by the disastrous FB IPO. The market makers claim their losses are about $100 million.

I suspect that this news was overshadowed by the stock market's big bounce today. Shares of NDAQ have rallied past resistance near their 10-dma and the $22.00 level. This move is short-term bullish and readers may want to hit the eject button and exit immediately. We have a stop loss at $22.55 and if this bounce continues the NDAQ will likely hit our stop early tomorrow morning.

I am not suggesting new positions.

(SMALL Positions) - Suggested Positions -

Long July $21 PUT (NDAQ1221S21) Entry $0.85

Entry on June 06 at $21.95
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 3.8 million
Listed on June 05, 2012


Novartis AG - NVS - close: 52.41 change: +0.93

Stop Loss: 52.25
Target(s): 48.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
06/06 update: Big gains across European stock markets and similar gains here in the U.S. helped push NVS to a +1.8% gain. Even with this big move (for NVS) the stock underperformed the major indices.

Currently I am suggesting a trigger to buy puts at $51.00 with a stop loss at $52.25. Our first target is $48.00. FYI: The Point & Figure chart for NVS is bearish with a $41 target.

Trigger @ 51.00

- Suggested Positions -

buy the Jul $50 PUT (NVS1221S50)

Entry on June xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.75 million
Listed on June 05, 2012


CLOSED BEARISH PLAYS

Rockwell Collins Inc. - COL - close: 50.45 change: +0.08

Stop Loss: 50.55
Target(s): 45.50
Current Option Gain/Loss: -42.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: After yesterday's big bounce and close above resistance at $50.00 we should not be surprised that COL hit our stop loss at $50.55 today.

- Suggested Positions -

Jul $50 PUT (COL1221S50) Entry $2.10 exit $1.20 (-42.8%)

06/06/12 stopped out at $50.55
06/05/12 COL displays relative strength. Stock looks poised to hit our stop loss at $50.55

chart:

Entry on June 04 at $49.50
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on June 02, 2012


E.I. du Pont de Nemours - DD - close: 48.63 change: +1.29

Stop Loss: 48.51
Target(s): 44.25
Current Option Gain/Loss: -46.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: The big surge in DD is surprising. Shares gapped open higher and then rallied to a +2.7% gain. Today's move is also a bullish move above the 200-dma and what should have been resistance near $48.00. Our stop loss was hit at $48.51.

- Suggested Positions -

Jul $45 PUT (DD1221S45) Entry $1.32 exit $0.70 (-46.9%)

06/06/12 stopped out at $48.51

chart:

Entry on June 04 at $47.19
Earnings Date 07/24/12 (unconfirmed)
Average Daily Volume = 5.0 million
Listed on June 02, 2012


Goldman Sachs Group - GS - close: 94.96 change: +2.75

Stop Loss: 94.25
Target(s): 88.50
Current Option Gain/Loss: Jun$90p: -52.7% & Jul90p: -19.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: I had cautioned readers that GS looked poised to bounce back toward resistance near $95.00. Sure enough the stock rebounded to $95.07 and its simple 10-dma, both are short-term overhead resistance. The larger trend is still down but GS hit our stop loss at $94.25.

Earlier Comments:
I do consider this an aggressive, higher-risk trade. GS can be a volatile stock. FYI: The Point & Figure chart for GS is bearish with a $58 target.

- Suggested Positions - (Small Positions)

Jun $90 PUT (GS1216R90) Entry $1.80 exit $0.85 (-52.7%)

- or -

Jul $90 PUT (GS1221S90) Entry $4.25 exit $3.44 (-19.0%)

06/06/12 stopped out at $94.25
06/04/12 new stop loss 94.25
Readers may want to take profits near the $90.0 mark
05/31/12 triggered at $93.90

chart:

Entry on May 31 at $93.90
Earnings Date 07/17/12 (unconfirmed)
Average Daily Volume = 5.5 million
Listed on May 30, 2012


McDonald's Corp. - MCD - close: 88.66 change: +1.58

Stop Loss: 88.25
Target(s): 85.25
Current Option Gain/Loss: Jun$90p: -40.6% & Jul87.50P: -30.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: MCD was oversold and we've been expecting a bounce. Today's big market rebound saw MCD move into the gap down and hit our stop loss at $88.25.

- Suggested Positions -

Jun $90 PUT (MCD1216R90) Entry $3.20 exit $1.90 (-40.6%)

- or -

Jul $87.50 PUT (MCD1221S87.5) Entry $2.50 exit $1.75 (-30.0%)

06/06/12 stopped out @ 88.25
06/04/12 new stop loss @ 88.25
06/01/12 new stop loss @ 88.75
06/01/12 MCD gaps open lower at $87.47, affecting our entry price

chart:

Entry on June 01 at $87.47 (gap down)
Earnings Date 07/23/12 (unconfirmed)
Average Daily Volume = 6.1 million
Listed on May 31, 2012


Reliance Steel - RS - close: 47.67 change: +1.42

Stop Loss: 46.75
Target(s): 42.50
Current Option Gain/Loss: -42.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: Material names saw some of the biggest bounces today. RS gapped open higher at $46.67 and surged to a +3.0% gain. Our stop loss was hit at $46.75 early this morning.

- Suggested Positions -

JUN $48 PUT (RS1216R48) Entry $2.45 exit $1.40 (-42.8%)

06/06/12 stopped out at $46.75
06/04/12 new stop loss @ 46.75
06/02/12 new stop loss @ 47.75

chart:

Entry on May 23 at $47.79
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 534 thousand
Listed on May 22, 2012