Editor's Note:

Stocks failed to see much follow through on Friday's oversold bounce.

Our ATHN and WTW trades have been stopped out.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 77.27 change: +0.31

Stop Loss: 73.95
Target(s): 79.85
Current Option Gain/Loss: + 19.7%
Time Frame: exit prior to the July 26th earnings
New Positions: see below

Comments:
07/16/12 update: AMGN continues to flex some relative strength muscle. Shares hit another high and closed up +0.39%. I am not suggesting new positions at this time but nimble traders could try and buy calls on a dip near likely support near $75.00 or the 10-dma. We do not want to hold over the July 26th earnings report.

- Suggested Positions -

Long Aug $77.50 call (AMGN1218H77.5) Entry $1.42

07/13/12 triggered @ 76.35

Entry on July 13 at $76.35
Earnings Date 07/26/12 (confirmed)
Average Daily Volume = 5.3 million
Listed on July 12, 2012


CVS Caremark Corp. - CVS - close: 48.07 change: +0.02

Stop Loss: 46.75
Target(s): 52.00
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the August 76th earnings
New Positions: Yes, see below

Comments:
07/16/12 update: CVS tried to rally at midday but it couldn't get past the $48.30 level. Overall the stock held up reasonably well considering the market's weakness.

I am suggesting a trigger to open bullish positions at $48.40. We'll start with a stop loss at $46.75. It is possible that the $50.00 level could be round-number, psychological resistance but we are going to aim for the $52.00 mark. Just remember to exit prior to the August 7th earnings report.

Trigger @ $48.40

- Suggested Positions -

buy the Aug $50 call (CVS1218H50)

Entry on July xx at $ xx.xx
Earnings Date 08/076/12 (confirmed)
Average Daily Volume = 7.3 million
Listed on July 14, 2012


Dollar General - DG - close: 54.61 change: +0.08

Stop Loss: 53.45
Target(s): 59.50
Current Option Gain/Loss: -41.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/16/12 update: DG continues to churn sideways between short-term support near $54.00 and short-term resistance near $55.00. Readers may want to raise their stop loss toward the $54.00 level. I'm not suggesting new positions at this time.

- Suggested Positions -

long Aug $55 call (DG1218H55) Entry $2.05

07/14/12 looking at DG's performance this past week, the breakout to new highs looks like a bull trap. readers may want to exit early

Entry on July 11 at $55.51
Earnings Date 08/30/12 (unconfirmed)
Average Daily Volume = 3.8 million
Listed on July 10, 2012


Westlake Chemical Corp. - WLK - close: 55.15 change: 0.07

Stop Loss: 52.35
Target(s): 62.00
Current Option Gain/Loss: -15.1%
Time Frame: exit prior to earnings on August 2nd
New Positions: see below

Comments:
07/16/12 update: Monday proved to be a quiet day for WLK with the stock consolidating sideways. Considering the market's weakness today, readers may want to wait for WLK to trade over $55.50 before launching positions.

- Suggested Positions -

Long Aug $60 call (WLK1218H60) Entry $1.12

07/13/12 trade triggered @ 54.55
07/12/12 adjusted the trigger to buy calls to $54.55, stop to 52.35
07/11/12 removed the July option

Entry on July 13 at $54.55
Earnings Date 07/31/12 (unconfirmed)
Average Daily Volume = 543 thousand
Listed on July 09, 2012


PUT Play Updates

FLIR Systems - FLIR - close: 18.33 change: -0.44

Stop Loss: 19.45
Target(s): 17.05
Current Option Gain/Loss: Jul20p: +??.?% & Aug19p: +53.8%
Time Frame: exit prior to the late July earnings report
New Positions: see below

Comments:
07/16/12 update: STRATEGY CHANGE!

We have been aiming for $17.75. After tonight's headline we are adjusting our exit target down to $17.05. After the closing bell tonight FLIR issued an earnings warning. They now expect Q2 EPS in the 30-cent range versus Wall Street's estimates at 36 cents. Revenues are expected to come in at $336 million instead of estimates at $380 million.

Odds are good that FLIR will gap open lower tomorrow. Our new exit target is $17.05.

??? Unfortunately, we're still getting a really, ridiculously wide spread on the July $20 put. Readers may want to use a limit order to exit instead of a market order. You might try a limit order to exit in the $2.25-2.75 area. There is no guarantee you'll get it but it's worth a shot.

- Suggested Positions -

Long Jul $20 PUT (FLIR1221S20) Entry $0.95

- or -

Long Aug $19 PUT (FLIR1218T19) Entry $0.65

07/16/12 Exit Strategy Change: New Target: 17.05
after the bell tonight FLIR issued an earnings warning.
*07/14/12 can't get a good quote on the July 20 put. This is an estimate.
07/12/12 new stop loss @ 19.45
07/11/12 odd bid/ask spread on the July $20 puts affecting our P/L.

Entry on July 02 at $19.56
Earnings Date 07/20/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on June 30, 2012


Fossil, Inc. - FOSL - close: 66.33 change: -1.65

Stop Loss: 70.05
Target(s): 60.50
Current Option Gain/Loss: - 9.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/16/12 update: Good news! FOSL virtually erased Friday's gain with today's $1.65 drop. The intraday bounce attempt failed near $68.00. Readers can use today's move as a new bearish entry point.

FYI: The Point & Figure chart for FOSL is bearish with a $54 target.

- Suggested Positions -

Long Aug $60 PUT (FOSL1218T60) Entry $2.60
07/12/12 FOSL has produced a one-day bullish reversal pattern.

Entry on July 11 at $65.99
Earnings Date 08/07/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on July 10, 2012


Illinois Tool Works - ITW - close: 50.45 change: -0.30

Stop Loss: 51.65
Target(s): 45.50
Current Option Gain/Loss: -34.2%
Time Frame: exit prior to the July 24th earnings report
New Positions: see below

Comments:
07/16/12 update: There was no follow through on the recent bounce in ITW yet shares remain above the $50.00 mark. Readers may want to wait for a new drop below $50.00 before initiating new bearish positions. Our target is $45.50 but we'll plan to exit prior to the July 24th earnings report.

- Suggested Positions -

Long Aug $50 PUT (ITW1218T50) Entry $1.90

07/12/12 triggered @ 49.75

Entry on July 12 at $49.75
Earnings Date 07/24/12 (confirmed)
Average Daily Volume = 3.4 million
Listed on July 11, 2012


J.C.Penney Co. - JCP - close: 19.58 change: -0.44

Stop Loss: 21.35
Target(s): 19.50, 15.50
Current Option Gain/Loss: +47.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/16/12 update: JCP hit our first target at $19.50 again. We have two exit targets on this trade. The first target is $19.50. The second is $15.50. JCP hit our first target of $19.50 on Thursday, July 12th and again today. The close under $20.00 is technically bearish.

FYI: The Point & Figure chart for JCP is bearish with a $7.00 target.

- Suggested Positions -

Long Aug $20 PUT (JCP1218T20) Entry $1.20

07/16/12 If you missed it the first time JCP hit our 1st target at $19.50 again.
07/12/12 new stop loss @ 21.35
1st target hit at $19.50, option bid @ $1.75 (+45.8%)
07/10/12 triggered @ 21.30

Entry on July 10 at $21.30
Earnings Date 08/08/12 (unconfirmed)
Average Daily Volume = 9.3 million
Listed on July 03, 2012


Sohu.com Inc. - SOHU - close: 37.23 change: -1.76

Stop Loss: 41.75
Target(s): 35.25
Current Option Gain/Loss: July40p: +93.1% & Aug37.50p: +48.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/16/12 update: SOHU is underperforming the market with a -4.5% plunge today. The stock closed a new multi-year lows. Readers may want to start moving their stops closer to the $40.00 level, which should be resistance.

Please note that July options expire in just four days (after Friday), so we want to go ahead and take profits in our July $40 puts at the open tomorrow morning. Current bid is $2.80 (+93%).

We will want to keep our position size small to limit our risk because the most recent data listed short interest at 23% of the small 29.6 million-share float. FYI: The Point & Figure chart for SOHU is bearish with a $32 target.

*Small Positions* - Suggested Positions -

(July options expire after July 20th)
Long Jul $40 PUT (SOHU1221S40) entry $1.45

- or -

Long Aug $37.50 PUT (SOHU1218T37.5) entry $1.85

07/16/12 prepare to exit the July $40 puts at the open tomorrow morning
07/11/12 triggered @ 39.65

Entry on July 11 at $39.65
Earnings Date 07/30/12 (unconfirmed)
Average Daily Volume = 634 thousand
Listed on July 09, 2012


Tractor Supply Co. - TSCO - close: 80.59 change: -0.42

Stop Loss: 84.15
Target(s): 76.00
Current Option Gain/Loss: + 2.8%
Time Frame: exit prior to the July 25th earnings
New Positions: see below

Comments:
07/16/12 update: So far so good. TSCO bounced up to retested overhead resistance at its 200-dma again before rolling over. I would still consider new bearish positions now at current levels.

Our target is $76.00. Bear in mind that this is going to be a short-term trade. We want to exit prior to the July 25th earnings report. FYI: The Point & Figure chart for TSCO is bearish with a $70 target.

- Suggested Positions -

Long Aug $80 PUT (TSCO1218T80) Entry $3.50

Entry on July 16 at $81.14
Earnings Date 07/25/12 (confirmed)
Average Daily Volume = 1.0 million
Listed on July 14, 2012


WABCO Holdings - WBC - close: 48.92 change: -0.51

Stop Loss: 50.05
Target(s): 44.00 & 41.00
Current Option Gain/Loss: -43.2%
Time Frame: exit prior to the July 27th earnings report
New Positions: see below

Comments:
07/16/12 update: The intraday bounce attempt in WBC appears to be failing. Readers can choose to risk buying puts on a bounce near resistance at $50.00 or wait for a new drop under $48.00.

We'll set our first target at $44.00 and our second target at $41.00.

- Suggested Positions -

Long Aug $45 put (WBC1218T45) Entry $1.85

07/12/12 triggered at $47.40

Entry on July 12 at $47.40
Earnings Date 07/27/12 (confirmed)
Average Daily Volume = 648 thousand
Listed on July 11, 2012


Youku Inc. - YOKU - close: 18.01 change: -0.91

Stop Loss: 21.25
Target(s): 16.00
Current Option Gain/Loss: +38.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/16/12 update: YOKU plunged at the open and spent the rest of the day drifting sideways near the $18.00 level. Shares settled with a -4.8% drop. Readers may want to adjust their stop loss closer to the $20 level. A failed rally near $20 or the 10-dma can be used as a new bearish entry point.

FYI: We want to keep our position size small because YOKU already has a high amount of short interest. The most recent data listed short interest at almost 19% of the 50.2 million share float and that raises the risk of a short squeeze higher.

*Small Positions* - Suggested Positions -

Long Aug $19 PUT (YOKU1218T19) Entry $1.55

07/10/12 triggered @ 19.90

Entry on July 10 at $19.90
Earnings Date 08/08/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on July 02, 2012


CLOSED BULLISH PLAYS

Athenahealth, Inc. - ATHN - close: 80.38 change: -1.46

Stop Loss: 79.85
Target(s): 89.00
Current Option Gain/Loss: -67.5%
Time Frame: exit prior to earnings on July 19th
New Positions: see below

Comments:
07/16/12 update: I didn't see any specific news behind the relative weakness in ATHN this morning. Shares initially popped higher and then plunged. The drop pushed shares under support near $80.00 and hit our stop loss at $79.85.

- Suggested Positions -

Jul $85 call (ATHN1221G85) Entry $2.00 exit $0.65 (-67.5%)

07/16/12 stopped out at 79.85
07/14/12 remember, we want to exit prior to earnings on the 19th
07/03/12 new stop loss @ 79.85

chart:

Entry on July 03 at $81.51
Earnings Date 07/19/12 (confirmed)
Average Daily Volume = 481 thousand
Listed on July 02, 2012


CLOSED BEARISH PLAYS

Weight Watchers Intl. - WTW - close: 50.74 change: +1.10

Stop Loss: 50.75
Target(s): 42.00
Current Option Gain/Loss: Jul47.50p: - 100% & Aug45p: -45.2%
Time Frame: exit prior to the early August earnings report
New Positions: see below

Comments:
07/16/12 update: WTW initially turned lower failing at resistance near $50.00. Then suddenly about an hour into trade the stock reversed sharply higher and soared past the $50 mark to close up +2.2%. I could not find any news to account for this sudden bullish reversal higher. Our stop loss was hit at $50.75.

- Suggested Positions -

Jul $47.50 PUT (WTW1221S47.5) Entry $1.10 exit $0.00 (- 100%)

- or -

Aug $45 PUT (WTW1218T45) Entry $2.01 exit $1.10 (-45.2%)

07/16/12 stopped out at $50.75

chart:

Entry on July 09 at $48.28
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 764 thousand
Listed on July 07, 2012