Editor's Note:

Chinese stocks continue to sink and our SOHU and YOKU trades hit our exit targets.

Our CVS trade was triggered.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 78.76 change: +1.50

Stop Loss: 73.95
Target(s): 79.85
Current Option Gain/Loss: + 83.8%
Time Frame: exit prior to the July 26th earnings
New Positions: see below

Comments:
07/17/12 update: AMGN continues to show strength and the stock outperformed the market with a +1.9% gain. The stock is up three days in a row and up sharply for the month of July. I am tweaking our bullish exit target and moving it down to $79.50.

We do not want to hold over the July 26th earnings report.

- Suggested Positions -

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

07/17/12 adjust exit target to $79.50
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: 48.44 change: +0.37

Stop Loss: 46.75
Target(s): 52.00
Current Option Gain/Loss: - 6.3%
Time Frame: exit prior to the August 76th earnings
New Positions: see below

Comments:
07/17/12 update: Our new trade on CVS has been triggered. CVS broke out to new highs and hit our entry point at $48.40. I would still consider new positions now at current levels.

Earlier Comments:
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.

- Suggested Positions -

Long Aug $50 call (CVS1218H50) Entry $0.47

07/17/12 triggered @ 48.40

Entry on July 17 at $48.40
Earnings Date 08/076/12 (confirmed)
Average Daily Volume = 7.3 million
Listed on July 14, 2012


Dollar General - DG - close: 55.06 change: +0.45

Stop Loss: 53.45
Target(s): 59.50
Current Option Gain/Loss: -36.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/17/12 update: DG is slowly starting to recover. After spending three days testing short-term support near $54.00 the stock is finally starting to drift higher again. 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: 56.58 change: +1.53

Stop Loss: 52.35
Target(s): 62.00
Current Option Gain/Loss: +16.0%
Time Frame: exit prior to earnings on August 2nd
New Positions: see below

Comments:
07/17/12 update: WLK displayed some relative strength with a bullish breakout past short-term resistance near $56.00. The stock outperformed the market with a +2.7% gain. The next hurdle for the bulls is the simple 100-dma near $57.65.

- 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: 18.51 change: +0.18

Stop Loss: 19.45
Target(s): 17.05
Current Option Gain/Loss: Jul20p: +42.1% & Aug19p: +30.7%
Time Frame: exit prior to the late July earnings report
New Positions: see below

Comments:
07/17/12 update: Today proved to be a big disappointment. Last night the company issued an earnings warning. We were expecting a big spike down toward $17 and beyond. Instead shares only spike down to $17.99 and then bounce. That's not a good sign if traders are buying this bad news.

Readers may want to exit early now. I am not suggesting new positions at this time.

NOTE: The July $20 puts still have an outrageous bid/ask spread. With only three days left on these puts I am suggesting we exit the July $20 puts at the opening bell tomorrow!
(current spread $1.35/2.30)

- Suggested Positions -

Long Jul $20 PUT (FLIR1221S20) Entry $0.95

- or -

Long Aug $19 PUT (FLIR1218T19) Entry $0.65

07/17/12 prepare to exit the July $20 puts at the open tomorrow
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 07/26/12 (confirmed)
Average Daily Volume = 1.7 million
Listed on June 30, 2012


Fossil, Inc. - FOSL - close: 66.66 change: +0.33

Stop Loss: 70.05
Target(s): 60.50
Current Option Gain/Loss: -19.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/17/12 update: FOSL is still drifting sideways although it's doing so under short-term resistance at its 10-dma. I am not suggesting new positions tonight.

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: 50.50 change: +0.05

Stop Loss: 51.65
Target(s): 45.50
Current Option Gain/Loss: -39.4%
Time Frame: exit prior to the July 24th earnings report
New Positions: see below

Comments:
07/17/12 update: Today's performance in ITW looked a lot like Monday's and Friday's move. It had the same morning weakness and the same all-day drift higher. Traders are buying the dips near round-number support at $50.00. Today's low was $49.88. Readers may want to wait for a new drop under $49.75 to open 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: 19.25 change: -0.33

Stop Loss: 21.35
Target(s): 19.50, 15.50
Current Option Gain/Loss: +55.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/17/12 update: JCP continues to sink and underperformed the market with a -1.6% decline. This is a new multi-year closing low for JCP. Readers may want to start tightening their stop loss. Our second target is $15.50.

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


Joy Global, Inc. - JOY - close: 49.13 change: -1.46

Stop Loss: 51.05
Target(s): 45.25 and 41.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
07/17/12 update: We are not making any progress with JOY. The stock is chopping sideways in the $48-51 zone.

Currently the plan is to launch positions with a trigger to buy puts at $48.49. If triggered we will aim for two different targets. Cautious traders can aim for $45.25. More aggressive traders can aim for $41.50. FYI: The Point & Figure chart for JOY is bearish with a $37 target.

Trigger @ 48.49

- Suggested Positions -

buy the Aug $48 PUT (JOY1218T48)

Entry on July xx at $ xx.xx
Earnings Date 08/29/12 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on July 16, 2012


Tractor Supply Co. - TSCO - close: 78.57 change: -2.02

Stop Loss: 84.15
Target(s): 76.00
Current Option Gain/Loss: +25.7%
Time Frame: exit prior to the July 25th earnings
New Positions: see below

Comments:
07/17/12 update: TSCO continues to follow the path of least resistance. Shares underperformed with a -2.5% decline. The stock actually set a new relative low under last week's dip. Readers may want to start lowering their stop losses.

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: 49.72 change: +0.80

Stop Loss: 50.05
Target(s): 44.00 & 41.00
Current Option Gain/Loss: -54.0%
Time Frame: exit prior to the July 27th earnings report
New Positions: see below

Comments:
07/17/12 update: WBC is not cooperating. The stock remains under resistance at the $50.00 level but shares look like they are building up steam for a move higher. Readers may want to exit early. I am not suggesting new positions at this time.

We have two targets. Our first target at $44.00 and our second target at $41.00.

- Suggested Positions -

Long Aug $45 put (WBC1218T45) Entry $1.85

07/17/12 WBC is not cooperating. Readers may want to consider an early exit
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


CLOSED BEARISH PLAYS

Sohu.com Inc. - SOHU - close: 35.69 change: -1.54

Stop Loss: 41.75
Target(s): 35.25
Current Option Gain/Loss: July40p: +189.6% & Aug37.50p: +94.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/17/12 update: Target achieved.

SOHU continues to accelerate lower and shares hit our exit target at $35.25.

NOTE: We had already planned to exit our July $40 puts at the open this morning.

*Small Positions* - Suggested Positions -

Jul $40 PUT (SOHU1221S40) entry $1.45 exit $4.20 (+189.6%) @ the open

- or -

Aug $37.50 PUT (SOHU1218T37.5) entry $1.85 exit $3.60 (+94.5%)

07/17/12 target hit @ 35.25
07/17/12 exited July $40 put this morning at the open
07/16/12 prepare to exit the July $40 puts at the open tomorrow morning
07/11/12 triggered @ 39.65

chart:

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


Youku Inc. - YOKU - close: 16.03 change: -1.98

Stop Loss: 21.25
Target(s): 16.00
Current Option Gain/Loss: +119.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/17/12 update: Target achieved.

YOKU really accelerated lower today with a -10.9% drop. Shares hit our exit target at $16.00 this afternoon.

*Small Positions* - Suggested Positions -

Aug $19 PUT (YOKU1218T19) Entry $1.55 exit $3.40 (+119.3%)

07/17/12 target hit at $16.00
07/10/12 triggered @ 19.90

chart:

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