Editor's Note:

After five weeks of gains the market looks like it could be running out of gas. Monday saw widespread declines but overall the selling was mild.

DLTR and AKAM were closed as planned. I have removed PPG as a candidate. Both EW and IWM were triggered.

Current Portfolio:


CALL Play Updates

BRCM - Broadcom - close: 35.11 change: -0.24

Stop Loss: 33.25
Target(s): 38.50
Current Option Gain/Loss: + 0.3%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/13/12 update: After Friday's big gain in BRCM shares consolidated sideways. The stock did test and bounce at the 150-dma. I don't see any changes from my prior comments. The next challenge for the bulls could be the mid June peak at $35.54 and then the $36.00 level, which was support back in late April. I am not suggesting new positions at this time.

- Suggested Positions -

Position: Nov $36.00 Call (BRCM1217K36) entry $1.80

08/08/12 new stop loss @ 33.25
no follow through, turning cautious
08/07/12 triggered @ $34.75
08/06/12 adjust stop loss to $32.45

Entry on August 07 at $34.75
Average Daily Volume = 10 million
Earnings Oct-23rd
Listed on Aug 4, 2012


Caterpillar - CAT - close: 88.61 change: -0.33

Stop Loss: 85.90
Target(s): 91.50
Current Option Gain/Loss: + 6.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/13/12 update: CAT was initially higher this morning but shares succumbed to the market pressure and followed the market lower midday. The stock rebounded higher back into the close but never made it back to positive territory again. I suspect there is a growing chance that CAT might dip toward short-term technical support at its rising 10-dma. Just in case the 10-dma does not hold we are raising our stop loss up to $85.90. I am not suggesting new positions at current levels.

Earlier Comments:
I do consider this somewhat aggressive. CAT's recent earnings were strong and the company raised guidance but its stock price is probably still vulnerable to negative economic headlines. Furthermore the $90.00 level might be round-number resistance.

- Suggested (SMALL) Positions -

Long Sep $90 call (CAT1222I90) Entry $1.90

08/13/12 new stop loss @ 85.90
08/07/12 triggered @ $87.25

Entry on August 07 at $87.25
Average Daily Volume = 8.6 million
Listed on August 6, 2012


Celgene Corp. - CELG - close: 71.85 change: -0.09

Stop Loss: 69.90
Target(s): 75.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/13/12 update: Looking at the intraday chart is seems like CELG hit $72.16 this morning but according to my quote service the high today was only $71.94. CELG did manage to bounce off its late morning lows and closed almost unchanged on the session. We are still waiting for a bullish breakout higher. I am suggesting a trigger to buy calls at $72.25. Our target is $75.75.

FYI: The Point & Figure chart for CELG is bullish with an $81 target.

Trigger @ 72.25

- Suggested Positions -

buy the Sep $75 call (CELG1222I75)

Entry on August xx at $ xx.xx
Average Daily Volume = 3.4 million
Listed on August 7, 2012


Qualcomm - QCOM - close: 62.10 change: +0.12

Stop Loss: 57.75
Target(s): 64.50
Current Option Gain/Loss: +22.9%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/13/12 update: QCOM still managed to show a little relative strength today with a +0.19% gain. Traders bought the dip again this morning. In spite of today's strength the best bet for new entries is probably a dip into the $61.00 area. More conservative traders may want to start adjusting their stop loss higher.

- Suggested Positions -

Position: Oct $62.50 Call (QCOM1222J62.5) entry $1.70

08/07/12 triggered @ 60.51

Entry on August 07 at $60.51
Average Daily Volume = 1.5 million
Listed on Aug 4, 2012


SBA Communications - SBAC - close: 60.41 change: +0.12

Stop Loss: 57.75
Target(s): 64.90
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
08/13/12 update: SBAC is still pacing sideways in the $59.50-60.50 zone. We are waiting for a breakout higher.

I am suggesting a trigger to buy calls at $60.75 with a stop loss at $57.75. Our multi-week target is $64.90. We might need some patience on this one. SBAC doesn't move super fast. FYI: The Point & Figure chart for SBAC is bullish with a long-term $100 target.

Trigger @ 60.75

- Suggested Positions -

buy the Sep $60 call (SBAC1222i60)

- or -

buy the Dec $65 call (SBAC1222L65)

Entry on August xx at $ xx.xx
Average Daily Volume = 1.5 million
Listed on August 11, 2012


WellPoint Inc. - WLP - close: 56.89 change: -1.02

Stop Loss: 54.40
Target(s): 59.75
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/13/12 update: Some of the healthcare-related stocks dropped this morning as investors reacted to the Paul Ryan pick as Romney's VP. The market has yet to figure out if Ryan, should the republicans win, will help or hurt the healthcare stocks. The selling stalled by lunchtime and WLP was basing sideways the rest of the day.

I am not suggesting new positions at this time.

- Suggested Positions -

Long Sep $57.50 call (WLP1222I57.5) Entry $1.60

08/08/12 triggered @ 56.50

Entry on August 08 at $56.50
Average Daily Volume = 4.4 million
Listed on August 7, 2012


PUT Play Updates

Edwards Lifesciences - EW - close: 97.86 change: -0.31

Stop Loss: 100.25
Target(s): 91.50
Current Option Gain/Loss: -14.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/13/12 update: Our EW trade is open. The plan was to buy puts at $97.75 but EW actually gapped open lower at $97.66. Shares spiked down to $96.36 before bouncing back.

The intraday rebound higher is a bit concerning. Readers may want to wait for a new failed rally near the 50-dma (resistance) or wait for a new drop under $97.50 before initiating new bearish positions. FYI: The Point & Figure chart for EW is bearish with an $86 target.

- Suggested Positions -

Long Sep $95 PUT (EW1222u95) Entry $2.70

08/13/12 trade opened on gap down at $97.66 (trigger was 97.75)

Entry on August 13 at $97.66
Average Daily Volume = 950 thousand
Listed on August 9, 2012


FB - Facebook - close: 21.60 change: -0.21

Stop Loss: 23.25
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: -34.4%
New Positions: see below

Comments:
08/13/12 update: FB tried to rally this morning but shares quickly fell back below the $22 level and spent the rest of the day drifting sideways. The next stock lock-up expiration is this week (looks like Aug. 15th). We are expecting increased selling pressure on the 16th and beyond with 270 million new shares available to sell.

Earlier Comments:
Facebook has turned into the stock everyone loves to hate. Facebook has 674 million shares outstanding as of Friday. On August 15th another 268 million shares will see their lockup expire and become available for trading. That is 40% additional shares. If you were an investor or employee and you watched your shares decline from $35 to $20 ahead of your lockup expiration you are probably just waiting for an opportunity to sell. Another factor is that taxes are due on the awarded shares regardless of whether they are sold. That means employees have a big tax bill and they have not been able to sell those shares to pay the taxes. That is an additional incentive to pull the trigger on at least part of their position on August 15th.

Facebook has hundreds of detractors and they seem to be racing each other trying to put a lower price target on the stock. Mark Hulbert was on CNBC on Friday with a $13.80 price target based on a bunch of different metrics.

Facebook also has the various lawsuits over the IPO including the valuation and the various claims made about users and revenue in the days leading up to the IPO. There are plenty of clouds and no real catalysts to pump up the stock.

Facebook said expenses grew by 60% in Q2 and they would grow faster in Q3/Q4. That means earnings will decline.

I am recommending a September option with plans to exit (some time) after the August 15th share lock up expiration.

Suggested Positions

current position: Sept $20 PUT (FB1220U20) entry $1.45

08/07/12 triggered @ 20.95
08/06/12 adjust entry trigger to $20.95

Entry on August 07 at $20.95
Average Daily Volume = 80.0 million
Listed on August 5, 2012


iShares Russell 2000 ETF - IWM - close: 79.79 change: -0.13

Stop Loss: 80.75
Target(s): 76.50
Time Frame: 3-5 weeks
Current Option Gain/Loss: -11.9%
New Positions: see below

Comments:
08/13/12 update: Our IWM trade is finally open. The small cap ETF fell to $78.89 (near the 10-dma and 100-dma) before bouncing back. The sharp intraday rebound higher is troubling if you're bearish. Our trade opened at $79.40 but I am not suggesting new positions at this time.

We wanted to keep our position size small to limit our risk.

- Suggested (SMALL) Positions -

Long Oct $78 PUT (IWM1220V78) Entry $2.60

08/13/12 triggered @ 79.40
08/08/12 Adjust entry/stop/exit
Use a trigger @ 79.40, stop @ 80.75, target 76.50. Small Positions Only!
08/07/12 adjust trigger to buy puts up to $78.90

Entry on August 13 at $79.40
Average Daily Volume = 60.0 million
Listed on August 5, 2012


O'Reilly Automotive - ORLY - close: 84.95 change: +0.33

Stop Loss: 84.75
Target(s): 80.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/13/12 update: Surprisingly ORLY was showing relative strength on Monday. The stock closed up +0.3% but it failed to breakout over short-term resistance at its 10-dma today. I don't see any changes from my weekend comments.

I am suggesting a trigger to launch bearish positions at $83.75. Our first target is $80.25. More aggressive traders may want to aim lower. FYI: The Point & Figure chart for ORLY is bearish with a long-term $48 target.

Trigger @ 83.75

- Suggested Positions -

buy the Sept $80 PUT (ORLY1222u80)

Entry on August xx at $ xx.xx
Average Daily Volume = 1.5 million
Listed on August 11, 2012


Vornado Realty Trust - VNO - close: 80.76 change: +0.87

Stop Loss: 80.55
Target(s): 72.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Comments:
08/13/12 update: VNO was showing relative strength today as the stock bounced from support. If shares close over the $81.00 level we might drop it as a bearish candidate. Currently we are waiting for a breakdown to new relative lows.

I am suggesting a trigger to open bearish positions at $78.45. Our target is $72.50 but keep in mind that the $75.00 level might be round-number support. FYI: The Point & Figure chart for VNO is bearish with a $74 target.

Trigger @ 78.45

- Suggested Positions -

buy the Sep $75 PUT (VNO1222u75)

Entry on August xx at $ xx.xx
Average Daily Volume = 943 thousand
Listed on August 9, 2012


CLOSED BULLISH PLAYS

Dollar Tree - DLTR - close: 50.15 change: -0.57

Stop Loss: 49.45
Target(s): 54.50
Current Option Gain/Loss: -34.2%
Time Frame: exit prior to earnings on Aug. 16th
New Positions: see below

Comments:
08/13/12 update: Over the weekend we decided that the short-term reversal in DLTR looked too bearish. I suggested everyone exit at the open on Monday morning. Unfortunately, DLTR gapped down at $50.36 this morning.

- Suggested Positions -

Sept $52.50 Call (DLTR1222I52.5) @ $1.90 exit $1.25 (-34.2%)

08/13/12 exited at the open this morning (gap down @ 50.36)
08/11/12 exit on Monday morning
08/06/12 new stop loss @ 49.45, adjust time frame to exit prior to Aug. 16th earnings report

chart:

Entry on Aug 3rd at $ 51.42 (gap open)
Average Daily Volume = 1.5 million
Listed on Aug 2, 2012


PPG Industries - PPG - close: 110.14 change: -0.68

Stop Loss: 109.75
Target(s): 117.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
08/13/12 update: PPG is not working for us. The larger trend still looks bullish but short-term the stock cannot seem to get past resistance at $112.00. Traders did buy the dip midday but we don't want to wait any longer. Our trade has not opened. I am removing PPG as a candidate. Readers may want to keep it on their radar for a breakout or close over $112.00.

Our trade did not open.

chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 1.3 million
Listed on August 8, 2012


CLOSED BEARISH PLAYS

Akamai Technologies - AKAM - close: 35.74 change: -0.23

Stop Loss: 36.75
Target(s): 32.00
Current Option Gain/Loss: -56.2%
Time Frame: 2-4 weeks
New Positions: see below

Comments:
08/13/12 update: We have been cautious on our AKAM trade for days and decided this weekend that we would exit at the opening bell this morning. AKAM gapped down a $35.85.

- Suggested Positions -

Sept $34 PUT (AKAM1222U34) @ $1.53 exit $0.67 (-56.2%)

08/13/12 closed this morning
08/11/12 prepare to exit
08/02/12 triggered @ $34.85

chart:

Entry on Aug 2nd at $ 34.85
Average Daily Volume = 3.0 million
Listed on July 30, 2012