Editor's Note:

The market spent last week going sideways waiting for Bernanke. Now stocks are waiting for Draghi and the ECB meeting tomorrow.

We closed WFM as planned. I have removed CELG and MOS, neither trade had opened yet. We want to exit BRCM at the open tomorrow.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 84.08 change: -0.25

Stop Loss: 82.40
Target(s): 88.50
Current Option Gain/Loss: Sep85c: -36.2% & Oct85c: -10.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/05/12: AMGN is not making much progress with the stock market churning sideways. Shares gave back -0.29% today. There are no changes from my weekend comments.

- Suggested Positions -

Long Sep $85 call (AMGN1222i85) Entry $1.35

- or -

Long Oct $85 call (AMGN1220j85) Entry $2.15

09/01/12 new stop loss @ 82.40
08/27/12 new stop loss @ 81.95
08/15/12 triggered at $83.75

Entry on August 15 at $83.75
Average Daily Volume = 4.8 million
Listed on August 14, 2012


BRCM - Broadcom - close: 34.93 change: -0.41

Stop Loss: 34.40
Target(s): 38.50
Current Option Gain/Loss: - 6.1%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
09/05/12: BRCM continues to drift sideways. We are giving up on this play. I am suggesting readers exit positions at the opening bell tomorrow morning.

- Suggested Positions -

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

09/05/12 prepare to exit tomorrow morning
08/18/12 new stop loss @ 34.40
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


Concur Technologies - CNQR - close: 74.18 change: +0.84

Stop Loss: 71.25
Target(s): 74.75 (Sept calls), $77.50 (Nov calls)
Current Option Gain/Loss: Sep75c: +32.0% & Nov75c: +30.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/05/12: CNQR displayed relative strength again with a +1.1% gain. The stock appears to be breaking out from its recent consolidation along the $72 level. The high today was $74.50. There is no change from my prior comments.

We will plan on exiting our September $75 calls at $74.75 but I am raising the exit target on our November calls to $77.50.

I am not suggesting new positions at this time.

- Suggested Positions -

Long Sep $75 call (CNQR1222i75) Entry $1.25

- or -

Long Nov $75 call (CNQR1217j75) Entry $3.60

09/04/12 adjust exit target for Sept. calls to $74.75
adjust exit target for Nov. calls to $77.50
+ new stop loss @ 71.25
08/21/12 new stop loss @ 69.75
08/16/12 new stop loss @ 68.75
08/15/12 triggered at $70.25

Entry on August 15 at $70.25
Average Daily Volume = 577 thousand
Listed on August 13, 2012


Carter's Inc. - CRI - close: 56.57 change: +0.07

Stop Loss: 54.65
Target(s): 59.85
Current Option Gain/Loss: - 8.6%
Time Frame: 3 weeks
New Positions: see below

Comments:
09/05/12: CRI hit a new four-month high this morning at $57.19 but shares pared their gains by the closing bell. Readers can look for a new dip near $56.00 as another entry point to buy calls.

It looks like the spreads on the October calls has improved so I would consider buying the Octobers instead of Septembers.

- Suggested Positions -

Long Sep $55 call (CRI1222i55) Entry $2.30

09/04/12 triggered @ 56.25

Entry on September 04 at $56.25
Average Daily Volume = 441 thousand
Listed on September 01, 2012


Express Scripts - ESRX - close: 62.85 change: -0.20

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: Sep62.5c: +37.8% & Oct$62.5c: +28.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/05/12: ESRX hit a new high on an intraday basis but shares faded to a -0.3% decline. Traders can look for short-term support at the 10-dma near $62.00.

FYI: The Point & Figure chart for ESRX is bullish with a $76 target.

- Suggested Positions -

Long Sep $62.50 call (ESRX1222i62.5) Entry $0.95

- or -

Long Oct $62.50 call (ESRX1220j62.5) Entry $1.67

Entry on August 24 at $61.31
Average Daily Volume = 5.1 million
Listed on August 23, 2012


PUT Play Updates

CH Robinson Worldwide - CHRW - close: 56.37 change: +0.07

Stop Loss: 58.05
Target(s): 51.25
Current Option Gain/Loss: -20.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/05/12: The transportation sector continues to underperform the rest of the market. Unfortunately, CHRW's intraday bounce back into positive territory is a bit troubling. More conservative traders may want to cinch down their stops toward the $57.25 area instead. I am growing a little more cautious even though the long-term trend is still bearish. Readers may want to wait for a close under $56.00 before launching new positions.

- Suggested *Small* Positions -

Long Oct $55 PUT (CHRW1220v55) entry $1.38

Entry on August 29 at $56.29
Average Daily Volume = 1.1 million
Listed on August 28, 2012


Cummins Inc. - CMI - close: 95.33 change: +0.04

Stop Loss: 100.55
Target(s): 92.50
Current Option Gain/Loss: +44.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/05/12: CMI spent the session churning sideways between $95 and $96. We have been expecting the $95.00 level to act as short-term support. Readers may want to consider taking profits early right now. I would not open new positions at this time.

Earlier Comments:
There is potential support at $95.00 and the 50-dma but we are aiming for $92.50.

- Suggested Positions -

Long Sep $95 PUT (CMI1222u95) Entry $1.70

08/28/12 new stop loss @ 100.55
08/28/12 trade opens with CMI gapping down at $98.28

Entry on August 28 at $98.28
Average Daily Volume = 2.3 million
Listed on August 27, 2012


FB - Facebook - close: 18.58 change: +0.85

Stop Loss: 19.15
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: +13.7%
New Positions: see below

Comments:
09/05/12: Shares of FB popped for a +4.8% bounce today. The move was fueled by a company press release last night. Facebook said that its founder and CEO Mark Zuckerberg had no plans to sell any additional stock for the next twelve months. Personally, I see this as a publicity stunt by the company to try and stop the plunging stock price. The stock had plunged from its IPO price of $38 a share to close under $18 yesterday (-52%). Mr. Zuckerberg certainly doesn't need the money after selling 30.2 million shares in the IPO for a windfall of $1.1 billion. I'm sure he can make it another 12 months without selling more stock.

Prior support at $19.00 should be new resistance. I am not suggesting new positions at this time.

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 (FB1222U20) entry $1.45

09/01/12 new stop loss @ 19.15
08/18/12 new stop loss @ 20.35, readers may want to take profits now
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


PetroChina Co. Ltd. - PTR - close: 117.11 change: -0.75

Stop Loss: 121.25
Target(s): 111.00
Current Option Gain/Loss: Sep120p: +12.3% & Oct115p: +13.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/05/12: PTR continues to sink, hitting new relative lows. Readers may want to start thinking about adjusting their stop loss lower.

Earlier Comments:
I do consider this somewhat of an aggressive trade since PTR gaps open (up and down) quite often as its price adjusts to trading back home overnight in China.

- Suggested Positions -

Long Sep $120 PUT (PTR1222u120) Entry $3.65*

- or -

Long Oct $115 PUT (PTR1220v115) Entry $3.16

09/04/12 triggered @ 118.75
*entry price on the Sept. $120 put is an estimate as the option did not trade when our play was triggered.

Entry on September 04 at $118.75
Average Daily Volume = 125 thousand
Listed on September 01, 2012


Weight Watchers Intl. - WTW - close: 47.01 change: +0.03

Stop Loss: 50.10
Target(s): 42.50
Current Option Gain/Loss: Sep47.5p: - 8.1% & Oct45p: -10.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/05/12: Wednesday was a very quiet session for WTW. Shares drifted sideways in a narrow range. There is no change from my prior comments. Readers may want to start inching down their stop loss.

- Suggested Positions -

Long Sep $47.50 PUT (WTW1222u47.5) Entry $1.85

- or -

Long Oct $45.00 PUT (WTW1220V45) Entry $1.85

08/28/12 new stop loss @ 50.10

Entry on August 24 at $48.21
Average Daily Volume = 929 thousand
Listed on August 23, 2012


CLOSED BULLISH PLAYS

Celgene Corp. - CELG - close: 70.96 change: -1.11

Stop Loss: 70.45
Target(s): 77.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
09/05/12: CELG has been trading sideways under resistance in the $72.00-72.50 zone for several weeks now. We are dropping this stock as a candidate. Shares have not yet hit our entry trigger at $72.75.

Trade did not open.

09/05/12 removed from the play list. trade did not open.

chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 2.9 million
Listed on August 25, 2012


Whole Foods Market, Inc. - WFM - close: 96.31 change: -0.32

Stop Loss: 94.75
Target(s): 104.50
Current Option Gain/Loss: Sep$100c: -43.4% & Oct$100c: -28.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/05/12: We have been concerned about WFM's lackluster performance. Yesterday we decided to exit positions at the open this morning. We were fortunate that WFM actually gapped open higher this morning before reversing lower.

Earlier Comments:
Keep position size small to limit risk.

- Suggested *SMALL* Positions -

Sep $100 call (WFM1222i100) Entry $1.45 exit $0.82 (-43.4%)

- or -

Oct $100 call (WFM1220j100) Entry $2.50 exit $1.80*(-28.0%)

*option exit price is an estimate since the option did not trade at the time our play was closed.
09/05/12 closed at the open this morning
09/04/12 prepare to exit at the open tomorrow morning

chart:

Entry on August 23 at $98.00
Average Daily Volume = 1.7 million
Listed on August 22, 2012


CLOSED BEARISH PLAYS

Mosaic Company - MOS - close: 58.81 change: +2.06

Stop Loss: 58.55
Target(s): 50.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/05/12: MOS clearly does not want to cooperate with our bearish plans for the stock. Shares of MOS surged +3.6% today on no news. Actually most of the chemical/fertilizer related stocks rallied today. Our trigger to launch bearish positions has not been hit. We are dropping MOS as a candidate based on this show of strength.

Trade did not open.

09/05/12 trade did not open. removed from the newsletter.

Annotated Chart:

Entry on September xx at $ xx.xx
Average Daily Volume = 2.9 million
Listed on September 04, 2012