Editor's Note:

The markets delivered one of their worst weekly performances in months. The S&P 500 has fallen to its rising 50-dma and there is no guarantee of a bounce.

We had both SIX and SODA hit our entry point triggers on Friday.

Do not forget that October options expire after Friday, Oct. 19th.

Current Portfolio:


CALL Play Updates

Commvault Sys. - CVLT - close: 56.57 change: +0.03

Stop Loss: 54.90
Target(s): 62.00
Current Option Gain/Loss: -87.9%
Time Frame: exit prior to earnings on Oct. 30th
New Positions: see below

Comments:
10/13/12: CVLT has held up reasonably well. Shares are still bouncing off a test of the bottom of the $55-59 trading range. Unfortunately we are almost out of time. Our October options expire next weekend. We need CVLT to rally past $60.00 if this trade is going to work and with the major indices trending lower time is against us. I am not suggesting new positions at this time.

- Suggested Positions -

Long Oct $60 Call (CVLT1220j60) Entry $1.24

10/03/12 adjust exit target to $62.00
10/01/12 new stop loss @ 54.90
09/29/19 new stop loss @ 54.40

chart:

Entry on September 20 at $56.07
Average Daily Volume = 427 thousand
Listed on September 19, 2012


EQT Corp. - EQT - close: 60.32 change: -0.52

Stop Loss: 58.40
Target(s): 61.50
Current Option Gain/Loss: + 47.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/13/12: We are also running out of time with our EQT trade with October options poised to expire after five more trading days. With EQT flirting on either side of the $60 level every little dip or bounce is producing huge moves in our option value. At Thursday's close our option was up +113%. Now it's down to +47%.

Please note that I am adjusting our exit target down to $61.50. I am not suggesting new positions at this time.

- Suggested Positions -

Long Oct $60 call (EQT1220j60) Entry $0.61

10/13/12 adjust exit down to $61.50
10/11/12 new stop loss @ 58.40, readers may want to take profits now with the bid on our option at $1.30 (+113%)
10/08/12 readers may want to take profits now
10/06/12 new stop loss @ 57.75
10/04/12 new stop loss @ 57.45
09/27/12 new stop loss @ 56.45

chart:

Entry on September 24 at $57.89
Average Daily Volume = 1.0 million
Listed on September 22, 2012


Noble Energy, Inc. - NBL - close: 93.78 change: +0.49

Stop Loss: 91.75
Target(s): 99.75
Current Option Gain/Loss: Oct95c: -51.7% & Nov95c: -22.5%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/13/12: Thursday's relative weakness was fueled by a downgrade. Shares managed to recoup a good chunk of the decline on Friday after bouncing off its 30-dma.

We only have five trading days left for our October options so we need to plan an exit for those soon. I am not suggesting new positions at this time. Keep in mind that we do not want to hold over the late October earnings report.

Trigger @ 94.25

- Suggested Positions -

Long Oct $95 call (NBL1220j95) Entry $1.45

- or -

Long Nov $95 call (NBL1217k95) Entry $3.10

chart:

Entry on October 08 at $94.25
Average Daily Volume = 1.0 million
Listed on October 2, 2012


Sears Holding Corp. - SHLD - close: 59.92 change: -1.00

Stop Loss: 57.90
Target(s): 62.00
Current Option Gain/Loss: + 65.7%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/13/12: After four days of gains SHLD gave back -1.6% on Friday. The stock could be headed back toward $58 if the market's major indices continue to sink. More conservative traders may want to exit early now especially since we only have five trading days left for our October calls.

I am lowering our exit target down to $62.00. I am not suggesting new positions.

Earlier Comments:
SHLD could see some short covering. The most recent data listed short interest at 37% of the 31.3 million share float.

- Suggested Positions -

Long Oct $57.50 call (SHLD1220j57.5) Entry $1.75

10/13/12 adjust exit down to $62.00
10/11/12 new stop loss @ 57.90, readers may want to take profits now. Our option is up +125%.
10/06/12 new stop loss @ 54.75

chart:

Entry on September 28 at $56.11
Average Daily Volume = 1.7 million
Listed on September 27, 2012


Six Flags Entertainment - SIX - close: 62.09 change: +0.37

Stop Loss: 60.90
Target(s): 64.95
Current Option Gain/Loss: -42.8%
Time Frame: exit prior to the Oct. 24th earnings report
New Positions: see below

Comments:
10/13/12: SIX outperformed the market on Friday with a +0.5% gain. Yet the intraday pullback from its high is a bit troubling. Our trade did open when SIX hit our entry point at $62.25. Readers may want to wait for a new rally past $62.25 before initiating new positions. Just remember that we plan to exit prior to the October 24th earnings report.

FYI: The Point & Figure chart for SIX is bullish with a long-term $98 target. NOTE: Readers may want to keep their position size small. The bid/ask spread on options for SIX are a little wide.

- Suggested Positions -

Long Nov $65 call (SIX1217k65) Entry $1.05

chart:

Entry on October 12 at $62.25
Average Daily Volume = 334 thousand
Listed on October 10, 2012


PUT Play Updates

CACI Intl. - CACI - close: 48.65 change: -0.45

Stop Loss: 51.25
Target(s): 45.25
Current Option Gain/Loss: + 8.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/13/12: CACI continues to look ugly. Shares lost another -0.9% on Friday and closed near their lows for the session. The stock is down four weeks in a row so we face the constant risk of an oversold bounce. Right now the $50.00 level and the 10-dma near $50.40 should offer some overhead resistance.

FYI: The Point & Figure chart for CACI is bearish with a $20 target.

- Suggested Positions -

Long Nov $50 PUT (CACI1211w50) Entry $2.30

10/11/12 new stop loss @ 51.25

chart:

Entry on October 09 at $49.64
Average Daily Volume = 373 thousand
Listed on October 8, 2012


Deckers Outdoor - DECK - close: 36.44 change: -0.19

Stop Loss: 36.55
Target(s): 30.25
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the late October earnings report
New Positions: Yes, see below

Comments:
10/13/12: Hmm... DECK tried to rally but failed near $37.40 for the second day in a row. We are currently still on the sidelines. Right now the plan is to wait for a breakdown. We'll leave DECK on the newsletter for now.

Earlier Comments:
I want to caution readers that there are already a lot of bearish traders in DECK. The most recent data listed short interest at 33% of the small 30 million share float. That raises the risk of a short squeeze. Therefore we want to limit our position size to reduce our risk.

I am suggesting a trigger to buy puts at $34.45. Our target is $30.25. FYI: The Point & Figure chart for DECK is bearish with a long-term $20 target.

Trigger @ 34.45

- Suggested Positions -

buy the NOV $35 PUT (DECK1211w35)

chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 2.5 million
Listed on October 9, 2012


ITT Educational Services - ESI - close: 30.50 change: -1.09

Stop Loss: 32.05
Target(s): 25.15
Current Option Gain/Loss: -12.5%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/13/12: We had a close call with ESI this week. Shares bounced up to resistance near $32.00 but did not break that level. Friday saw a reversal with a -3.4% decline. I would wait for a new drop under $30.00 before considering new positions. Just remember our plan to exit prior to the Oct. 25th earnings report.

Earlier Comments:
I want to reiterate my caution about using small positions. ESI already has a high amount of short interest because so many investors think this stock is going lower.

- Suggested *SMALL* Positions -

Long 2013 Jan $27.50 PUT (ESI1319m27.5) Entry $3.10

chart:

Entry on October 04 at $29.47
Average Daily Volume = 408 thousand
Listed on October 3, 2012


Juniper Networks - JNPR - close: 16.35 change: -0.00

Stop Loss: 17.05
Target(s): 14.10
Current Option Gain/Loss: +12.5%
Time Frame: Exit prior the October 23rd earnings report
New Positions: see below

Comments:
10/13/12: Warning! JNPR has closed unchanged at $16.35 for two days in a row. I find that to be a caution signal for the bears. I am lowering our stop loss down to $17.05. More conservative traders may want to tighten their stop loss closer to the simple 10-dma instead.

I am not suggesting new positions. We need to exit prior to the October 23rd earnings report.

Earlier Comments:
The plan was to keep our position size small to reduce our risk. FYI: The Point & Figure chart for JNPR is bearish with a $13.50 target.

- Suggested *SMALL* Positions -

buy the Nov $16 PUT (JNPR1211W16) Entry $0.72

10/13/12 new stop loss @ 17.05
10/11/12 new stop loss @ 17.25

chart:

Entry on October 04 at $16.74
Average Daily Volume = 6.6 million
Listed on October 3, 2012


Lorillard, Inc - LO - close: 113.74 change: -0.02

Stop Loss: 115.75
Target(s): 110.25
Current Option Gain/Loss: + 1.2%
Time Frame: exit ahead of the Oct. 24th earnings report
New Positions: see below

Comments:
10/13/12: LO tried to bounce and made it to $115.31 intraday before revering course. The stock closed virtually unchanged on Friday. The overall trend remains negative. I would consider new positions here. However, we want to exit prior to the October 24th earnings report.

Please note our new stop loss at $115.75.

- Suggested Positions -

Long NOV $110 PUT (LO1217w110) Entry $2.33

10/13/12 new stop loss @ 115.75
10/11/12 triggered @ 114.50

chart:

Entry on October 11 at $114.50
Average Daily Volume = 1.4 million
Listed on October 10, 2012


Starbucks Corp. - SBUX - close: 47.18 change: +0.02

Stop Loss: 50.05
Target(s): 44.00
Current Option Gain/Loss: +30.0%
Time Frame: exit prior to the early November earnings report
New Positions: see below

Comments:
10/13/12: SBUX gave back its Friday morning gains to close virtually unchanged for the session. I don't see any changes from my prior comments. The trend is down but SBUX could see bounces toward short-term resistance near $48 or $49.00. I am not suggesting new positions at this time.

Our target is $44.00. More aggressive traders could aim lower since SBUX appears to be in a new trend of lower highs and lower lows.

- Suggested Positions -

Long Nov $50 PUT (SBUX1211w50) Entry $2.73

chart:

Entry on October 08 at $48.40
Average Daily Volume = 8.1 million
Listed on October 6, 2012


SodaStream - SODA - close: 35.89 change: -0.23

Stop Loss: 37.25
Target(s): 31.50
Current Option Gain/Loss: - 7.8%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/13/12: Our new bearish trade on SODA has been triggered. Shares fell to a new relative low on Friday and hit our entry point at $35.65. I would still consider new positions now or you could wait for a new relative low under $35.52 as your entry point.

Earlier Comments:
We will want to keep our position size small. The most recent data listed short interest at 55% of the very small 17.7 million-share float. That raises the risk of a short squeeze should SODA manage a rebound. Our target is $31.50 but we will plan to exit prior to the early November earnings report. FYI: The Point & Figure chart for SODA is bearish with a $30 target.

*Small Positions* - Suggested Positions -

Long Nov $35 PUT (SODA1217w35) Entry $2.55

chart:

Entry on October 12 at $35.65
Average Daily Volume = 528 thousand
Listed on October 11, 2012


Tech Data Corp. - TECD - close: 42.78 change: -0.21

Stop Loss: 44.65
Target(s): 42.00
Current Option Gain/Loss: +15.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/13/12: TECD erased Thursday's bounce on Friday. Shares remain oversold. The stock could see a rebound toward $44 and its 10-dma and still remain bearish. I am not suggesting new positions at this time. Our exit target is $42.00. More aggressive traders could aim lower. I am not suggesting new positions at this time.

Earlier Comments:
I would keep our position size small to limit our risk.

*Small Positions* - Suggested Positions -

Long Nov $45 PUT (TECD1211w45) Entry $1.95

10/10/12 new stop loss at $44.65
10/09/12 new stop loss @ 45.15
10/03/12 new stop loss @ 45.75
10/01/12 triggered @ 44.90

chart:

Entry on October 01 at $44.90
Average Daily Volume = 333 thousand
Listed on September 29, 2012