Editor's Note:

The stock market's bounce continued on Tuesday in spite of some very mixed and somewhat bearish headlines out of Europe.

SHLD hit our bullish target.

JNPR and LO hit our stop loss.

Current Portfolio:


CALL Play Updates

Commvault Sys. - CVLT - close: 58.54 change: +1.50

Stop Loss: 54.90
Target(s): 62.00
Current Option Gain/Loss: -75.8%
Time Frame: exit prior to earnings on Oct. 30th
New Positions: see below

Comments:
10/16/12: I double checked a couple of different quote feeds. Both of them said today's intraday low in CVLT was only $55.74. If you look at an intraday chart it looks lower than that.

The stock did show some relative strength and add +2.6%. Unfortunately CVLT is still trading under resistance at $60.00.

We have three days left on our October call. Readers may want to exit now to minimize losses instead of betting the bounce continues.

- 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

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


EQT Corp. - EQT - close: 60.52 change: +0.63

Stop Loss: 58.75
Target(s): 61.50
Current Option Gain/Loss: + 22.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/16/12: The bounce resumes with traders buying the dip in EQT. Readers may want to exit now. However, we do still have three days left and now that our call is in the money every tick higher helps. Of course if there is any reversal the option is going to drop quickly. Right now our exit target is $61.50.

- Suggested Positions -

Long Oct $60 call (EQT1220j60) Entry $0.61

10/15/12 new stop loss @ 58.75, readers may want to exit now
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

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


Medivation, Inc. - MDVN - close: 51.86 change: -0.84

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: -21.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/16/12: Hmm... the trading action in MDVN today is very worrisome! The stock did not bounce with the rest of the market. Shares have technically closed underneath what was supposed to be technical support at the 50-dma. More conservative traders may want to abandon ship immediately. Or as an alternative, raise your stop toward today's low at $51.10. I am not suggesting new positions.

Earlier Comments:
We will plan to exit prior to the early November earnings report.

- Suggested Positions -

Long Nov $55 CALL (MDVN1217K55) Entry $2.00

10/15/12 triggered @ 52.50

Entry on October 15 at $52.50
Average Daily Volume = 780 thousand
Listed on October 12, 2012


Noble Energy, Inc. - NBL - close: 94.69 change: +0.92

Stop Loss: 91.75
Target(s): 99.75
Current Option Gain/Loss: Oct95c: -51.7% & Nov95c: -12.9%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/16/12: Oil and energy stocks did participate in the market's rally today and NBL added +0.9%. Unfortunately the rally reversed at last week's high near $95.50. More conservative traders will want to exit early right now. Of course there is a chance this bounce continues and we do still have three days left but any declines in NBL and our October option is going to evaporate. 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

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


Six Flags Entertainment - SIX - close: 63.99 change: +1.75

Stop Loss: 60.90
Target(s): 64.75
Current Option Gain/Loss: +66.6%
Time Frame: exit prior to the Oct. 24th earnings report
New Positions: see below

Comments:
10/16/12: SIX delivered a strong performance with a +2.8% gain and a new all-time high.

I am not suggesting new positions at this time. Please note that we are adjusting our exit target down to $64.75. Don't forget that we do not want to hold over 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

10/16/12 adjust exit target down to $64.75

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


SPX Corp. - SPW - close: 68.90 change: +0.00

Stop Loss: 68.40
Target(s): 74.00
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Oct. 31st.
New Positions: Yes, see below

Comments:
10/16/12: SPW's performance today is disappointing. The market produced a widespread rally and SPW closed unchanged on the session. There is no change from my prior comments.

I am suggesting a trigger to buy calls at $70.25. If triggered our target is $74.00 but we'll plan on exiting prior to the Oct. 31st earnings report. FYI: The Point & Figure chart for SPW is bullish with an $85 target.

Trigger @ 70.25

- Suggested Positions -

buy the NOV $70 call (SPW1217k70)

Entry on October xx at $ xx.xx
Average Daily Volume = 594 thousand
Listed on October 15, 2012


PUT Play Updates

CACI Intl. - CACI - close: 49.47 change: +0.37

Stop Loss: 51.25
Target(s): 45.25
Current Option Gain/Loss: -13.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/16/12: Just as we expected shares of CACI bounced toward short-term resistance near $50 and the 10-dma. A failure here could be used as a new bearish entry point. More conservative traders may want to adjust their stop loss lower.

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

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


Deckers Outdoor - DECK - close: 36.43 change: +1.13

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:
10/16/12: DECK rallied with the market today. Shares remain above support at the $35 level. If DECK rallies again tomorrow we will likely drop it as a candidate.

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)

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


ITT Educational Services - ESI - close: 29.64 change: -0.06

Stop Loss: 32.05
Target(s): 25.15
Current Option Gain/Loss: +37.0%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/16/12: ESI did not participate in the market's rally today, which is good news for bears. After the closing bell tonight rival APOL reported earnings and beat estimates but APOL guided lower. Now shares of APOL are down sharply after hours and that could weigh heavily on shares of ESI tomorrow morning.

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

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


Mosaic Co. - MOS - close: 54.49 change: +0.57

Stop Loss: 55.55
Target(s): 50.15
Current Option Gain/Loss: -24.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/16/12: MOS added +1.0% today. It looks like the bounce was struggling with technical resistance at the 10 and 200-dma midday. I would wait for a new drop under $54.00 before considering new bearish positions. Our initial target is $50.00 but more aggressive traders could aim lower.

- Suggested Positions -

Long Nov $52.50 PUT (MOS1217w52.5) Entry $1.25

10/15/12 trade opened

Entry on October 15 at $53.90
Average Daily Volume = 4.2 million
Listed on October 12, 2012


Starbucks Corp. - SBUX - close: 48.96 change: +1.29

Stop Loss: 50.05
Target(s): 44.00
Current Option Gain/Loss: -16.4%
Time Frame: exit prior to the early November earnings report
New Positions: see below

Comments:
10/16/12: The stock market's widespread gain today sparked some short covering and SBUX gapped open higher above short-term resistance at $48.00 and its 300-dma. The rally surged to $49.28 intraday and SBUX settled with a +2.7% gain. 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

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


Tech Data Corp. - TECD - close: 43.79 change: +0.94

Stop Loss: 44.25
Target(s): 42.00
Current Option Gain/Loss: - 5.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/16/12: TECD produced a +2.1% gain. Shares were oversold so a bounce isn't that surprising. The close over its simple 10-dma is short-term bullish but the rally stalled at short-term resistance near $44.00. Of course the bounce may not be over yet and readers may want to exit early now. We will leave our stop loss at $44.25 for now. 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

10/15/12 new stop loss @ 44.25
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

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


CLOSED BULLISH PLAYS

Sears Holding Corp. - SHLD - close: 62.17 change: +1.85

Stop Loss: 57.90
Target(s): 62.00
Current Option Gain/Loss: +160.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/16/12: Target achieved.

SHLD displayed relative strength with a +3.0% gain. The stock hit our exit target at $62.00 midday. Our trade is closed but I would keep an eye on SHLD. Bigger picture the stock seems to have build a bottom over the last several months and a breakout past $63-64 could be a new bullish buy signal.

- Suggested Positions -

Oct $57.50 call (SHLD1220j57.5) Entry $1.75 exit $4.55 (+160.0%)

10/16/12 target hit
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


CLOSED BEARISH PLAYS

Juniper Networks - JNPR - close: 17.48 change: +0.69

Stop Loss: 17.05
Target(s): 14.10
Current Option Gain/Loss: -33.3%
Time Frame: Exit prior the October 23rd earnings report
New Positions: see below

Comments:
10/16/12: I warned readers yesterday that the breakout over the 10-dma was trouble. The rally continued today and JNPR surged +4.1%. Our stop was hit at $17.05.

Earlier Comments:
The plan was to keep our position size small to reduce our risk.

- Suggested *SMALL* Positions -

Nov $16 PUT (JNPR1211W16) Entry $0.72 exit $0.48 (-33.3%)

10/16/12 stopped out @ 17.05
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: 117.37 change: +1.92

Stop Loss: 115.75
Target(s): 110.25
Current Option Gain/Loss: -41.6%
Time Frame: exit ahead of the Oct. 24th earnings report
New Positions: see below

Comments:
10/16/12: The bounce in LO continued as well. Unfortunately the stock gapped open higher at $117.38, which was way above our stop loss at $115.75. The larger trend in LO is still bearish but the bounce may not be over yet.

- Suggested Positions -

NOV $110 PUT (LO1217w110) Entry $2.33 exit $1.36 (-41.6%)

10/16/12 stopped out on the gap open higher @ 117.38
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