Editor's Note:

The market's early gains quickly faded and the S&P 500 index closed virtually unchanged on the session.

I have removed BTU as a trade. GRMN was stopped out. SLB was triggered.

Current Portfolio:


CALL Play Updates

Deere & Co - DE - close: 85.44 change: -0.03

Stop Loss: 84.25
Target(s): 89.90
Current Option Gain/Loss: -23.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/31/12: The market's early morning rally ran out of steam. DE closed virtually unchanged on the session. The bounce near $85.00 (84.82) is encouraging. If both DE and the S&P 500 open positive tomorrow I would consider new positions.

Trigger @ 85.55

- Suggested Positions -

Long NOV $87.50 call (DE1217k87.5) entry $0.88

10/26/12 triggered @ 85.55
10/25/12 adjust the entry trigger to $85.55, stop to $84.25

Entry on October 26 at $85.55
Average Daily Volume = 3.3 million
Listed on October 22, 2012


EV Energy Partners - EVEP - close: 65.24 change: -0.17

Stop Loss: 63.95
Target(s): 69.85
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the Nov. 8th earnings report
New Positions: Yes, see below

Comments:
10/31/12: Wednesday was a quiet day for EVEP. Shares churned sideways in the $65-66 zone most of the day. There is no change from my prior comments.

The October 11th high was $66.08. I am suggesting a trigger to buy calls at $66.25. If triggered our short-term target is $69.85. FYI: The Point & Figure chart for EVEP is bullish with an $83 target.

We want to exit prior to the Nov. 8th earnings report.

Trigger @ 66.25

- Suggested Positions -

buy the NOV $65 call (EVEP1217k65)

Entry on October xx at $ xx.xx
Average Daily Volume = 111 thousand
Listed on October 27, 2012


Green Mountain Coffee Roasters - GMCR - close: 24.18 change: -0.18

Stop Loss: 23.90
Target(s): 29.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
10/31/12: Wednesday was also a quiet session for GMCR. The stock churned sideways above the $24.00 level most of the session. We are still waiting for a breakout past resistance.

Earlier Comments:
GMCR could see a short squeeze. The most recent data listed short interest at 37% of the 127 million-share float. There is short-term technical resistance at the 50-dma.

I am suggesting we open small bullish positions if GMCR trades at $25.50 or higher. If triggered our target is $29.50.

Trigger @ 25.50 *Small Positions*

- Suggested Positions -

buy the NOV $27 call (GMCR1217k27)

Entry on October xx at $ xx.xx
Average Daily Volume = 6.0 million
Listed on October 24, 2012


iShares Russell 2000 - IWM - close: 81.63 change: +0.49

Stop Loss: 81.45
Target(s): 86.00
Current Option Gain/Loss: Unopened
Time Frame: several weeks
New Positions: Yes, see below

Comments:
10/31/12: As we suspected the small cap index and ETF managed a bounce. Yet the shares of the IWM remain under short-term resistance at $82.00. We are looking for a breakout higher.

Earlier Comments:
The Russell 2000 index and its IWM ETF are testing a trend line of support as well as technical support at its 100-dma (and near its 200-dma). I am suggesting we buy calls if the IWM bounces. Thursday's high was $82.14. I am suggesting a trigger to buy calls at $82.25. We'll use a stop loss at $81.45. Our multi-week target is $86.00.

Trigger @ 82.25

- Suggested Positions -

buy the 2013 Jan $85 call (IWM1319a85)

Entry on October xx at $ xx.xx
Average Daily Volume = 35 million
Listed on October 27, 2012


Medivation, Inc. - MDVN - close: 51.12 change: -1.09

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: -57.0%
Time Frame: exit prior to the Nov. 8th earnings report (unconfirmed date)
New Positions: see below

Comments:
10/31/12: It was not a good day for MDVN. Actually the last two trading days in a row have been sour for this stock. Shares underperformed the market today with a -2.0% decline. Traders did buy the dip at support near $50.00 and the 100-dma but there is no guarantee it will bounce.

Given the relative weakness in MDVN, readers may want to exit early. I am not suggesting new positions at this time.

Making matters worse the spread on our option has grown wider!

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

- Suggested Positions -

Long Nov $55 CALL (MDVN1217K55) Entry $2.00

10/20/12 Friday's bounce looks like a new entry point.
10/17/12 MDVN is not cooperating and closed under the 50-dma, readers may want to exit immediately.
10/15/12 triggered @ 52.50

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


Sempra Energy - SRE - close: 69.75 change: +0.77

Stop Loss: 66.95
Target(s): 72.00
Current Option Gain/Loss: +42.8%
Time Frame: Exit prior to the Nov. 6th earnings report
New Positions: see below

Comments:
10/31/12: SRE displayed relative strength this morning with a quick surge higher to resistance at $70.00. Shares recovered from the midday pullback to close near $70.00 this afternoon.

The trend is up but the $70.00 level could be round-number resistance. Do not be surprised to see a dip to the 10-dma before SRE moves higher again.

- Suggested Positions -

Long DEC $70 call (SRE1222L70) Entry $0.70

Entry on October 26 at $68.65
Average Daily Volume = 939 thousand
Listed on October 25, 2012


PUT Play Updates

The Mosaic Co. - MOS - close: 52.34 change: -0.19

Stop Loss: 54.25
Target(s): 48.00
Current Option Gain/Loss: +10.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/31/12: The early morning rally attempt in MOS quickly reversed and shares fell to new relative lows. I am not suggesting new positions at this time.

- Suggested Positions -

Long NOV $55 PUT (MOS1217w55) entry $2.60

10/27/12 new stop loss @ 54.25
10/23/12 triggered @ 53.45

Entry on October 23 at $53.45
Average Daily Volume = 3.9 million
Listed on October 20, 2012


Schlumberger Ltd. - SLB - close: 69.53 change: -0.57

Stop Loss: 71.05
Target(s): 65.25
Current Option Gain/Loss: + 0.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/31/12: Our SLB trade has been opened. Shares spiked toward $71.00 this morning and then reversed, breaking support near $70.00, and hitting our entry point at $69.65. I would still consider new positoins now at current levels.

Earlier Comments:
SLB appears to have formed a bearish head-and-shoulders pattern, which would forecast a drop toward the $62 area. FYI: The Point & Figure chart for SLB is bearish with a $64 target.

- Suggested Positions -

Long NOV $70 PUT (SLB1217w70) entry $1.70

10/31/12 triggered @ 69.65

Entry on October 31 at $69.65
Average Daily Volume = 5.3 million
Listed on October 25, 2012


CLOSED BULLISH PLAYS

Peabody Energy - BTU - close: 27.90 change: -0.24

Stop Loss: 25.60
Target(s): 31.50
Current Option Gain/Loss: Unopened
Time Frame: several weeks
New Positions: see below

Comments:
10/31/12: We've been waiting on BTU to produce an entry point for a while now. At this point we are removing BTU as a trade. Our entry point has not been hit. Nimble traders may want to keep an eye on it. A rally past $29.00 could be an alternative, more aggressive entry point.

Trade did not open.

10/31/12 removed from the newsletter.

chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 10.6 million
Listed on October 23, 2012


CLOSED BEARISH PLAYS

Garmin Ltd. - GRMN - close: 38.00 change: -0.99

Stop Loss: 40.10
Target(s): 36.00
Current Option Gain/Loss: -18.9%
Time Frame: exit prior to the Oct. 31st earnings report
New Positions: see below

Comments:
10/31/12: Hurricane Sandy didn't do us any favors. Our plan was to exit on Oct. 30th to avoid holding over GRMN's earnings report. Unfortunately the market was closed on the 29th and the 30th. We were unable to exit. GRMN reported earnings this morning that beat estimates by 13 cents and management actually raised their 2012 guidance. Shares opened higher at $39.33 and spiked to $42.00 before reversing.

Our trade was stopped out at $40.10.

While our trade has been closed I would keep an eye on GRMN. Shares closed down -2.5% in spite of what looks like a very bullish earnings report and guidance. If traders are selling good news then GRMN probably had further to fall.

Earlier Comments:
We want to limit our position size since the most recent data listed short interest at 16% of the 123 million share float. We will plan to exit prior to the October 31st earnings report.

- Suggested *Small* Positions -

NOV $40 PUT (GRMN1217w40) Entry $1.85 exit $1.50 (-18.9%)

10/31/12 stopped out at $40.10
10/27/12 prepare to exit on Oct. 30th at the close
10/23/12 lack of downward movement today is trouble. Readers may want to exit now. New stop loss @ 40.10

chart:

Entry on October 18 at $39.51
Average Daily Volume = 787 thousand
Listed on October 17, 2012