Editor's Note:

It looks like Wall Street takes a dim view of Obama's second term. Stocks produced widespread declines following election day in the U.S.

HON, LLL, SPW, and SRCL were all stopped out. I have removed MTB.

Current Portfolio:


CALL Play Updates

EV Energy Partners - EVEP - close: 64.95 change: -0.67

Stop Loss: 63.95
Target(s): 69.85
Current Option Gain/Loss: - 24.5%
Time Frame: exit prior to the Nov. 8th earnings report
New Positions: see below

Comments:
11/07/12: EVEP held up pretty well considering the market's steep declines. Yet we're almost out of time. The plan is to exit positions tomorrow (Nov. 8th) at the closing bell to avoid holding over the earnings report.

- Suggested Positions -

Long NOV $65 call (EVEP1217k65) entry $2.85

11/07/12 exit tomorrow at the close
11/05/12 prepare to exit on Nov. 8th at the close to avoid earnings
11/05/12 EVEP traded ex-dividend today ($0.776).

Entry on November 02 at $66.25
Average Daily Volume = 111 thousand
Listed on October 27, 2012


Green Mountain Coffee Roasters - GMCR - close: 24.74 change: -0.54

Stop Loss: 23.90
Target(s): 29.50
Current Option Gain/Loss: - 69.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/07/12: Our GMCR trade is in trouble. Shares have broken down and closed below support at the $25.00 level. Readers may want to exit immediately. I am not suggesting new positions at this time.

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.

*Small Positions* - Suggested Positions -

Long NOV $27 call (GMCR1217k27) entry $0.85

11/01/12 triggered @ 25.50

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


Harley-Davidson - HOG - close: 46.51 change: -1.10

Stop Loss: 45.60
Target(s): 52.25
Current Option Gain/Loss: -40.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/07/12: The market's sharp decline produced a sharp drop in HOG and shares fell to $45.73 intraday before bouncing. The bounce appears to be failing. Readers will want to seriously consider an early exit right now. We are raising our stop loss to $45.60.

Earlier Comments:
The $50.00 level could be round-number resistance and conservative traders may want to exit near $50.00. I am setting our exit target at $52.25 instead.

- Suggested Positions -

Long DEC $50 call (HOG1222L50) entry $0.82

11/07/12 adjust stop loss to $45.60
11/01/12 triggered at $47.50

Entry on November 01 at $47.50
Average Daily Volume = 2.5 million
Listed on October 31, 2012


PUT Play Updates

The Mosaic Co. - MOS - close: 52.23 change: -1.41

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:
11/07/12: The stock market's widespread declines today has short-circuited the rebound in MOS. Shares gapped open lower and fell toward support near $52.00. 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


Oil States Intl. - OIS - close: 67.48 change: -2.52

Stop Loss: 71.05
Target(s): 65.25
Current Option Gain/Loss: +24.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/07/12: OIS continues to underperform the market. Shares gapped open lower at $68.545 and closed with a -3.6% decline. I am lowering our stop loss to $71.05, just above yesterday's high.

- Suggested *Small* Positions -

Long DEC $65 PUT (OIS1222x65) entry $1.45

11/07/12 new stop loss @ 71.05

Entry on November 05 at $69.80
Average Daily Volume = 589 thousand
Listed on November 3, 2012


CLOSED BULLISH PLAYS

Honeywell Intl. - HON - close: 63.53 change: +0.73

Stop Loss: 61.75
Target(s): 68.00
Current Option Gain/Loss: -39.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/07/12: The market reaction to Obama's re-election was negative and shares of HOG gapped open lower at $62.74 and eventually dipped to $61.72 at is worst levels of the day. Our stop loss was hit at $61.75.

NOTE: The long-term trend is still up. Readers may want to keep HON on their watch list.

- Suggested Positions -

DEC $65 call (HON1222L65) entry $0.66 exit $0.40 (-39.3%)

11/07/12 stopped out at $61.75
11/07/12 opened on the gap down at $62.74

Annotated Chart:

Entry on November 07 at $62.74
Average Daily Volume = 3.8 million
Listed on November 6, 2012


L-3 Communications - LLL - close: 74.40 change: -3.06

Stop Loss: 74.75
Target(s): 79.75
Current Option Gain/Loss: -22.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/07/12: LLL had been showing a lot of relative strength in recent days. It was all erased with today's volatile decline. Shares gapped down at $76.14 and then plunged to $72.27 before bouncing. Investors could be worried how the defense contractors might fare under a second Obama term. Our stop loss was hit at $74.75.

- Suggested Positions -

Dec $75 call (LLL1222L75) entry 2.00* exit $1.55 (-22.5%)

11/07/12 stopped out at $74.75
11/06/12 new stop loss @ 74.75
11/05/12 triggered @ 75.25
*option entry price is an estimate since the option did not trade at the time our play was closed.

chart:

Entry on November 05 at $75.25
Average Daily Volume = 423 thousand
Listed on November 3, 2012


M&T Bank Corp. - MTB - close: 100.97 change: -3.73

Stop Loss: 103.25
Target(s): 109.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/07/12: MTB was a new trade on the newsletter but shares dropped sharply today with a dip toward round-number support at $100.00. It is unlikely that MTB will hit our proposed entry point at $105.50 any time soon so we are removing it as an active candidate.

Trigger @ 105.50

- Suggested Positions -

Trade did not open.

11/07/12 removed from the newsletter. trade did not open.

Annotated Chart:

Entry on November xx at $ xx.xx
Average Daily Volume = 1.0 million
Listed on November 6, 2012


SPX Corp. - SPW - close: 67.42 change: -3.79

Stop Loss: 68.35
Target(s): 74.75
Current Option Gain/Loss: -56.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/07/12: Recent strength in shares of SPW has vanished. The market's big decline today produced an even bigger drop in SPW. Shares gapped open lower at $69.62 and plunged to a -5.3% decline. Our stop loss was hit at $68.35.

- Suggested Positions -

Dec $75 call (SPW1222L75) entry $1.15 exit $0.50 (-56.5%)

11/07/12 stopped out at $68.35
11/06/12 triggered @ 70.25

chart:

Entry on November 06 at $70.25
Average Daily Volume = 500 thousand
Listed on November 5, 2012


Stericycle, Inc. - SRCL - close: 93.70 change: -1.11

Stop Loss: 93.60
Target(s): 99.75 or $104.00
Current Option Gain/Loss: - 26.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/07/12: SRCL reacted very poorly this morning and shares gapped open lower at $91.54 before quickly bouncing back into the $93.50-94.00 zone. Shares spent the rest of the churning sideways in this area. Yet our stop loss was $93.60 so the gap down at the open closed our trade.

- Suggested Positions -

DEC $100 call (SRCL1222L100) Entry $0.75 exit $0.55 (-26.6%)

11/07/12 stopped out on gap open lower at $91.54

chart:

Entry on November 2 at $95.98
Average Daily Volume = 509 thousand
Listed on November 1, 2012