Editor's Note:

The U.S. market's midday bounce has failed with stocks rolling over this afternoon and closing near their lows.

Our MELI trade has been triggered. We are adjusting our strategy on MOS based on the company's bearish guidance tonight.

Current Portfolio:


CALL Play Updates

American Tower Corp. - AMT - close: 74.23 change: -0.51

Stop Loss: 73.95
Target(s): 79.85
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
11/13/12: The sideways churn in AMT continues. If we see AMT close under $74 I am likely to drop it as a candidate.

Earlier Comments:
The early October high was $76.22. I am suggesting a trigger to buy calls at $76.25. Our target is $79.85. More aggressive traders could aim higher.

Trigger @ 76.25

- Suggested Positions -

buy the DEC $77.50 call (AMT1222L77.5)

Entry on November xx at $ xx.xx
Average Daily Volume = 2.3 million
Listed on November 7, 2012


Nu Skin Enterprises. - NUS - close: 46.11 change: -0.97

Stop Loss: 45.45
Target(s): 54.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
11/13/12: NUS came close but did not hit our trigger today. The late morning rally reversed at the $47.50 level. Shares actually underperformed the market with a -2.0% drop for the day.

Earlier Comments:
If the stock continues to climb it could spark another short squeeze. The most recent data listed short interest at 20% of the 50.7 million share float. Due to NUS' volatility I am suggesting we keep our position size small to limit our risk. We do not know what sort of headlines might emerge from NUS' annual investor day on November 14th (this Wednesday). I am suggesting a trigger to buy calls at $47.60. FYI: The Point & Figure chart for NUS is bullish with a $65 target.

Trigger @ 47.60 *Small Positions*

- Suggested Positions -

buy the DEC $50 call (NUS1222L50)

Entry on November xx at $ xx.xx
Average Daily Volume = 1.2 million
Listed on November 12, 2012


PUT Play Updates

Carpenter Tech. - CRS - close: 47.62 change: -0.91

Stop Loss: 50.05
Target(s): 42.50
Current Option Gain/Loss: - 4.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/13/12: CRS gave back a good chunk of yesterday's gains. The intraday bounce attempt rolled over underneath the simple 10-dma.

Earlier Comments:
Our multi-week target is $42.50. CRS can be somewhat volatile so readers may want to limit their position size to reduce risk.

- Suggested Positions -

Long Dec $45 PUT (CRS1222x45) Entry $1.15

Entry on November 12 at $48.23
Average Daily Volume = 460 thousand
Listed on November 10, 2012


Dow Jones Industrial Average (ETF) - DIA - close: 127.53 change: -0.51

Stop Loss: 130.15
Target(s): 125.25
Current Option Gain/Loss: + 6.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/13/12: The DIA's intraday bounce failed and shares look poised to hit new relative lows soon. I am lowering our stop loss to $130.15.

- Suggested Positions -

long DEC $125 PUT (DIA1222x125) entry $1.79

11/13/12 new stop loss @ 130.15
11/08/12 new stop loss @ 130.60

Entry on November 08 at $129.18
Average Daily Volume = 5.3 million
Listed on November 7, 2012


iShares Russell 2000 ETF - IWM - close: 78.70 change: -0.45

Stop Loss: 81.05
Target(s): 75.50
Current Option Gain/Loss: + 5.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
11/13/12: We see a similar performance here in IWM. The market's morning rally reversed and the IWM closed near its lows for the session. I am lowering our stop loss to $81.05.

- Suggested Positions -

Long 2013 Jan $75 PUT (IWM1319m75) entry $1.53

11/13/12 new stop loss @ 81.05

Entry on November 08 at $79.85
Average Daily Volume = 36 million
Listed on November 7, 2012


Lufkin Industries - LUFK - close: 50.19 change: +0.64

Stop Loss: 51.85
Target(s): 45.15
Current Option Gain/Loss: -43.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/13/12: I do not see any news to account for LUFK's relative strength today. Shares outperformed the market with a +1.2% gain. Bears can argue that the rally failed near its descending 10-dma. Bulls can argue that today has created a bullish engulfing candlestick reversal pattern. The larger pattern remains bearish but I am not suggesting new positions at this time.

- Suggested Positions -

Long DEC $45 PUT (LUFK1222x45) entry $1.50

Entry on November 09 at $48.95
Average Daily Volume = 467 thousand
Listed on November 8, 2012


Mercadolibre - MELI - close: 73.91 change: -1.15

Stop Loss: 77.75
Target(s): 70.25
Current Option Gain/Loss: + 3.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/13/12: MELI gapped open lower at $74.56 this morning. That was below our trigger at $74.75 and immediately triggered our play. Shares bounced back this afternoon but started to roll over under what should be new resistance at the $75.00 mark.

Earlier Comments:
I do consider this a higher-risk trade. MELI can be volatile and is arguably already oversold with a four-week decline. Of course stocks can always get more oversold.

Trigger @ 74.75

- Suggested *Small* Positions -

Long DEC $72.50 PUT (MELI1222x72.5) entry $2.75

11/13/12 play triggered on gap down at $74.56. suggested trigger was $74.75

Entry on November 13 at $74.56
Average Daily Volume = 603 thousand
Listed on November 12, 2012


The Mosaic Co. - MOS - close: 50.75 change: -0.38

Stop Loss: 52.75
Target(s): 49.00
Current Option Gain/Loss: +61.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/13/12: Good news! MOS continues to weaken and shares are nearing our target. Plus, there is even better news if you're holding puts. Tonight after the closing bell MOS has lowered its Q2 production guidance due to weaker international demand. The stock was trading lower after hours near $48.50. Shares of MOS are likely to gap open lower tomorrow morning.

Previously I suggested we exit at $50.25. Based on tonight's headlines I am moving our exit target down to $49.00. We'll adjust the stop loss down to $52.75. Keep in mind if something happens and MOS does not hit our target we need to exit before November options expire after Friday.

- Suggested Positions -

Long NOV $55 PUT (MOS1217w55) entry $2.60

11/13/12 MOS has lowered guidance, adjust exit target to $49.00 and stop loss to $52.75
11/12/12 adjust target to $50.25
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


Vornado Realty - VNO - close: 75.54 change: -0.55

Stop Loss: 80.15
Target(s): 72.50
Current Option Gain/Loss: Dec75p: + 7.1% & 2013Jan$75p: + 7.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/13/12: VNO continues to sink and shares are now down five days in a row. I want to warn readers that VNO is short-term oversold and will likely see a bit of a bounce off the $75.00 level. Broken support at $78, $79 and $80 should all offer some overhead resistance. I am not suggesting new positions at this time.

- Suggested Positions -

Long DEC $75 PUT (VNO1222x75) entry $1.40*

- or -

Long 2013 Jan $75 PUT (VNO1319m75) entry $1.90*

11/12/12 trade opened on gap down at $76.89
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on November 12 at $76.89
Average Daily Volume = 1.1 million
Listed on November 10, 2012