Editor's Note:

Monday produced a strong follow through rally on Friday's intraday reversal.

DOV was triggered. We closed LUFK and sold half our CRS position. AVB, LVS, and WFM were stopped out.

Current Portfolio:


CALL Play Updates

Dover Corp - DOV - close: 62.98 change: +1.41

Stop Loss: 59.85
Target(s): 67.50
Current Option Gain/Loss: + 2.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/19/12: The market's widespread gains on Monday helped push DOV through resistance near $62.00. Our trigger was hit at $62.30 and the stock closed up +2.2% on the session.

- Suggested Positions -

Long 2013 Mar $65 call (DOV1316c65) entry $2.10

11/19/12 triggered @ 62.30

Entry on November 19 at $62.30
Average Daily Volume = 1.7 million
Listed on November 17, 2012


Netflix, Inc. - NFLX - close: 81.36 change: +0.46

Stop Loss: 78.20
Target(s): 89.75
Current Option Gain/Loss: - 27.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/19/12: I am pretty surprised by the lack of progress in NFLX today. The stock has a large amount of short interest and the sharp market rally higher today should have sparked some short covering. Instead NFLX the early morning gains faded but traders bought the dip near round-number support at $80.00. Consider today's lack of movement higher readers may want to exit positions or raise their stops. I am not suggesting new positions at this time.

Earlier Comments:
NFLX could see a short squeeze. The most recent data listed short interest at 31% of the 54.1 million share float. NFLX can be volatile so I am suggesting small positions to limit our risk.

- Suggested Positions -

Long DEC $85 call (NFLX1222L85) Entry $4.60

11/16/12 triggered @ 82.25

Entry on November 16 at $82.25
Average Daily Volume = 6.5 million
Listed on November 15, 2012


Pharmacyclics Inc. - PCYC - close: 52.69 change: +0.92

Stop Loss: 48.75
Target(s): 56.50
Current Option Gain/Loss: - 29.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/19/12: PCYC added +1.7% on the session but part of that was from the gap open higher. Shares opened at $52.21 and then struggled with the $53.40 area.

Earlier Comments:
I do consider this a more aggressive, higher-risk trade. Anytime you trade a biotech stock it can be a high-risk trade since you never know when a negative headline could send the stock crashing. Our target is $56.50. More aggressive traders could aim for the $59-60 zone instead.

- Suggested *Small* Positions -

long Dec $55 call (PCYC1222L55) entry $3.60

11/19/12 trade opened with PCYC's gap open higher @ 52.21

Entry on November 19 at $52.21
Average Daily Volume = 1.0 million
Listed on November 17, 2012


PUT Play Updates

Carpenter Tech. - CRS - close: 46.20 change: +1.00

Stop Loss: 48.05
Target(s): 42.50
Current Option Gain/Loss: + 4.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/19/12: We thought CRS look ready to bounce so we wanted to try and take some money off the table first thing this morning by selling half of our position. Unfortunately, CRS gapped open higher at $45.94, which definitely impacted our exit price. We still have half a position open. CRS could rebound up toward technical resistance at its 10-dma near $47.25. I am not suggesting new positions at this time.

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

11/19/12 sold half at the open. unfortunately CRS gapped open higher at $45.94
exit half @ 45.95, option @ $1.20 (+4.3%)
11/17/12 new stop loss @ 48.05, sell half of our position on Monday morning
11/14/12 new stop loss @ 49.05

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


Dow Jones Industrial Average (ETF) - DIA - close: 127.63 change: +2.03

Stop Loss: 128.15
Target(s): 125.25
Current Option Gain/Loss: -19.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/19/12: We warned readers to look for a bounce into the $127.50-128.00 zone. I am not suggesting new positions at this time.

- Suggested Positions -

long DEC $125 PUT (DIA1222x125) entry $1.79

11/17/12 new stop loss @ 128.15
11/14/12 new stop loss @ 129.15
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: 79.12 change: +1.64

Stop Loss: 80.15
Target(s): 75.50
Current Option Gain/Loss: -22.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
11/19/12: Just as we expected the small cap ETF bounced sharply. I warned readers to look for a bounce into the $78.50-80.00 zone. I am not suggesting new positions at this time.

- Suggested Positions -

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

11/17/12 the IWM looks poised to bounce
11/14/12 new stop loss @ 80.15
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


Lockheed Martin Corp. - LMT - close: 90.48 change: +2.02

Stop Loss: 90.65
Target(s): 84.25
Current Option Gain/Loss: -56.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/19/12: LMT produced a big bounce today. Shares rushed past the 200-dma and the $90.00 level and even closed above its 10-dma. If there is any follow through tomorrow the stock will likely hit our stop loss at $90.65.

Earlier Comments:
We do want to keep our position size small because LMT has produced a new breakdown on its daily chart but it has not yet broken below potential support on the weekly chart. It is possible the stock could bounce off the trend line displayed on the weekly chart but I doubt it given the market's broader weakness.

- Suggested *Small* Positions -

Long Dec $85 PUT (LMT1222x85) Entry $1.60

Entry on November 15 at $88.02
Average Daily Volume = 1.6 million
Listed on November 14, 2012


Vornado Realty - VNO - close: 74.36 change: +1.13

Stop Loss: 75.25
Target(s): 72.50
Current Option Gain/Loss: Dec75p: +21.4% & 2013Jan$75p: +21.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/19/12: There should be no surprise here. We have been expecting an oversold bounce in VNO. The stock gapped open higher and then drifted up to a +1.5% gain. Shares might fail at the $75.00 level or they might bounce to the 10-dma near $76.00. Currently our stop is at $75.25.

- Suggested Positions -

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

- or -

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

11/16/12 sold half of our position to lock in gains.
1/2 exit Dec $75 put @ $2.55 (+82.1%)
1/2 exit 2013 Jan $75 put @ $3.10 (+63.1%)
adjust the stop loss down to $75.25
11/15/12 SELL HALF of our positions to lock in gains tomorrow morning,
move the stop loss down to $76.25 for the rest
11/14/12 readers may want to start taking profits now
new stop loss @ 78.05
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


CLOSED BEARISH PLAYS

Avalonbay Communities - AVB - close: 129.97 change: +1.10

Stop Loss: 132.05
Target(s): 121.50
Current Option Gain/Loss: - 36.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
11/19/12: AVB spent most of the day churning sideways in the $129-131 zone. Yet it looks like shares of AVB saw a bad tick higher all the way up past $136.00. However, it was not a bad tick. It was a real trade. One lot of 100 shares on the EDGA exchange. One nanosecond AVB was at $130.11 on one exchange and the next moment it ticked to $136.64 on the EDGA and then back down to $133.24 somewhere else. That means our trade was technically stopped out whether it affected us or not. I would keep an eye on AVB for another entry point down the road since shares still look bearish.

- Suggested Positions -

DEC $125 PUT (AVB1222x125) entry $1.65 exit $1.05 (-36.3%)

11/19/12 stopped out @ 132.05 or 136.64 (see above)
11/14/12 triggered @ 129.75

chart:

Entry on November 14 at $129.75
Average Daily Volume = 593 thousand
Listed on November 13, 2012


Lufkin Industries - LUFK - close: 52.50 change: +2.41

Stop Loss: 51.55
Target(s): 45.15
Current Option Gain/Loss: -73.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/19/12: Over the weekend we decided it would be best to close our LUFK positions. The plan was to exit on Monday morning. Shares opened at $50.82.

- Suggested Positions -

Long DEC $45 PUT (LUFK1222x45) entry $1.50 exit $0.40 (-73.3%)

11/19/12 planned exit at the open
11/17/12 prepare to exit early on Monday morning
11/14/12 time to turn cautious. LUFK is not participating in the market weakness. new stop loss @ 51.55

chart:

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


Las Vegas Sands - LVS - close: 43.43 change: +1.16

Stop Loss: 44.05
Target(s): 36.50
Current Option Gain/Loss: Dec40p: -50.0% & Jan40p: -30.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
11/19/12: LVS gapped open higher this morning. It gapped open above $43.00, above its 10-dma and above its 100-dma. The stock rallied high enough to trade above the $44.00 level and hit our stop loss.

- Suggested Positions -

DEC $40 PUT (LVS1222x40) Entry $1.10 exit $0.55 (-50%)

- or -

2013 Jan $40 PUT (LVS1319m40) entry $1.65 exit $1.15 (-30.3%)

11/19/12 stopped out at $44.05
11/14/12 triggered @ 42.25

chart:

Entry on November 14 at $42.25
Average Daily Volume = 6.4 million
Listed on November 13, 2012


Whole Foods Market - WFM - close: 91.41 change: +0.87

Stop Loss: 91.05
Target(s): 82.50
Current Option Gain/Loss: - 54.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/19/12: As we feared the bounce in WFM continued and shares hit our stop loss at $91.05. At least the stock would have hit our stop at $91.05. Shares of WFM actually gapped open higher at $91.15 before pulling back to test its 200-dma and then bounce again. Our trade closed first thing this morning.

Earlier Comments:
I am suggesting small positions because it is possible that WFM could bounce on its long-term trend line but given the market's widespread weakness I am expecting new lows.

- Suggested *small* Positions -

DEC $87.50 PUT (WFM1222x87.5) entry $2.69 exit $1.22 (-54.6%)

11/19/12 stopped on gap open higher at $91.15
11/16/12 the bounce on Friday is very bad news for our put position and WFM will likely hit our stop on Monday

chart:

Entry on November 15 at $88.02
Average Daily Volume = 1.6 million
Listed on November 14, 2012