Editor's Note:

France lost its AAA rating from Moody's last night. S&P had already downgraded the country back in January. Meanwhile Fed Chairman Bernanke suggested there is little the Fed could do if congress doesn't solve the fiscal cliff issue but if they did then 2013 could be a strong year. Elsewhere Goldman Sachs warned the market could see another -8% plunge. Traders were nervous today and probably looking forward to the upcoming holiday.

DDS and ORLY were triggered.

Current Portfolio:


CALL Play Updates

Dillard's Inc. - DDS - close: 85.63 change: +0.73

Stop Loss: 82.75
Target(s): 89.75
Current Option Gain/Loss: + 4.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/20/12: Our new play on DDS has been triggered. Shares added +0.8% and look poised to hit new multi-year highs. Our target is $89.75.

- Suggested Positions -

Long Dec $90 call (DDS1222L90) entry $1.05

Entry on November 20 at $85.05
Average Daily Volume = 489 thousand
Listed on November 19, 2012


Dover Corp - DOV - close: 63.12 change: +0.14

Stop Loss: 59.85
Target(s): 67.50
Current Option Gain/Loss: + 4.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/20/12: The rally in DOV paused on Tuesday with shares chopping sideways. Readers may want to wait for a dip back toward $62.00 as a new entry point.

- 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: 82.40 change: +1.04

Stop Loss: 79.25
Target(s): 89.75
Current Option Gain/Loss: - 18.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/20/12: NFLX is slowly working its way higher and tagged a new multi-week high intraday. I remain cautiously bullish here. We're still waiting for the temporary short squeeze to show up. Please note that I am raising the stop loss to $79.25.

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

11/20/12 new stop loss @ 79.25
11/16/12 triggered @ 82.25

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


O'Reilly Automotive - ORLY - close: 91.37 change: -0.11

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: -18.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/20/12: It was a cowardly session for ORLY bulls. The stock danced across resistance at $92.00 this morning only to see the stock retreat again. Our trade was opened at $92.05. I would wait for a new rally past $92.00 before considering new bullish positions. Our target is $95.75 but more aggressive traders may want to aim for the $99-100 zone instead.

- Suggested Positions -

Long DEC $95 call (ORLY1222L95) entry $1.90

Entry on November 20 at $92.05
Average Daily Volume = 1.8 million
Listed on November 19, 2012


Pharmacyclics Inc. - PCYC - close: 51.82 change: -0.87

Stop Loss: 49.65
Target(s): 56.50
Current Option Gain/Loss: - 45.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/20/12: Hmm... the relative weakness in PCYC today could be a warning signal. Readers may want to scale back positions. I am raising our stop loss to $49.65.

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

11/20/12 new stop loss @ 49.65
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: 45.73 change: -0.47

Stop Loss: 48.05
Target(s): 42.50
Current Option Gain/Loss: +13.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/20/12: Tuesday proved to be a quiet session for CRS. The stock churned sideways near the $46 level most of the day.

We still have half a position open. 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: 127.71 change: +0.08

Stop Loss: 128.15
Target(s): 125.25
Current Option Gain/Loss: -26.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/20/12: The stock market faltered midday but managed to claw its way higher the rest of the afternoon. The DIA is still hovering just under resistance at $128.00. 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: 79.26 change: +0.14

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:
11/20/12: The small cap ETF churned sideways as investors digested news of France's credit downgrade and Ben Bernanke's comments about the fiscal cliff today. 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: 90.18 change: -0.30

Stop Loss: 90.65
Target(s): 84.25
Current Option Gain/Loss: -50.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/20/12: Lack of follow through on yesterday's big bounce in LMT is somewhat encouraging. Yet our trade remains in trouble here. LMT rebounded sharply from its midday lows and looks poised to rally tomorrow, which will likely see the stock hit our stop loss at $90.65. Readers may want to abandon ship.

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: 74.77 change: +0.41

Stop Loss: 75.25
Target(s): 72.50
Current Option Gain/Loss: Dec75p: + 3.5% & 2013Jan$75p: +10.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/20/12: The oversold bounce in VNO continues. It looks like the stock may hit our stop loss at $75.25 before it hits potential resistance at the simple 10-dma (75.50). More aggressive traders may want to adjust their stop loss appropriately. I am not suggesting new positions.

- 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