Editor's Note:

Thursday produced a volatile market as traders reacted to every headline regarding the fiscal cliff. Comments from Senate Majority Leader Mr. Reid suggesting that the nation would go over the cliff fueled the market's sell-off. Then stocks reversed higher on news that congress would meet again this Sunday in a last minute effort to try and get a deal done before the year ends.

AMG, AMT, DDD, and WPI were stopped out. We closed ENR. SOHU hit our entry trigger.

Current Portfolio:


CALL Play Updates

Akamai Tech. - AKAM - close: 41.03 change: -0.22

Stop Loss: 39.95
Target(s): 44.90
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/27/12: I have been suggesting that nimble traders could buy calls on a dip near $40.00 since $40 should be support. Well you got your chance today with a dip to $40.27 before AKAM rebounded.

Currently I am suggesting we buy calls when AKAM hits $42.05. If triggered our target is $44.90. More aggressive traders could aim higher. FYI: The Point & Figure chart for AKAM is bullish with a $54 target.

Trigger @ 42.05

- Suggested Positions -

buy the 2013 Jan $45 call (AKAM1319a45)

Entry on December xx at $ xx.xx
Average Daily Volume = 3.1 million
Listed on December 22, 2012


Canadian Pacific Railway - CP - close: 101.66 change: +0.48

Stop Loss: 99.40
Target(s): 109.00
Current Option Gain/Loss: - 40.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: CP found support near $100 as expected and bounced back into positive territory. If both CP and the S&P 500 open positive tomorrow then readers could use this bounce as a new bullish entry point.

Our plan was to use small positions to limit our risk.

NOTE: CP will begin trading ex-dividend on Dec. 26, 2012. The quarterly cash dividend should be about 35.5 cents.

- Suggested *SMALL* Positions -

Long Jan $105 call (CP1319a105) entry $1.25

12/21/12 trade opened on gap down at $101.46

Entry on December 21 at $101.46
Average Daily Volume = 961 thousand
Listed on December 20, 2012


Flowserve Corp. - FLS - close: 145.10 change: +1.50

Stop Loss: 141.85
Target(s): 148.50
Current Option Gain/Loss: +11.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: It was a volatile day for FLS. The stock produced a two-dollar swing three times today. FLS did manage to show a little strength with a +1.0% gain on the session. I am not suggesting new positions at current levels. FYI: The Point & Figure chart for FLS is bullish with a $153 target.

NOTE: FLS should begin trading ex-dividend on Dec. 27th. The quarterly cash dividend should be about 36 cents.

- Suggested Positions -

Long 2013 Jan $145 call (FLS1319a145) Entry $2.70

12/20/12 new stop loss @ 141.85
12/18/12 new stop loss @ 139.95

Entry on December 05 at $141.50
Average Daily Volume = 518 thousand
Listed on December 04, 2012


Green Mountain Coffee Roasters - GMCR - close: 41.40 change: -0.28

Stop Loss: 39.20
Target(s): 47.50
Current Option Gain/Loss: -42.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27/12: GMCR is still holding up reasonably well considering the market's weakness today. The stock remains above short-term support at its simple 10-dma.

Earlier Comments:
GMCR could see a short squeeze. The most recent data listed short interest at 43% of GMCR's 120 million share float. The $45.00 could be round-number resistance but we will target a move to $47.50. GMCR can be a very volatile stock. I do consider this a more aggressive, higher-risk trade. Let's keep our position size small to limit our risk.

(small positions) - Suggested Positions -

Long 2013 Jan $45 call (GMCR1319a45) entry $1.18

Entry on December 19 at $41.35
Average Daily Volume = 8.3 million
Listed on December 18, 2012


iShares Russell 2000 - IWM - close: 83.12 change: -0.06

Stop Loss: 81.95
Target(s): 86.00
Current Option Gain/Loss: - 5.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27/12: The small cap index and ETF also turned in a volatile session. The IWM dipped to short-term support near $82 and its 100-dma before bouncing back to close almost unchanged on the session. I am not suggesting new positions at this time.

- Suggested Positions -

buy the 2013 Jan $84 call (IWM1319a84) entry $1.17

12/18/12 new stop loss @ 81.95
12/11/12 triggered on the gap open higher at $83.11 (trigger was 82.85)

Entry on December 11 at $83.11
Average Daily Volume = 38 million
Listed on December 10, 2012


Linkedin Corp. - LNKD - close: 114.03 change: -0.93

Stop Loss: 111.40
Target(s): 119.00
Current Option Gain/Loss: - 3.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: LNKD is pulling back toward recent support near $112.00. More conservative traders may want to adjust their stops so it's closer to the $112.00 level. I am not suggesting new positions at current levels.

Earlier Comments:
LNKD can be volatile so I would use small positions to limit our risk.

*Small Positions* - Suggested Positions -

Long Jan $115 call (LNKD1319a115) Entry $3.10

12/18/12 new stop loss @ 111.40
12/17/12 adjust exit target to $119.00
12/15/12 new stop loss @ $109.00

Entry on December 10 at $110.25
Average Daily Volume = 1.8 million
Listed on December 08, 2012


Monsanto Co. - MON - close: 93.99 change: -0.11

Stop Loss: 89.95
Target(s): 99.50
Current Option Gain/Loss: + 29.6%
Time Frame: exit prior to Jan 8th.
New Positions: see below

Comments:
12/27/12: Traders were in a buy-the-dip mood with MON. They bought the stock twice near the $92.75 level. MON almost made it back to unchanged on the session. If both MON and the S&P 500 index open positive tomorrow then readers could use today's afternoon bounce as a new entry point.

Our plan was to keep our position size small. NOTE: This is a short-term trade. We do not want to hold over the January 8th earnings report.

*Small Positions*

- Suggested Positions -

Long 2013 Jan $95 call (MON1319a95) entry $1.25

12/24/12 triggered @ 93.05

Entry on December 24 at $93.05
Average Daily Volume = 2.2 million
Listed on December 19, 2012


Sohu.com - SOHU - close: 45.16 change: +0.54

Stop Loss: 42.95
Target(s): 49.75
Current Option Gain/Loss: - 7.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: SOHU spent almost the entire day drifting sideways in a narrow range. Then in the last hour SOHU started to rally and closed with a +1.2% gain. This late day rally also hit our trigger to buy calls at $45.20.

Earlier Comments:
SOHU can be a volatile stock so we want to limit our position size to reduce our risk. If triggered our target is $49.75. More aggressive traders may want to aim higher since SOHU seems to have built a decent bottom over the last several months. With enough time you could aim for the $55-60 zone. FYI: The Point & Figure chart for SOHU is bullish with a $66 target.

- Suggested Positions -

Long Feb $47.50 call (SOHU1316b47.5) entry $2.05

Entry on December 27 at $45.20
Average Daily Volume = 606 thousand
Listed on December 26, 2012


Vulcan Materials - VMC - close: 51.70 change: -1.11

Stop Loss: 50.85
Target(s): 58.50
Current Option Gain/Loss: -78.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: The widespread market decline weighed heavily on shares of VMC and the stock posted a -2.1% drop. There should be short-term support at both the $51.00 level and the $50.00 level. We have a stop loss at $50.85. More aggressive traders may want to adjust their stop loss so it's under the $50.00 mark instead. I am not suggesting new positions at current levels.

Earlier Comments:
Our target is $58.50. The $60.00 level looks like resistance. FYI: The Point & Figure chart for VMC is bullish with a long-term $70 target.

- Suggested Positions -

Long 2013 Jan $55 call (VMC1319a55) entry $1.15

Entry on December 18 at $53.00
Average Daily Volume = 870 thousand
Listed on December 17, 2012


PUT Play Updates

Tiffany & Co - TIF - close: 57.03 change: +0.35

Stop Loss: 58.75
Target(s): 52.00
Current Option Gain/Loss: -12.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27/12: The stock market's volatile session was evident in the retailers. TIF spiked lower, traded beneath the $56.00 level and then followed the market higher with an afternoon rebound. Wait for this bounce to rollover before initiating positions. There should be short-term resistance near $58.00.

- Suggested Positions -

Long 2013Jan $55 PUT (TIF1319m55) entry $1.08

Entry on December 27 at $56.67
Average Daily Volume = 2.4 million
Listed on December 26, 2012


CLOSED BULLISH PLAYS

Affiliated Managers Group - AMG - close: 128.83 change: -0.83

Stop Loss: 128.95
Target(s): 139.00
Current Option Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/27/12: The stock market's widespread decline today pushed AMG to its simple 50-dma before bouncing. Our stop loss at $128.95 was hit along the way. Our trade closed with our position at unchanged (+0.0%).

- Suggested *SMALL* Positions -

March $135 call (AMG1316c135) entry $2.10 exit $2.10 (-00.0%)

12/27/12 stopped out
12/22/12 adjust stop loss to $128.95
12/21/12 trade opened on gap down at $130.54

chart:

Entry on December 21 at $13.54
Average Daily Volume = 271 thousand
Listed on December 20, 2012


American Tower Corp. - AMT - close: 76.29 change: -0.00

Stop Loss: 75.40
Target(s): 79.85 & 82.00
Current Option Gain/Loss: -71.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: AMT broke down under support near $76.00, dipped to $75.35, and then bounced back to close unchanged on the session. Our stop was hit at $75.40.

- Suggested Positions -

2013 Jan $77.50 call (AMT1319a77.5) entry $1.30* exit $0.37 (-71.5%)

12/27/12 stopped out
*option entry price is an estimate since the option did not trade at the time our play was closed.

chart:

Entry on December 18 at $77.05
Average Daily Volume = 1.7 million
Listed on December 15, 2012


3D Systems - DDD - close: 50.60 change: -1.25

Stop Loss: 48.95
Target(s): 58.50
Current Option Gain/Loss: -52.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: DDD displayed some relative weakness today. The market's widespread decline helped push DDD to a -6.4% plunge intraday. The stock reversed off the $48.50 level and bounce back to close above the $50 mark. Our stop loss was hit at $48.95.

The larger trend for DDD remains higher. I would keep an eye on it.

- Suggested Positions -

FEB $55 call (DDD1316b55) entry $2.75* exit $1.30 (-52.7%)

12/27/12 stopped out
12/24/12 triggered @ 52.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on December xx at $ xx.xx
Average Daily Volume = 1.9 million
Listed on December 22, 2012


Energizer Holdings - ENR - close: 79.61 change: +0.03

Stop Loss: 79.40
Target(s): 84.50
Current Option Gain/Loss: -84.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: ENR has been acting weak. Last night we decided to close positions at the open today. ENR opened at $79.57.

- Suggested Positions -

2013 Jan $85 call (ENR1319a85) entry $0.90 exit $0.14 (-84.4%)

12/27/12 closed this morning
12/26/12 ENR is not working, prepare to exit tomorrow morning
12/15/12 new stop loss @ 79.40

chart:

Entry on December 07 at $80.76
Average Daily Volume = 784 thousand
Listed on December 06, 2012


Watson Pharma. - WPI - close: 89.21 change: -0.28

Stop Loss: 88.20
Target(s): 94.85
Current Option Gain/Loss: -62.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27/12: The widespread market declines pushed WPI under short-term support and hit our stop loss at $88.20 before bouncing back.

- Suggested Positions -

Long 2013 Jan $90 call (WPI1319a90) entry $2.00* exit $0.75 (-62.5%)
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on December 19 at $90.50
Average Daily Volume = 730 thousand
Listed on December 18, 2012