Editor's Note:

The S&P 500 tagged another new high and the small cap Russell 2000 index hit another new all-time high today.

Most of the market was up today. We closed our SPW trade as planned. I am suggesting we exit our SBUX trade tomorrow. The BPT trade has been triggered.


Current Portfolio:


CALL Play Updates

BP Prudhoe Bay Royalty Trust - BPT - close: 80.59 change: +0.86

Stop Loss: 78.25
Target(s): 87.50
Current Option Gain/Loss: -10.0%
Time Frame: Exit prior to earnings in early March
New Positions: see below

Comments:
02/13/13: After weeks of consolidating sideways below resistance at the $80.00 level shares of BPT have finally broken out higher. The stock hit our trigger to buy calls at $80.25. FYI: The Point & Figure chart for BPT is bullish with a $110 target.

*Small Positions* - Suggested Positions -

Long Mar $80 call (BPT1316c80) entry $2.00

Entry on February 13 at $80.25
Average Daily Volume = 131 thousand
Listed on February 07, 2012


Check Point Software Tech. - CHKP - close: 51.43 change: -0.34

Stop Loss: 49.90
Target(s): 54.50
Current Option Gain/Loss: +13.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/13/13: Last night President Obama signed an executive action to increase the country's cyber security efforts. The move failed to have much impact on shares of CHKP. The stock briefly spiked above the $52.00 level and reversed. I am not suggesting new positions at this time. We will adjust our stop loss to $49.90.

*Small Positions* - Suggested Positions -

Long Mar $50 call (CHKP1316c50) entry $1.90

02/13/13 new stop loss @ 49.90
02/06/13 new stop loss @ 49.40

Entry on February 01 at $50.25
Average Daily Volume = 2.7 million
Listed on January 31, 2012


The Cooper Companies - COO - close: 104.25 change: -0.36

Stop Loss: 99.90
Target(s): 107.50
Current Option Gain/Loss: + 1.8%
Time Frame: Exit prior to earnings on Mar. 7th
New Positions: see below

Comments:
02/13/13: COO spiked to a new high at $105.75 and then reversed. Today's relative weakness is a little bit troubling. Readers may want to raise their stop loss.

Earlier Comments:
Please note that we do want to keep our position size small because the option spreads are a little bit wide. COO is scheduled to report earnings on March 7th. We do not want to hold over the report. FYI: The Point & Figure chart for COO is bullish with a $125 target.

*Small Positions* - Suggested Positions -

Long Mar $105 call (COO1316c105) entry $2.70

Entry on February 06 at $102.60
Average Daily Volume = 303 thousand
Listed on February 02, 2012


The Home Depot - HD - close: 67.45 change: +0.13

Stop Loss: 65.80
Target(s): 69.90
Current Option Gain/Loss: -15.1%
Time Frame: Exit prior to earnings on Feb. 26th
New Positions: see below

Comments:
02/13/13: Hmm... there wasn't much follow through on yesterday's bounce. HD opened at $67.52 and then churned sideways the rest of the session. I would still consider new positions here but readers may want to start with a smaller position size to limit risk.

Earlier Comments:
We plan to exit prior to the company's earnings report on Feb. 26th.

- Suggested Positions -

Long Mar $70 call (HD1316c70) entry $0.66

Entry on February 13 at $67.52
Average Daily Volume = 5.9 million
Listed on February 12, 2012


Lumber Liquidators - LL - close: 62.94 change: +0.69

Stop Loss: 59.45
Target(s): 66.00
Current Option Gain/Loss: +25.8%
Time Frame: Exit PRIOR to earnings on Feb. 20th
New Positions: see below

Comments:
02/13/13: The rally continues for LL. The stock added +1.1% and posted its fifth gain in a row. I am raising our stop loss to $59.45.

Earlier Comments:
We do not want to hold over the Feb. 20th earnings report. Shares could see a short squeeze. The most recent data listed short interest at 22% of the very small 23.9 million share float. FYI: The P&F chart is bullish with a $74 target.

- Suggested Positions -

Long Mar $65 call (LL1316c65) entry $1.55

02/13/13 new stop loss @ 59.45

Entry on February 12 at $61.36
Average Daily Volume = 568 thousand
Listed on February 11, 2012


Mohawk Industries - MHK - close: 107.57 change: +1.19

Stop Loss: 101.85
Target(s): 109.75
Current Option Gain/Loss: +23.2%
Time Frame: Exit PRIOR to earnings on Feb. 21st
New Positions: Yes, see below

Comments:
02/13/13: MHK continues to show relative strength. The stock added +1.1% and posted its fourth gain in a row.

Earlier Comments:
We do not want to hold over the Feb. 21st earnings report.

- Suggested Positions -

Long Mar $105 call (MHK1316c105) entry $3.65

Entry on February 12 at $105.35
Average Daily Volume = 588 thousand
Listed on February 11, 2012


3M Company - MMM - close: 102.86 change: +0.04

Stop Loss: 100.70
Target(s): 106.50
Current Option Gain/Loss: +20.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/13/13: MMM began trading ex-dividend today. We were expecting a gap down of about 63 cents. Shares only gapped down about 43 cents. MMM spent the rest of the day drifting sideways. If this dip continues look for support near $102.00 and the simple 10-dma.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk.

- Suggested Positions -

long Mar $100 call (MMM1316c100) entry $2.95

Entry on February 06 at $102.25
Average Daily Volume = 3.0 million
Listed on February 05, 2012


Rock-Tenn Company - RKT - close: 82.42 change: -0.02

Stop Loss: 79.45
Target(s): 84.85
Current Option Gain/Loss: +11.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/13/13: Wednesday was a quiet day for RKT. The stock churned sideways and closed virtually unchanged. There is no change from my prior comments. We are aiming for $84.85. More aggressive traders could aim higher.

Earlier Comments:
FYI: The Point & Figure chart for RKT is bullish with a long-term $117 target.

- Suggested Positions -

Long Mar $80 call (RKT1316c80) entry $3.05

Entry on February 06 at $81.05
Average Daily Volume = 743 thousand
Listed on February 02, 2012


Starbucks Corp. - SBUX - close: 55.83 change: -0.43

Stop Loss: 54.75
Target(s): 59.85
Current Option Gain/Loss: - 20.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/13/13: We are growing concerned with the lack of upward momentum in shares of SBUX. The stock has been underperforming the market these last few days. Bigger picture the trend is still bullish and this is probably just another sideways consolidation. However, we want to be more defensive here.

I am suggesting we abandon positions and exit early tomorrow morning at the opening bell.

- Suggested Positions -

Long Mar $55 call (SBUX1316c55) entry $2.51

02/13/14 SBUX is not performing. We want to exit early tomorrow morning

Entry on February 01 at $56.57
Average Daily Volume = 6.8 million
Listed on January 30, 2012


CBOE Volatility Index - VIX - close: 12.98 change: +0.34

Stop Loss: 11.45
Target(s): 22.00-25.00 range
Current Option Gain/Loss: -15.7%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
02/13/13: The VIX saw a little bounce today, effectively erasing yesterday's drop. I don't see any changes from my prior comments. Traders could buy call options now. Or you could wait and consider an alternative entry point for VIX calls. One idea would be to wait for the S&P 500 index to close below its simple 10-dma again and then buy puts on the VIX.

- Suggested Positions -

Long Apr $16 call (VIX1317D16) entry $1.90

Entry on February -- at $---.--
Average Daily Volume = n/a
Listed on February 09, 2012


Zimmer Holdings - ZMH - close: 76.00 change: +0.56

Stop Loss: 73.40
Target(s): 79.50
Current Option Gain/Loss: +18.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/13/13: Shares of ZMH were upgraded to a "buy" this morning. The news helped push ZMH past resistance at the $76.00 level. Yet shares pared their gains and fell back to this level of resistance by the closing bell. I am not suggesting new positions at this time.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk. FYI: The Point & Figure chart for ZMH is bullish with a long-term $89 target.

- Suggested Positions - *small positions*

Long Mar $75 call (ZMH1316c75) entry $1.60

02/09/13 new stop loss @ 73.40

Entry on February 07 at $75.24
Average Daily Volume = 1.2 million
Listed on February 06, 2012


PUT Play Updates

EV Energy Partners - EVEP - close: 55.56 change: +0.06

Stop Loss: 57.25
Target(s): 50.50
Current Option Gain/Loss: -19.1%
Time Frame: exit prior to earnings on Feb. 27
New Positions: see below

Comments:
02/13/13: EVEP saw an early morning bounce but shares faded from yesterday's high. The stock spent the rest of the session drifting lower. I would wait for a new drop below $54.75 before initiating new bearish positions.

- Suggested Positions -

Long Mar $55 put (EVEP1316o55) entry $3.65

Entry on February 11 at $54.75
Average Daily Volume = 300 thousand
Listed on February 09, 2012


Blue Nile Inc. - NILE - close: 30.30 change: -0.67

Stop Loss: 32.15
Target(s): 27.00
Current Option Gain/Loss: -29.7%
Time Frame: To be determined (see below)
New Positions: see below

Comments:
02/13/13: As expected it was a volatile session for NILE but not as bad as it could have been. Shares gapped open lower and hit $28.90 intraday. The stock did see a sharp intraday rebound but eventually settled with a -2.1% decline. I am not suggesting new positions at this time. We will lower our stop loss down to $32.15.

Earlier Comments:
We want to keep our position size small to limit our risk.

*Small Positions* - Suggested Positions -

Long Mar $30 PUT (NILE1316o30) entry $1.85

02/13/13 new stop loss @ 32.15
02/11/13 more conservative traders will want to exit prior to the earnings announcement tomorrow after the closing bell. We have decided to hold the position over the report. Please note our new stop loss at $33.05 and our target at $27.00.

Entry on February 07 at $31.45
Average Daily Volume = 319 thousand
Listed on February 06, 2012


SBA Communications - SBAC - close: 67.45 change: -0.82

Stop Loss: 70.05
Target(s): 63.50
Current Option Gain/Loss: + 8.3%
Time Frame: Exit prior to earnings on Feb. 21
New Positions: see below

Comments:
02/13/13: The weakness in SBAC continues. The stock was weak right at the open and quickly fell toward the $67.00 level. Shares churned sideways midday and produced an afternoon bounce back toward its 100-dma.

Earlier Comments:
Our target is $63.50 although more conservative traders may want to exit near $65.00. Bear in mind that we will exit before the company's earnings report on Feb. 21st if SBAC has not hit our exit by then.

- Suggested Positions -

Long Mar $65 PUT (SBAC1316o65) entry $0.60

Entry on February 13 at $68.21
Average Daily Volume = 131 thousand
Listed on February 12, 2012


CLOSED BULLISH PLAYS

SPX Corp. - SPW - close: 75.89 change: -0.34

Stop Loss: 74.75
Target(s): 78.00
Current Option Gain/Loss: +61.5%
Time Frame: Exit prior to earnings on Feb. 14th
New Positions: see below

Comments:
02/13/13: SPW showed a little bit of volatility today. There was an early morning spike higher, hitting a new multi-month high. Unfortunately the rally didn't last. SPW reversed and fell to short-term technical support at its 10-dma before paring its losses.

Our plan was to exit positions at the closing bell today to avoid holding over the company's earnings announcement tomorrow.

- Suggested Positions -

Feb $75 call (SPW1316B75) entry $1.30 exit $2.10 (+61.5%)

02/13/13 scheduled exit at the close
02/12/13 new stop loss @ 74.75, prepare to exit tomorrow at the closing bell
02/06/13 new stop loss @ 73.95
01/30/13 new stop loss @ 73.75
01/29/13 new stop loss @ 71.95, adjust exit to $78.00
readers may want to just take profits right now
01/28/13 new stop loss @ 71.40

chart:

Entry on January 23 at $72.42
Average Daily Volume = 832 thousand
Listed on January 22, 2012