Editor's Note:

After yesterday's painful decline the U.S. market managed a generally widespread bounce on Tuesday.

We closed our EVEP trade this morning.


Current Portfolio:


CALL Play Updates

Check Point Software Tech. - CHKP - close: 52.04 change: +0.10

Stop Loss: 50.75
Target(s): 54.50
Current Option Gain/Loss: +26.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/26/13: Tuesday proved to be a quiet session for CHKP with the stock hovering on either side of the $52.00 level. If the market sell-off continues CHKP will likely follow. More conservative traders may want to exit early now to avoid a loss. I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long Mar $50 call (CHKP1316c50) entry $1.90

02/25/13 market looks weak, readers may want to exit now
02/20/13 new stop loss @ 50.75
02/16/13 CHKP looks poised to dip back toward support at $50.00
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


Canadian Pacific Railway - CP - close: 117.75 change: +0.53

Stop Loss: 116.60
Target(s): 124.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/26/13: After spending most of the day inside the $116-118 zone shares of CP bounced off technical support at the 20-dma and produced a +0.4% gain. Overall I don't see any changes from my prior comments.

I am suggesting a trigger to buy calls at $120.25. Our short-term target is $124.75. More aggressive traders could aim higher.

FYI: On Friday CP announced a quarterly dividend of 35 cents (Canadian$) payable on April 29, 2013 to shareholders of record on March 28th.

Trigger @ 120.25

- Suggested Positions -

buy the Mar $120 call (MAR1316c120)

Entry on February -- at $---.--
Average Daily Volume = 795 thousand
Listed on February 23, 2012


McDonald's - MCD - close: 96.22 change: +0.08

Stop Loss: 93.25
Target(s): 99.75
Current Option Gain/Loss: +37.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/26/13: The bullish momentum in MCD stalled a bit and shares hovered above the $96.00 level today. Readers may want to wait for a dip near the 10-dma or the $95.00 level as our next bullish entry point.

FYI: The Point & Figure chart for MCD is bullish with a $115 target.

- Suggested *Small* Positions -

Long Apr $95 call (MCD1320d95) entry $1.66

Entry on February 25 at $95.38
Average Daily Volume = 4.9 million
Listed on February 23, 2012


CBOE Volatility Index - VIX - close: 16.87 change: -2.12

Stop Loss: 11.45
Target(s): 19.90
Current Option Gain/Loss: +28.9%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
02/26/13: A widespread bounce in stocks today sparked a pullback in the VIX. The volatility index gave back -11% following yesterday's +34% gain. I am not suggesting new positions at this time.

- Suggested Positions -

Long Apr $16 call (VIX1317D16) entry $1.90

02/25/13 adjust exit target to 19.90

Entry on February 10 at $13.37
Average Daily Volume = n/a
Listed on February 09, 2012


PUT Play Updates

Capital One Financial - COF - close: 50.80 change: -1.48

Stop Loss: 54.55
Target(s): 48.50
Current Option Gain/Loss: +42.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/26/13: COF outperformed many of its peers in the financial sector with a +1.3% bounce. Broken support near $52.00 should be new short-term overhead resistance. I am not suggesting new positions at this time.

- Suggested Positions - *Small Positions*

Long Mar $52.50 PUT (COF1316o52.5) entry $1.23

02/23/13 be careful here. COF is holding support at the $52 level. Shares could be poised to bounce.

Entry on February 20 at $52.25
Average Daily Volume = 5.9 million
Listed on February 19, 2012


Fossil, Inc. - FOSL - close: 100.31 change: +1.66

Stop Loss: 103.30
Target(s): 93.25
Current Option Gain/Loss: -18.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/26/13: There was no follow through on yesterday's bearish breakdown in FOSL. The stock did dip to a new relative low at $98.10 but then bounced back above the $100 mark. Shares outperformed the market's major indices with a +1.6% gain.

Due to FOSL's gap higher this morning the option gapped lower.

I would be cautious here. Wait for a new drop below $99.50 before launching new bearish positions.

- Suggested Positions -

Long Mar $95 PUT (FOSL1316o95) entry $1.60

Entry on February 26 at $ 99.21
Average Daily Volume = 1.1 million
Listed on February 25, 2012


Monsanto Company - MON - close: 99.20 change: +1.11

Stop Loss: 100.65
Target(s): 92.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/26/13: MON bounced off support near $98.00 and recouped about two thirds of yesterday's decline. Shares do remain below what should be resistance near $100.00. There is no change from my prior comments.

Last week's low was $97.90. I am suggesting a trigger to buy puts at $97.80. If triggered our target is $92.50.

Trigger @ 97.80

- Suggested Positions -

buy the Mar $95 PUT (MON1316o95)

Entry on February -- at $---.--
Average Daily Volume = 2.5 million
Listed on February 25, 2012


Time Warner Cable Inc. - TWC - close: 86.46 change: +0.50

Stop Loss: 86.30
Target(s): 80.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/26/13: TWC began trading ex-dividend this morning. The company paid a 65-cent cash dividend. Shares proceeded to bounce off their morning lows.

I am suggesting we launch small bearish positions at $84.50. If triggered our short-term target is $80.25. We do want to keep our position size small because TWC is arguably already oversold.

Trigger @ 84.50 *Small Positions*

- Suggested Positions -

buy the Mar $82.50 PUT (TWC1316o82.5)

Entry on February -- at $---.--
Average Daily Volume = 3.6 million
Listed on February 21, 2012


CLOSED BEARISH PLAYS

EV Energy Partners - EVEP - close: 57.13 change: +2.02

Stop Loss: 56.15
Target(s): 50.50
Current Option Gain/Loss: -26.0%
Time Frame: exit prior to earnings on Mar 1st.
New Positions: see below

Comments:
02/26/13: EVEP has not been cooperating with our bearish plans on the stock. Last night we decided to exit early at the open this morning. Shares opened at $55.30 and then soared to a +3.6% gain.

- Suggested Positions -

Mar $55 put (EVEP1316o55) entry $3.65 exit $2.70 (-26.0%)

02/26/13 early exit as planned
02/25/13 prepare to exit at the opening bell tomorrow
02/23/13 new stop loss @ 56.15, prepare to exit on Feb. 28th or sooner.

chart:

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