Editor's Note:

The stock market's euphoric bull-market fever may have just broken today. There were countless bearish reversals in the market today as investors decided to sell Ben Bernanke's testimony before congress. This doesn't mean the bull market is over but we might be poised for a little correction lower.

HBI and COV were stopped out today.
SIX was both triggered and stopped.
IWM was triggered.

We have been expecting the market to pullback one of these days and that's why we've been trying to cinch our stop losses higher. If the market sees any follow through on today's weakness we'll see more trades get stopped out.


Current Portfolio:


CALL Play Updates

Ecolab Inc. - ECL - close: 89.05 change: +0.97

Stop Loss: 87.95
Target(s): 98.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
05/22/13: Stocks reversed from their intraday highs and thankfully ECL did not participate in the market's rally this morning. Shares turned lower today and broke down under their 10-dma and the $88.00 level. if this weakness continues we might drop ECL as a candidate. Currently we are suggesting a trigger at $90.25. If triggered our target is $98.50.

I am encouraging traders to keep their position size small to limit risk since ECL does look a bit over extended here.

Trigger @ 90.25 *Small Positions*

- Suggested Positions -

buy the Jun $90 call (ECL1322F90)

Entry on May -- at $---.--
Average Daily Volume = 1.0 million
Listed on May 21 2013


Michael Kors - KORS - close: 60.46 change: -0.77

Stop Loss: 59.65
Target(s): 64.75
Current Option Gain/Loss: -16.1%
Time Frame: exit PRIOR to earnings on May 29th
New Positions: see below

Comments:
05/22/13: Watch out! It was a volatile session for KORS. The stock rallied to $63.03 this morning (a +2.9% move) only to reverse and give it all back and more. The stock fell back toward short-term support near $60.00 and its 10-dma.

I am raising our stop loss up to $59.65. More conservative traders may want to just exit immediately to limit any losses.

We have less than two weeks left on this trade. KORS is scheduled to report earnings on May 29th and we do not want to hold over the announcement.

- Suggested Positions -

Long Jun $62.50 call (KORS1322F62.5) entry $3.40

05/22/13 new stop loss @ 59.65
05/21/13 new stop loss @ 58.95
05/13/13 trade triggered on gap open higher at $61.55
trigger was $60.65

Entry on May 13 at $61.55
Average Daily Volume = 3.5 million
Listed on May 11 2013


Lockheed Martin - LMT - close: 106.49 change: -0.50

Stop Loss: 103.45
Target(s): 109.00
Current Option Gain/Loss: +152.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/22/13: Caution! This could be a short-term top with LMT pulling back from its intraday high near $108.00. I would not be surprised to see a dip back toward the $105.00 or even $104 levels. More conservative traders will want to seriously consider taking profits now.

- Suggested Positions -

Long Jun $105 call (LMT1322F105) Entry $0.85

05/18/13 new stop loss @ 103.45. More conservative traders may want to take profits now with the bid on our call at more than $2.00

Entry on May 15 at $103.05
Average Daily Volume = 1.7 million
Listed on May 14 2013


MEDNAX, Inc. - MD - close: 92.21 change: -1.19

Stop Loss: 90.75
Target(s): 98.50
Current Option Gain/Loss: -11.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/22/13: Warning! Today's session in MD has produced a bearish engulfing candlestick reversal pattern. Traders did buy the dip at the 10-dma this morning afternoon but MD could be poised for more short-term declines.

Right now we have a stop at $90.75. More aggressive traders will want to consider a stop loss below $90.00 instead.

Earlier Comments:
If triggered our target is $98.50. However, I am suggesting we keep our position size small. MD doesn't trade a lot of volume and the options do not see a lot of volume either.

*Small Positions* - Suggested Positions -

Long Jun $95 call (MD1322F95) entry $0.90

05/22/13 caution: today's session has created a bearish reversal candlestick pattern
05/20/13 new stop loss @ 90.75

Entry on May 14 at $91.15
Average Daily Volume = 242 thousand
Listed on May 11 2013


Martin Marietta Materials - MLM - close: 108.67 change: -3.31

Stop Loss: 107.45
Target(s): 118.50
Current Option Gain/Loss: -41.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/22/13: Ouch! MLM was a underperformer today. Traders quickly sold the spike higher this morning and MLM ended the session with a -2.9% decline. The breakdown below $110 and its 10-dma is short-term bearish. MLM almost hit our stop loss at $107.45. More conservative traders will want to seriously consider an early exit right here and now.

- Suggested Positions -

Long Jun $110 call (MLM1322F110) entry $3.10

05/22/13 caution: today's move looks like a bearish reversal.

Entry on May 16 at $110.25
Average Daily Volume = 378 thousand
Listed on May 15 2013


Occidental Petroleum - OXY - close: 91.10 change: -1.96

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: -28.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/22/13: OXY also saw some painful profit taking today with a -2.1% decline. Broken resistance at $92.00 should have offer some support but it failed. The next support level is $90.00. I am not suggesting new positions.

Earlier Comments:
On the weekly chart (see below) OXY has created a huge, inverse head-and-shoulders pattern, which is bullish. FYI: The Point & Figure chart for OXY is bullish with a $114 target.

- Suggested Positions -

Long Jun $92.50 call (OXY1322F92.5) entry $1.95

05/18/13 new stop loss @ 89.75

Entry on May 14 at $90.75
Average Daily Volume = 6.3 million
Listed on May 13 2013


Panera Bread Co. - PNRA - close: 189.66 change: -2.99

Stop Loss: 199.00
Target(s): 183.95
Current Option Gain/Loss: +11.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/22/13: Uh-oh! Today's profit taking in PNRA wasn't that bad with a -1.5% decline. Unfortunately today's move has painted a bearish engulfing candlestick reversal pattern. I suspect we could see PNRA retesting the $186-185 zone soon.

FYI: The Point & Figure chart for PNRA is bullish with a $234 target.

*Small Positions* - Suggested Positions -

Long Jun $190 call (PNRA1322F190) entry $3.60

Entry on May 20 at $187.00
Average Daily Volume = 558 thousand
Listed on May 18 2013


Western Digital - WDC - close: 60.40 change: -0.32

Stop Loss: 58.95
Target(s): 64.75
Current Option Gain/Loss: - 7.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/22/13: The action in WDC today is concerning with the pullback from its intraday highs. Is this a new short-term top? WDC should have support at its rising 10-dma (currently $59.29). More conservative traders might want to inch their stops higher. I am not suggesting new positions.

*small positions* - Suggested Positions -

Long Jun $60 call (WDC1322F60) entry $2.55

Entry on May 21 at $60.65
Average Daily Volume = 3.3 million
Listed on May 18 2013


Energy ETF - XLE - close: 82.15 change: -0.96

Stop Loss: 80.95
Target(s): 89.00
Current Option Gain/Loss: Jun85c: + 2.3% & Sep85c: +10.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/22/13: The energy sector hit some profit taking today with the XLE down -1.1% and also down two days in a row. This ETF looks like it will retest short-term technical support at its rising 10-dma soon (currently near $81.50). I am raising our stop loss up to $80.95. More aggressive traders will want to consider keeping their stop under the $80.00 mark because if the XLE breaks below its 10-dma the next support level should be $80.00.

- Suggested Positions -

Long Jun $85 call (XLE1322F85) entry $0.42

- or -

Long Sep $85 call (XLE1321i85) entry $1.80

05/22/13 new stop loss @ 80.95
05/20/13 new stop loss @ 80.50

Entry on May 17 at $81.55
Average Daily Volume = 13.0 million
Listed on May 14 2013


PUT Play Updates

Allergan Inc. - AGN - close: 97.73 change: -0.81

Stop Loss: 102.25
Target(s): 97.00
Current Option Gain/Loss: +89.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/22/13: AGN has finally broken through technical support at its simple 200-dma. The next stop should be its May 1st low of $96.77. Our exit target is $97.00. More aggressive traders may want to consider aiming lower.

- Suggested Positions -

Long Jun $100 PUT (AGN1322R100) entry $1.85

05/20/13 new stop loss @ 102.25, readers may want to take profits now
05/16/13 new stop loss @ 104.25, adjust exit target to $97.00

Entry on May 09 at $103.46
Average Daily Volume = 2.4 million
Listed on May 08 2013


iShares Russell 2000 - IWM - close: 97.78 change: -1.45

Stop Loss: 102.25
Target(s): 95.25
Current Option Gain/Loss: +71.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
05/22/13: Excellent news! The IWM performed is finally performing as expected. Shares traded up near round-number resistance at $100 and reversed. The intraday high was $100.38. Our trigger to buy puts was hit at $99.75. The small cap ETF closed lower with a -1.4% decline and a close below its simple 10-dma. Our target is $95.25.

Earlier Comments:
Readers may want to keep their position size small since this is a riskier entry point.

- Suggested Positions -

Long Jun $95 PUT (IWM1322R95) entry $0.60

05/22/13 triggered @ 99.75
05/21/13 added a secondary entry trigger at $98.75
05/18/13 adjust entry trigger to $99.75
adjust the stop loss to $102.25, adjust the exit target to $95.25.

Entry on May 22 at $99.75
Average Daily Volume = 41.8 million
Listed on May 16 2013


CLOSED BULLISH PLAYS

HanesBrands Inc. - HBI - close: 50.00 change: -0.89

Stop Loss: 50.40
Target(s): 54.75
Current Option Gain/Loss: -27.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/22/13: HBI's up trend could be in trouble here. The stock is down three days in a row. Shares broke below its 10-dma today and flirted with a breakdown below the $50.00 mark. Our stop loss was hit at $50.40.

- Suggested Positions -

Jun $50 call (HBI1322F50) entry $2.00 exit $1.45 (-27.5%)

05/22/13 stopped out
05/18/13 new stop loss @ 50.40
05/14/13 new stop loss @ 49.40

chart:

Entry on May 08 at $50.72
Average Daily Volume = 1.4 million
Listed on May 07 2013


Six Flags Entertainment - SIX - close: 78.58 change: -1.38

Stop Loss: 77.95
Target(s): 86.00
Current Option Gain/Loss: -58.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/22/13: It was not a good day for our new SIX trade. The stock followed the market higher this morning and broke out past resistance at $80.00 and hit our trigger to buy small call positions at $80.25. Then SIX followed the market lower and pierced short-term support at its 10-dma and the $78.00 level. The stock hit our stop loss at $77.95 just before the closing bell.

*Small Positions* - Suggested Positions -

Jun $80 call (SIX1322F80) entry $1.80 exit $0.75 (-58.3%)

05/22/13 stopped out at $77.95
05/22/13 triggered @ 80.25

chart:

Entry on May 22 at $80.25
Average Daily Volume = 418 thousand
Listed on May 20 2013


CLOSED BEARISH PLAYS

Covidien - COV - close: 65.25 change: -0.55

Stop Loss: 67.05
Target(s): 62.00
Current Option Gain/Loss: -58.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/22/13: Wow! What happened to COV today? This morning, before the bell, COV announced some clinical trial data that showed " that endoscopic ablation therapy using the Barrx™ RF Ablation System is effective at eliminating Barrett’s esophagus, a pre-cancerous condition of the esophagus, and preventing disease progression." This news appears to be the catalyst behind the morning spike higher. Shares of COV shot through multiple layers of resistance, hit our stop loss at $67.05 and then reversed to give back all of its gains and close at a new relative low.

Our trade is closed but more nimble traders may want to try again since COV still looks bearish at current levels.

- Suggested Positions -

Jun $65 PUT (COV1322R65) entry $1.20 exit $0.50 (-58.3%)

05/22/13 stopped out, COV spikes on news and then reverses

chart:

Entry on May 17 at $65.55
Average Daily Volume = 3.5 million
Listed on May 16 2013