Editor's Note:

Stocks continue to slip with their worst start for the year since 2005.

Our plan was to exit the AON, DISCA, and UPS trades at the opening bell this morning. LYB hit our stop loss. DWRE and PANW hit our entry triggers.

We want to exit our TSCO trade tomorrow morning.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 111.80 change: -1.08

Stop Loss: 108.75
Target(s): 117.50
Current Option Gain/Loss: - 2.5%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
01/06/14: AAP was not immune to the market's widespread decline but shares did underperform today with a -0.95% decline. This follows yesterday's outperformance. AAP should have support in the $110-111 area.

Earlier Comments:
Our short-term target is $117.50. Longer-term traders may want to aim higher since the Point & Figure chart for AAP is bullish with a $140 target.

- Suggested Positions -

Long Mar $115 call (AAP1422c110) entry $3.90*

01/04/14 new stop loss @ 108.75
12/24/13 triggered @ 110.65
*option entry price is an estimate since the option did not trade at the time our play was opened.
12/21/13 adjust the option strike from the January $110 to the March $115 call

Entry on December 24 at $110.65
Average Daily Volume = 923 thousand
Listed on December 14, 2013


Chicago Bridge & Iron - CBI - close: 80.40 change: -0.83

Stop Loss: 79.65
Target(s): 89.50
Current Option Gain/Loss: -17.7%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
01/06/14: CBI posted its third decline in a row and as expected the stock tested round-number support at the $80.00 mark. This is an important test. A breakdown here could jeopardize the up trend. I see this dip as an entry point however traders may want to look for a bounce above $80.80 or above the 10-dma at $81.73 before launching new positions.

Earlier Comments:
Our target is $89.50. We want to exit prior to CBI's earnings report in February.

- Suggested Positions -

Long April $85 call (CBI1419D85) entry $3.10

12/28/13 new stop loss @ 79.65

Entry on December 19 at $80.35
Average Daily Volume = 1.5 million
Listed on December 18, 2013


Check Point Software - CHKP - close: 63.92 change: -0.37

Stop Loss: 63.35
Target(s): 69.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on January 28th
New Positions: Yes, see below

Comments:
01/06/14: The rally attempt this morning didn't last very long and CHKP failed under resistance at the $65.00 level. I don't see any changes from the weekend newsletter's new play description.

I am suggesting a trigger to buy calls at $65.25. If triggered our target is $69.50 but we will plan to exit prior to CHKP's earnings report on January 28th.

Trigger @ 65.25

- Suggested Positions -

Buy the Feb $65 call (CHKP1422B65)

Entry on January -- at $---.--
Average Daily Volume = 821 thousand
Listed on January 04, 2014


Demandware, Inc. - DWRE - close: 67.16 change: +2.76

Stop Loss: 63.45
Target(s): 69.50
Current Option Gain/Loss: +12.2%
Time Frame: exit PRIOR to earnings in mid February
New Positions: see below

Comments:
01/06/14: Our new play on DWRE has been triggered. The stock displayed relative strength with a +4.28% gain and a breakout past resistance to new highs. Our suggested entry point was hit at $65.25. Broken resistance at $65.00 should be new support. I am raising our stop loss to $63.45. FYI: The Point & Figure chart for DWRE is bullish with a $77 target.

- Suggested Positions -

Long Feb $70 call (DWRE1422B70) entry $2.45*

01/06/14 new stop loss @ 63.45
01/06/14 triggered @ 65.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on January 06 at $65.25
Average Daily Volume = 275 thousand
Listed on January 02, 2014


General Dynamics - GD - close: 94.46 change: -0.28

Stop Loss: 93.85
Target(s): 99.50
Current Option Gain/Loss: -23.0%
Time Frame: exit PRIOR to earnings on January 17th
New Positions: see below

Comments:
01/06/14: GD dipped toward short-term support near $94.00 and then bounced. That doesn't mean the pullback is over. We're keeping our stop loss at $93.85.

Earlier Comments:
Our target is $99.50. More aggressive traders may want to aim higher since the Point & Figure chart for GD is bullish with a $105 target. The plan was to keep our position size small.

*small positions* - Suggested Positions -

Long Feb $95 call (GD1422B95) entry $2.21

Entry on December 31 at $95.25
Average Daily Volume = 1.1 million
Listed on December 28, 2013


Honeywell Intl. - HON - close: 90.43 change: -0.09

Stop Loss: 88.40
Target(s): 94.75
Current Option Gain/Loss: - 1.7%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/06/14: Profit taking in HON was very mild today but I would not be surprised to see shares test the $90.00 mark tomorrow.

Earlier Comments:
Our short-term target is $94.75. More aggressive traders may want to aim for the $97-100 zone instead.

- Suggested Positions -

Long Mar $92.50 call (HON1422c92.5) entry $1.75*

12/28/13 new stop loss @ 88.40
12/24/13 triggered @ 90.30
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 24 at $90.30
Average Daily Volume = 2.4 million
Listed on December 23, 2013


Helmerich & Payne - HP - close: 81.95 change: -1.10

Stop Loss: 81.65
Target(s): 87.00
Current Option Gain/Loss: -36.1%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
01/06/14: Ouch! HP underperformed today with a -1.3% decline. If there is any follow through lower tomorrow then we'll likely see shares hit our stop at $81.65.

- Suggested Positions -

Long Jan $82.50 call (HP1418a82.5) entry $1.80
01/04/14 new stop loss @ 81.65
12/24/13 new stop loss @ 79.90

Entry on December 19 at $81.75
Average Daily Volume = 1.0 million
Listed on December 18, 2013



Open Text Corp. - OTEX - close: 92.37 change: -0.34

Stop Loss: 90.75
Target(s): 98.50
Current Option Gain/Loss: + 1.7%
Time Frame: exit PRIOR to February expiration
New Positions: see below

Comments:
01/06/14: OTEX saw a nice bounce off its intraday lows near $91.00. The stock almost made it back into positive territory. The stock is poised to breakout past resistance near $93.00 again. I would be tempted to buy calls on a new high past $93.30.

Our target is $98.50. FYI: The Point & Figure chart for OTEX is bullish with a $107 target.

- Suggested Positions -

Long FEB $95 call (OTEX1422b95) entry $2.90*

01/04/14 new stop loss @ 90.75
12/30/13 new stop loss @ 89.65
12/23/13 new stop loss @ 88.90
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 20 at $91.05
Average Daily Volume = 325 thousand
Listed on December 19, 2013


Palo Alto Networks, Inc. - PANW - close: 57.84 change: +0.40

Stop Loss: 55.75
Target(s): 64.00
Current Option Gain/Loss: -12.2%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
01/06/14: PANW displayed some relative strength today with a +0.7% gain. The company was making headlines this morning with news it had acquired Morta Security. Shares of PANW initially shot higher and hit $58.47 before paring its gains. Our suggested trigger to buy calls was hit at $58.25. I would wait for a new rise above $58.25 before initiating positions.

Earlier Comments:
Our short-term target is $64.00 but I will point out that the February 2013 high near $62.00 could be potential resistance.

- Suggested Positions -

Long Feb $60 call (PANW1422B60) entry $2.45*

01/06/14 triggered @ 58.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on January 06 at $58.25
Average Daily Volume = 1.1 million
Listed on January 04, 2014


Polaris Industries, Inc. - PII - close: 143.64 change: -0.98

Stop Loss: 139.75
Target(s): 149.00
Current Option Gain/Loss: -10.7%
Time Frame: EXIT prior to earnings on January 28th
New Positions: see below

Comments:
01/06/14: PII is threatening to breakdown below its simple 10-dma with today's decline. More conservative traders may want to raise their stop loss closer to the $142.00 level. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week target is $149.00. More aggressive traders could aim higher since the Point & Figure chart for PII is bullish with a $158 target.

- Suggested Positions -

Long Mar $150 call (PII1422c150) entry $4.48
12/30/13 new stop loss @ 139.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 23 at $142.25
Average Daily Volume = 457 thousand
Listed on December 21, 2013


PVH Corp. - PVH - close: 135.35 change: -2.27

Stop Loss: 132.95
Target(s): 147.50
Current Option Gain/Loss: -22.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/06/14: PVH had a rough day. The stock had been showing relative strength the last couple of sessions but today's decline completely erased its 2014 gains. The next level of support should be the 10-dma (near 135) or the $134 level.

Earlier Comments:
Our multi-week target is $147.50. Do not be surprised if we see PVH temporarily stall near the $140 level, which could be round-number resistance. More aggressive investors with a longer time frame might want to aim higher since the Point & Figure chart for PVH is bullish with a $172 target.

- Suggested Positions -

Long Feb $140 call (PVH1422B140) entry $3.50

Entry on January 02 at $136.55
Average Daily Volume = 939 thousand
Listed on December 31, 2013


Salix Pharmaceuticals - SLXP - close: 90.43 change: -0.77

Stop Loss: 87.40
Target(s): 98.50
Current Option Gain/Loss: -20.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/06/14: SLXP spent most of today's session hugging support at the $90.00 level. The late afternoon bounce hit about $90.75. Traders could use a new rally above $90.75 as an alternative entry point.

Earlier Comments:
SLXP is poised to breakout past resistance at the $90.00 level. If shares can breakout past $90 the next major milestone would be the $100 mark. If triggered our multi-week target is $98.50.

- Suggested Positions -

Long Feb $95 call (SLXP1422B95) entry $2.50*

01/03/14 triggered @ 90.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on January 03 at $90.25
Average Daily Volume = 790 thousand
Listed on December 31, 2013


Tiffany & Co - TIF - close: 91.64 change: -0.64

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: -23.7%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
01/06/14: As we suspected when TIF broke down below short-term support at $92.00 it immediately fell to the next level of support near $91.50. I am not suggesting new positions at this time.

- Suggested Positions -

Long FEB $95 call (TIF1422b95) entry $2.15

12/31/13 new stop loss @ 89.75
12/26/13 TIF stock seems unaffected by the negative legal news from Monday
12/23/13 TIF reacts to news that a Dutch court orders it to pay Swatch $449 million in damages.

Entry on December 18 at $91.25
Average Daily Volume = 1.25 million
Listed on December 16, 2013


Tractor Supply Co. - TSCO - close: 75.46 change: -1.02

Stop Loss: 74.50
Target(s): 79.75
Current Option Gain/Loss: -37.2%
Time Frame: EXIT PRIOR to January expiration
New Positions: see below

Comments:
01/06/14: Uh-oh! It is not looking good for our TSCO trade. We've got less than two weeks to go and the stock was underperforming today with a -1.3% decline. It is possible that TSCO will bounce from the $75.00 mark. However, I am suggesting an immediate exit at the opening bell to cut our losses.

- Suggested Positions -

Long Jan $75 call (TSCO1418a75) entry $2.15

01/06/14 prepare to exit immediately
12/28/13 new stop loss @ 74.50
12/23/13 triggered on gap higher at $77.00. Suggested trigger was $75.60

Entry on December 23 at $77.00
Average Daily Volume = 875 thousand
Listed on December 21, 2013


United Technologies - UTX - close: 112.79 change: -0.11

Stop Loss: 110.40
Target(s): 118.50
Current Option Gain/Loss: -30.5%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/06/14: UTX tested its simple 10-dma and bounced. More conservative traders might want to adjust their stops closer to the $112 area.

Earlier Comments:
Our target is $118.50 but we'll plan on exiting prior to UTX's earnings report in late January. More aggressive investors might want to consider aiming higher. The Point & Figure chart for UTX is bullish with a $139 target.

- Suggested Positions -

Long Feb $115 call (UTX1422B115) entry $1.80

12/31/13 trade opened on gap higher at $113.16. Suggested trigger was $113.05

Entry on December 31 at $113.16
Average Daily Volume = 2.8 million
Listed on December 26, 2013


Wyndham Worldwide - WYN - close: 72.48 change: -0.01

Stop Loss: 71.75
Target(s): 78.50
Current Option Gain/Loss: -41.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/06/14: WYN weathered the market's weakness on Monday pretty well with the stock closing virtually unchanged. Yet if the market continues to sink tomorrow I would not be surprised to see WYN hit our stop loss. I am not suggesting new positions.

- Suggested Positions -

Long Feb $75 call (WYN1422B75) entry $1.95*

12/23/13 triggered on gap open at $73.27. Suggested entry point was $73.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 23 at $73.27
Average Daily Volume = 1.1 million
Listed on December 21, 2013




PUT Play Updates

SodaStream Intl. - SODA - close: 47.76 change: -0.58

Stop Loss: 51.25
Target(s): 41.50
Current Option Gain/Loss: + 6.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/06/14: Our SODA trade is looking good with the intraday bounce failing under the $49 level. Traders could use today's move as a new entry point.

Earlier Comments:
I am suggesting we use small positions to limit our risk. There are a lot of bears already in this trade. The most recent data listed short interest at more than 50% of the very small 17.5 million share float.

Our target is $41.50. However, I want to warn you that the $45.00 level could be potential support.

*small positions* - Suggested Positions -

Long Feb $45 PUT (SODA1422N45) entry $2.40

Entry on December 31 at $48.70
Average Daily Volume = 980 thousand
Listed on December 30, 2013



CLOSED BULLISH PLAYS

Aon Plc. - AON - close: 81.74 change: -0.86

Stop Loss: 81.90
Target(s): 87.00
Current Option Gain/Loss: -14.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/06/14: In the weekend newsletter we decided to exit our AON trade immediately on Monday morning. The gap open higher at $83.02 was a gift. Shares reversed and broke down below short-term support.

- Suggested Positions -

2014 Jan $82.50 call (AON1418a82.5) entry $1.70 exit $1.45*(-14.7%)

01/06/14 planned exit
*option exit price is an estimate since the option did not trade at the time our play was closed.
01/04/14 prepare to exit on Monday morning, Jan 6th
12/31/13 adjust exit target higher to $87.00
12/28/13 new stop loss @ 81.90
12/18/13 new stop loss @ 81.30, adjust exit target to $84.85
12/17/13 new stop loss @ 80.90
12/07/13 new stop loss @ 80.75
11/23/13 new stop loss @ 79.85
11/18/13 new stop loss @ 79.45
11/13/13 new stop loss @ 78.75

chart:

Entry on November 08 at $80.50
Average Daily Volume = 2.3 million
Listed on November 06, 2013


Discovery Communications, Inc. - DISCA - close: 87.47 change: -1.11

Stop Loss: 87.90
Target(s): 97.50
Current Option Gain/Loss: -27.9%
Time Frame: exit PRIOR to earnings in mid February
New Positions: see below

Comments:
01/06/14: DISCA continues to underperform with a -1.25% decline and a breakdown below short-term support near $88.00. Our plan was to exit positions at the opening bell this morning. The stock was kind enough to gap open higher by 38 cents this morning.

- Suggested Positions -

Feb $90 call (DISCA1422B90) entry $3.40* exit $2.45**(-27.9%)

01/06/14 planned exit this morning
**option exit price is an estimate since the option did not trade at the time our play was closed.
01/04/14 prepare to exit on Monday morning, Jan. 6th
12/31/13 trade opened on gap higher at $90.76. Suggested trigger was $90.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on December 31 at $90.75
Average Daily Volume = 1.1 million
Listed on December 30, 2013


LyondellBasell Industries - LYB - close: 77.97 change: -0.74

Stop Loss: 77.75
Target(s): 85.00
Current Option Gain/Loss: -50.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/06/14: The selling in LYB continued on Monday and the stock hit our stop loss at $77.75.

- Suggested Positions -

Feb $80 call (LYB1422B80) entry $2.90 exit $1.44 (-50.3%)

01/06/14 stopped out

chart:

Entry on December 31 at $80.25
Average Daily Volume = 3.1 million
Listed on December 24, 2013


United Parcel Service - UPS - close: 101.75 change: -1.34

Stop Loss: 102.75
Target(s): 108.00
Current Option Gain/Loss: -56.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
01/06/14: We had already decided in the weekend newsletter to exit our UPS positions on Monday morning. The stock's gap open higher at $103.53 was a blessing. The rally didn't last very long and UPS plunged toward its 50-dma. The option opened at 45 cents.

- Suggested Positions -

2014 Jan $105 call (UPS1418a105) entry $0.98 exit $0.43 (-56.1%)

01/06/14 scheduled exit this morning
01/04/14 prepare to exit on Monday morning, January 6th
12/30/13 new stop loss @ 102.75
12/24/13 new stop loss @ 101.90
12/21/13 new stop loss @ 100.90
12/12/13 new stop loss @ 100.45
11/23/13 new stop loss @ 99.75
11/20/13 new stop loss @ 98.95

chart:

Entry on November 14 at $101.25
Average Daily Volume = 3.8 million
Listed on November 13, 2013