Editor's Note:

Thursday's profit taking grew into a full-fledged sell-off on Friday with a very widespread market plunge.

Nearly all of our bullish trades were stopped out with Friday's cascade lower.

We have removed SBAC. Our put play on RKT hit our bearish target.


Current Portfolio:


CALL Play Updates

Green Mountain Coffee Roasters - GMCR - close: 80.86 change: -0.29

Stop Loss: 77.95
Target(s): 88.00
Current Option Gain/Loss: -36.6%
Time Frame: exit PRIOR to earnings on February 5th
New Positions: see below

Comments:
01/25/14: GMCR was not immune to the market's widespread sell-off on Friday but the stock did hold support at the $78.00 level. I am concerned that the market could see some follow through weakness on Monday morning and that could push GMCR to our stop loss at $77.95. I am not suggesting new positions at this time.

- Suggested Positions -

Long Feb $85 call (GMCR1422B85) entry $3.66

01/23/14 triggered @ 81.75

chart:

Entry on January 23 at $81.75
Average Daily Volume = 2.3 million
Listed on January 22, 2014




PUT Play Updates


Our RKT put play hit our target on Friday.

Currently we do not have any active put trades.




CLOSED BULLISH PLAYS

Accenture - ACN - close: 81.18 change: -2.74

Stop Loss: 83.25
Target(s): 89.50
Current Option Gain/Loss: -55.6%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
01/25/14: Shares of ACN were crushed on Friday with a -3.26% decline. The last two days have seen ACN erased the prior four days worth of gains. ACN gapped open lower at $83.29 on Friday morning and quickly hit our stop loss at $83.25.

- Suggested Positions -

Feb $85 call (ACN1422B85) entry $1.58 exit $0.70* (-55.6%)
01/24/14 stopped out
*option exit price is an estimate since the option did not trade at the time our play was closed.

chart:

Entry on January 22 at $85.15
Average Daily Volume = 3.3 million
Listed on January 18, 2014


Chicago Bridge & Iron - CBI - close: 75.78 change: -6.13

Stop Loss: 79.65
Target(s): 89.50
Current Option Gain/Loss: -51.6%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
01/25/14: CBI's performance on Friday was terrible. The move looks like a serious overreaction to the market's weakness. I do not see any other news that might account for CBI's relative weakness. The stock plunged through potential support near $80 and its 50-dma and fell almost -7.5%. CBI closed near the next level of support near $75 and its 100-dma. Friday's move erased almost eight weeks worth of gains. Our trade was stopped out at $79.65.

The fundamentals for CBI did not change on Friday. Therefore we want to take advantage of this overreaction and re-launch bullish positions again on Monday morning. Please see our new trade on CBI in tonight's new play section.

- Suggested Positions -

April $85 call (CBI1419D85) entry $3.10 exit $1.50* (-51.6%)

01/24/14 stopped out
*option exit price is an estimate since the option did not trade at the time our play was closed.
12/28/13 new stop loss @ 79.65

chart:

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


Cigna Corp. - CI - close: 86.70 change: -2.84

Stop Loss: 88.40
Target(s): 95.00
Current Option Gain/Loss: -37.6%
Time Frame: exit PRIOR to earnings on February 7th
New Positions: see below

Comments:
01/25/14: The stock market's plunge on Friday sent CI falling toward its simple 50-dma. Shares hit our stop very early at $88.40.

- Suggested Positions -

Feb $90 call (CI1422B90) entry $2.47 exit $1.54 (-37.6%)

01/24/14 stopped out
01/21/14 triggered @ 90.25

chart:

Entry on January 21 at $90.25
Average Daily Volume = 1.0 million
Listed on January 15, 2014


Northrop Grumman - NOC - close: 113.45 change: -4.05

Stop Loss: 117.25
Target(s): 124.00
Current Option Gain/Loss: -25.9%
Time Frame: exit PRIOR to earnings on January 30th
New Positions: see below

Comments:
01/25/14: The sell-off in NOC is disappointing but not too surprising. When the market started turning south investors rushed to lock in gains on their winners. NOC has definitely been a winner with shares hitting new highs on Wednesday. Unfortunately the two-day sell-off has erased two weeks worth of gains. Our stop loss was at $117.25 but NOC gapped open lower at $116.68 on Friday morning, immediately closing our play.

- Suggested Positions -

FEB $120 call (NOC1422B120) entry $1.35 exit $1.00 (-25.9%)

01/24/14 stopped out on gap down at $116.68
01/23/14 NOC plunges following earnings from LMT
01/22/14 new stop loss @ 117.25
01/14/14 new stop loss @ 114.65
01/10/14 triggered @ 116.50

chart:

Entry on January 10 at $116.50
Average Daily Volume = 1.3 million
Listed on January 09, 2014


QUALCOMM Inc. - QCOM - close: 74.08 change: -1.79

Stop Loss: 74.65
Target(s): 79.75
Current Option Gain/Loss: -20.4%
Time Frame: Exit PRIOR to earnings on January 29th
New Positions: see below

Comments:
01/25/14: QCOM succumbed to the market's weakness on Friday and reversed with a -2.35% decline. That was enough to hit our new stop loss at $74.65. I am still bullish on QCOM and would keep this stock on your watch list. If shares bounce from $74.00 we might add it back to the newsletter but only after its earnings report. QCOM is due to report earnings on January 29th.

- Suggested Positions -

Feb $75 call (QCOM1422B75) entry $1.96 exit $1.56 (-20.4%)

01/24/14 stopped out
01/23/14 new stop loss @ 74.65
01/21/14 triggered @ 75.25

chart:

Entry on January 21 at $75.25
Average Daily Volume = 8.3 million
Listed on January 16, 2014


NASDAQ-100 ETF - QQQ - close: 86.74 change: -1.74

Stop Loss: 86.75
Target(s): 94.00
Current Option Gain/Loss: -44.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/25/14: The broad-based sell-off on Friday pushed the QQQ to a -1.9% decline and just low enough to hit our stop loss at $86.75. The long-term trend is still up and we suspect that the QQQ might bounce off its trend line of higher lows. This play closed on Friday but we are re-adding the QQQ as a new play tonight. See tonight's new play section for details.

Earlier Comments:
We wanted to use small positions to limit our risk.

*small positions* - Suggested Positions -

Mar $90 call (QQQ1422C90) entry $1.20 exit $0.67 (-44.1%)

chart:

Entry on January 22 at $88.75
Average Daily Volume = 29 million
Listed on January 21, 2014


SBA Communications - SBAC - close: 89.95 change: -2.83

Stop Loss: 89.90
Target(s): 98.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/25/14: SBAC underperformed on Friday. The NASDAQ composite fell -2.1% but SBAC gave up -3.0%. Our trade has not opened yet. We are choosing to remove SBAC as a bullish candidate. The reversal could be the start of a potential bearish double top pattern.

Trade did not open.

01/25/14 removed from the newsletter. Trade did not open. suggested entry point was $93.00

chart:

Entry on January -- at $---.--
Average Daily Volume = 1.1 million
Listed on January 23, 2014


Seagate Technology - STX - close: 58.57 change: -2.17

Stop Loss: 59.65
Target(s): 65.00
Current Option Gain/Loss: -30.6%
Time Frame: exit PRIOR to earnings on January 27th.
New Positions: see below

Comments:
01/25/14: Friday's market decline pushed STX to a -3.5% drop. Our stop loss was hit at $59.65. The next level of support could be the $55 area. I would be tempted to buy calls on a bounce from $55.

- Suggested Positions -

Feb $60 call (STX1422B60) entry $3.10 exit $2.15 (-30.6%)

01/23/14 prepare to exit tomorrow (Friday) at the closing bell
01/22/14 be careful. STX looks like it could gap down tomorrow morning
01/21/14 new stop loss @ 59.65
01/15/14 triggered @ 60.85

chart:

Entry on January 15 at $60.85
Average Daily Volume = 3.5 million
Listed on January 14, 2014


CLOSED BEARISH PLAYS

Rock-Tenn Co. - RKT - close: 96.15 change: -3.62

Stop Loss: 100.65
Target(s): 97.00
Current Option Gain/Loss: +37.8%
Time Frame: Exit PRIOR to earnings on January 28th
New Positions: see below

Comments:
01/25/14: Target achieved.

RKT finally broke free from the $100 area and underperformed the market's major indices with a -3.6% drop on Friday. Our suggested exit target was hit at $97.00.

- Suggested Positions -

FEB $100 PUT (RKT1422N100) entry $3.70 exit $5.10 (+37.8%)

01/24/14 target hit at $97.00
01/23/14 new stop loss @ 100.65
01/22/14 new stop loss @ 101.15
01/18/14 new stop loss @ 102.25
01/16/14 new stop loss @ 102.55
01/13/14 new stop loss @ 103.55
01/11/14 adjust exit target from $96.00 to $97.00

chart:

Entry on January 09 at $101.96
Average Daily Volume = 656 thousand
Listed on January 08, 2014