Editor's Note:

The U.S. market did not see any follow through on yesterday's oversold bounce.

Call option plays BBH, GD, and QQQ hit our stop loss. CRM hit our entry trigger.

Put plays IBM and MCD both hit our entry triggers.


Current Portfolio:


CALL Play Updates

Salesforce.com - CRM - close: 61.63 change: +0.67

Stop Loss: 59.40
Target(s): 67.50
Current Option Gain/Loss: - 1.5%
Time Frame: Exit PRIOR to earnings in late February
New Positions: see below

Comments:
02/05/14: CRM continued to show relative strength on Wednesday. Traders bought the dip near $59.75 this morning and the stock rebounded to a new relative high. CRM hit our suggested entry point at $61.75 this afternoon.

Earlier Comments:
Our target is $67.50. However, we will plan on exiting prior to CRM's earnings report in late February (no confirmed date yet). FYI: The Point & Figure chart for CRM is bullish with an $82 target.

- Suggested Positions -

Long Mar $62.50 call (CRM1422C62.5) entry $3.30*

02/05/14 triggered @ 61.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on February 05 at $61.75
Average Daily Volume = 4.8 million
Listed on February 01, 2014


iShares Russell 2000 ETF - IWM - close: 108.65 change: -0.82

Stop Loss: 103.75
Target(s): 113.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
02/05/14: The IWM tagged another new relative low before paring its losses. We are expecting a pullback toward the simple 200-dma or the $106.00 level.

Currently the plan is to buy calls on a dip at $106.00.

Trigger @ $106.00, stop loss @ 103.75.

- Suggested *SMALL* Positions -

Buy the Mar $110 call (IWM1422C110)

02/03/14 STRATEGY adjustment: New trigger buy the dip at $106.00,
move the stop loss to $103.75, change the option strike.
02/01/14 remove trigger at $110.30. Adjust stop loss higher.
02/01/14 *Use small positions to limit risk*
01/29/14 adjust stop on buy-the-dip entry point to 108.65
01/28/14 add a secondary entry point to buy calls at $114.15
01/27/14 adjust the entry point trigger to $110.30 and move the stop loss to $108.85.

Entry on January -- at $---.--
Average Daily Volume = 31.7 million
Listed on January 25, 2014


SBA Communications - SBAC - close: 91.72 change: +0.10

Stop Loss: 89.90
Target(s): 99.50
Current Option Gain/Loss: - 28.2%
Time Frame: Exit PRIOR to earnings on February 25th
New Positions: see below

Comments:
02/05/14: SBAC held up pretty well today and managed to close in positive territory. I am not suggesting new positions at the moment. P> FYI: The Point & Figure chart for SBAC is bullish with a $107 target. A move above $93.00 would produce a new buy signal.

- Suggested Positions -

Long MAR $95 call (SBAC1422C95) entry $1.95

01/31/14 triggered at $93.05

Entry on January 31 at $93.05
Average Daily Volume = 1.3 million
Listed on January 30, 2014




PUT Play Updates

CommVault Systems - CVLT - close: 64.24 change: +0.08

Stop Loss: 66.75
Target(s): 60.15
Current Option Gain/Loss: -17.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/05/14: Our plan was to launch put positions this morning. CVLT opened lower at $63.68 and quickly bounced at $63.48 but the bounce was fading this afternoon. I would still consider new positions now. However, more conservative traders may want to wait for a new drop under yesterday's low ($62.94) as their entry point to buy puts but you'll want to modify your stop and target.

We will aim for $60.15 because the $60.00 level could be support. More aggressive investors may want to aim lower since the Point & Figure chart for CVLT is bearish with a $48.00 target.

- Suggested Positions -

Long MAR $60 PUT (CVLT1422o60) entry $1.95*

02/05/14 trade opened with a gap down at $63.68
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on February 05 at $63.68
Average Daily Volume = 1.1 million
Listed on February 04, 2014


Intl. Business Machines - IBM - close: 174.24 change: +1.40

Stop Loss: 176.55
Target(s): 161.00
Current Option Gain/Loss: -16.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/05/14: IBM is not cooperating. IBM would have likely hit our suggested entry point at $172.25 as the market spiked lower this morning. However, the stock actually gapped open lower at $172.19 and immediately bounced. Not only did it bounce but shares actually outperformed the major indices with a +0.8% gain. Technically today's move has created a bullish engulfing candlestick reversal pattern. That's not a good sign if you're bearish on IBM. The only positive development for bears today was how the bounced stalled at short-term resistance near $175.00.

The bullish reversal candlestick pattern worries me. More conservative traders may want to lower their stop loss closer to today's high (essentially $175.00). I am not suggesting new positions at this time.

Earlier Comments:
I am suggesting we limit our risk by using small positions. If triggered our target is $161.00. FYI: The Point & Figure chart for IBM is bearish with a $156 target.

- Suggested *small* Positions -

Long MAR $170 PUT (IBM1422o170) entry $3.50

02/05/14 triggered on gap down at $172.19

Entry on February 05 at $172.19
Average Daily Volume = 6.0 million
Listed on February 03, 2014


McDonald's Corp. - MCD - close: 93.58 change: +0.49

Stop Loss: 94.05
Target(s): 88.00
Current Option Gain/Loss: -22.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/05/14: Shares of MCD also gapped down this morning. Shares opened at $92.80. The market's widespread decline this morning helped push MCD to $92.22. Our suggested entry point to buy puts was hit at $92.50. Unfortunately when the market bounced this afternoon MCD outperformed with a +0.5% gain. That is a bit troubling. I am not suggesting new positions at this time. If there is any follow through higher on the bounce tomorrow we could see MCD hit our stop at $94.05.

Earlier Comments:
If triggered our multi-week target is $88.00. However, I will warn you that the $90.00 level is potential round-number support. The Point & Figure chart for MCD is bearish with an $85 target.

- Suggested Positions -

Long APR $90 PUT (MCD1419P90) entry $1.62*

02/05/14 triggered at $92.50
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on February 05 at $92.50
Average Daily Volume = 5.9 million
Listed on February 04, 2014


Restoration Hardware - RH - close: 55.96 change: -0.31

Stop Loss: 58.25
Target(s): 51.00
Current Option Gain/Loss: -10.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/05/14: Hmm... RH managed to tag a new relative low as the market traded lower this morning. Yet RH's decline wasn't that much lower than support near $55.00. The stock is consolidating with a narrowing pattern of lower highs near the 10-dma and support near $55.00. Normally this sort of pattern would suggest a break lower but it's not guaranteed.

Earlier Comments:
Please note that I do consider this a somewhat more aggressive, higher-risk trade because RH does have above average short interest (about 10% of the 34 million-share float). Our multi-week target is $51.00. More aggressive traders could aim lower. The Point & Figure chart for RH is bearish with a $43 target.

*Small Positions* - Suggested Positions -

Long MAR $55 PUT (RH1422o55) entry $3.00*

02/03/14 new stop loss @ 58.25
01/29/14 trade opened this morning. RH gapped down at $56.47.
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on January 29 at $56.47
Average Daily Volume = 981 thousand
Listed on January 28, 2014


Sears Holding - SHLD - close: 34.35 change: +0.36

Stop Loss: 38.55
Target(s): 30.25
Current Option Gain/Loss: +20.8%
Time Frame: exit PRIOR to earnings in late February
New Positions: see below

Comments:
02/05/14: We're seeing a similar pattern in SHLD where the stock dipped to a new relative low and then bounced. Yet the stock not only bounced but outperformed the major indices with a gain. SHLD added +1.0%. I am not suggesting new positions at this time. More conservative investors may want to adjust their stop loss lower.

Earlier Comments:
I do consider this a more aggressive trade because there is so much short interest. The shorts are probably right on this stock but SHLD could still see short-term spikes if some of the weaker shorts rush to cover on any unexpected good news. The most recent data listed short interest at 54% of the 50.7 million share float.

Our target is $30.25. More aggressive traders could aim lower since the Point & Figure chart for SHLD is bearish with a $20 target. However, I would not hold over the earnings report expected in late February.

- Suggested Positions -

Long MAR $30 PUT (SHLD1422o30) entry $1.63

01/31/14 triggered @ $35.85

Entry on January 31 at $35.85
Average Daily Volume = 2.6 million
Listed on January 29, 2014


The J.M.Smucker Company - SJM - close: 92.82 change: -0.89

Stop Loss: 96.55
Target(s): 90.50
Current Option Gain/Loss: +56.3%
Time Frame: Exit PRIOR to earnings on Feb. 14th
New Positions: see below

Comments:
02/05/14: SJM spiked lower at the open and fell toward $92 before bouncing. Shares underperformed the market with a -0.9% decline for the session. I am adjusting our stop loss down to $96.55.

Earlier Comments:
Our target is $90.50. More aggressive traders could aim lower since the Point & Figure chart for SJM is bearish with an $86 target. However, our target at $90.50 may already be too optimistic. SJM is scheduled to report earnings on February 14th and we do not want to hold over the report. We have two weeks. Nimble traders might want to use the February options. I am suggesting the March $95 put.

- Suggested Positions -

Long MAR $95 PUT (SJM1422o95) entry $2.75

02/05/14 new stop loss @ 96.55
02/03/14 triggered @ 96.25

Entry on February 03 at $96.25
Average Daily Volume = 896 thousand
Listed on February 01, 2014



CLOSED BULLISH PLAYS

Biotech ETF - BBH - close: 94.03 change: -1.56

Stop Loss: 93.75
Target(s): 109.00
Current Option Gain/Loss: -53.2%
Time Frame: 6 to 7 weeks
New Positions: see below

Comments:
02/05/14: The stock market spiked lower this morning and that was enough to push the BBH to our stop loss at $93.75. Shares hit an intraday low of $92.60 before bouncing near the simple 30-dma.

- Suggested Positions -

MAR $100 call (BBH1422C100) entry $3.10* exit $1.45**(-53.2%)

02/05/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
01/30/14 triggered on gap open higher at $97.49. suggested trigger was $97.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on January 30 at $97.49
Average Daily Volume = 164 thousand
Listed on January 29, 2014


General Dynamics - GD - close: 98.88 change: -0.80

Stop Loss: 97.75
Target(s): 107.00
Current Option Gain/Loss: -41.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/05/14: Positive analyst comments on GD today could not save the stock from piercing support near $98.00 when the market traded lower this morning. GD dipped to its simple 20-dma and bounced but our stop was hit at $97.75.

- Suggested Positions -

Mar $100 call (GD1422C100) entry $3.00* exit $1.75** (-41.6%)

02/05/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
01/28/14 triggered @ 100.50
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on January 28 at $100.50
Average Daily Volume = 2.6 million
Listed on January 27, 2014


NASDAQ-100 ETF - QQQ - close: 84.69 change: -0.22

Stop Loss: 83.90
Target(s): 92.00
Current Option Gain/Loss: -50.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/05/14: Our QQQ trade was also stopped out on the market's widespread spike lower this morning. Shares hit our stop loss at $83.90.

*small positions* - Suggested Positions -

Mar $87 call (QQQ1422C87) entry $1.60 exit $0.79 (-50.6%)

02/05/14 stopped out
01/27/14 adjust stop loss to $83.90
01/27/14 triggered at $86.00

chart:

Entry on January 27 at $86.00
Average Daily Volume = 29 million
Listed on January 25, 2014