Editor's Note:

The stock market's bounce continued on Wednesday with widespread gains. The rebound was accelerating higher this afternoon.

We have adjusted the entry trigger on WDC.

CELG and CHTR hit our stop loss.


Current Portfolio:


CALL Play Updates

Caterpillar Inc. - CAT - close: 102.99 change: +0.60

Stop Loss: 99.75
Target(s): 109.00
Current Option Gain/Loss: +15.1%
Time Frame: exit PRIOR to earnings on April 24th
New Positions: see below

Comments:
04/09/14: I was a bit disappointed with CAT's performance today. Traders did buy the dip near $102 this morning. Yet the bounce in CAT stalled near short-term resistance in the $103.25 area. If you're looking for a new entry point you may want to wait for a rally past $103.50 before initiating positions.

Earlier Comments:
Our exit target is $109.00. However, we do not have much time for CAT to perform. The company is scheduled to report earnings on April 24th and we do not want to hold over the announcement.

- Suggested Positions -

Long MAY $105 call (CAT1417E105) entry $1.52

04/08/14 triggered @ 102.35

Entry on April 08 at $102.35
Average Daily Volume = 5.9 million
Listed on April 07, 2014


QUALCOMM Inc. - QCOM - close: 79.93 change: +1.04

Stop Loss: 77.40
Target(s): to be determined
Current Option Gain/Loss: + 14.4%
Time Frame: Exit PRIOR to earnings on April 23rd
New Positions: see below

Comments:
04/09/14: Right on cue shares of QCOM bounced as we expected. The plan was to buy calls this morning at the opening bell. The stock gapped open higher at $79.26. It's possible but seems unlikely that the $80.00 mark will be resistance. That means the next hurdle for the bulls is the all-time highs set last week near $81.30.

Prepare to exit prior to QCOM's earnings report on April 23rd.

- Suggested Positions -

Long MAY $80 call (QCOM1417E80) entry $1.87

04/09/14 opened on Wednesday morning.

Entry on April 09 at $79.26
Average Daily Volume = 2.0 million
Listed on April 08, 2014


Western Digital Corp. - WDC - close: 90.98 change: +1.38

Stop Loss: 88.80
Target(s): to be determined
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on April 30th
New Positions: Yes, see below

Comments:
04/09/14: I was a bit surprised to see shares of WDC underperforming this morning. Yet traders bought the dip near $89.00 again and stocks bounced back into positive territory.

Today's afternoon high was $91.50. We are adjusting our entry point to buy calls from $92.10 to $91.60. If triggered we will plan on exiting positions prior to WDC's earnings report on April 30th.

Trigger @ $91.60

- Suggested Positions -

buy the MAY $95 call (WDC1417E95) current ask $2.57

04/09/14 adjust entry trigger from $92.10 to $91.60

Entry on April -- at $---.--
Average Daily Volume = 2.0 million
Listed on April 08, 2014




PUT Play Updates

CME Group Inc. - CME - close: 69.53 change: +0.40

Stop Loss: 70.25
Target(s): 62.50
Current Option Gain/Loss: + 0.0%
Time Frame: Exit PRIOR to earnings on May 1st.
New Positions: see below

Comments:
04/09/14: Bearish plays were not working today with the market in bounce mode. CME added +0.5% versus the S&P 500's +1.0%. The stock is quickly approaching what should be resistance at the $70.00 mark. We are going to try and reduce our risk by moving the stop loss down to $70.25.

Earlier Comments:
Our target is $62.50. More aggressive traders could aim lower since the Point & Figure chart for CME is bearish with a $60 target.

- Suggested Positions -

Long May $70 PUT (CME1417Q70) entry $2.15*

04/09/14 new stop @ 70.25
04/07/14 new stop @ 71.25
04/07/14 triggered at $69.75

Entry on April 07 at $71.25
Average Daily Volume = 1.9 million
Listed on April 05, 2014


CLOSED BEARISH PLAYS

Celgene Corp. - CELG - close: 138.22 change: -0.94

Stop Loss: 143.15
Target(s): 127.00
Current Option Gain/Loss: -43.5%
Time Frame: Exit PRIOR to earnings on April 24th
New Positions: see below

Comments:
04/09/14: Biotechs have been some of the worst performing stocks over the prior six weeks. Yet the group produced a big oversold bounce today. The BTK biotech index gained +3.8%. The IBB biotech ETF surged +4.0%. This looks like temporary short covering because the intermediate trend for the biotech industry and shares of CELG is still bearish.

Whatever the reason behind the big rebound today CELG (+6.5%) did hit our stop loss at $143.15.

Earlier Comments:
Biotech stocks can be volatile so I am labeling this trade an aggressive, higher-risk trade. We want to use small positions to try and limit our risk.

*small positions* - Suggested Positions -

May $130 PUT (CELG1417Q130) entry $4.00* exit $2.26** (-43.5%)

04/09/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
04/07/14 triggered @ 136.40
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on April 07 at $136.40
Average Daily Volume = 4.3 million
Listed on April 05, 2014


Charter Communications - CHTR - close: 124.04 change: +2.89

Stop Loss: 122.25
Target(s): 110.50
Current Option Gain/Loss: -63.7%
Time Frame: exit PRIOR to earnings on April 28th
New Positions: see below

Comments:
04/09/14: CHTR is not cooperating either. The stock market's widespread bounce today helped lift CHTR to a +2.3% gain. Shares gapped higher at $121.95 and quickly hit our stop at $122.25.

04/08/14 NOTE: Our entry price at $5.80 seems a bit excessive. Yesterday the option closed with a bid/ask of $3.10/3.50. A 70-cent drop should not have lifted the option price more than $2.00.

Earlier Comments:
The Point & Figure chart for CHTR is bearish with a $110 target.

- Suggested Positions -

May $115 PUT (CHTR1417Q115) entry $5.80 exit $2.10* (-63.7%)

04/09/14 stopped out
*option exit price is an estimate since the option did not trade at the time our play was closed.
04/08/14 triggered at $118.25
Entry price at $5.80 seems excessive.

chart:

Entry on April 08 at $118.25
Average Daily Volume = 995 thousand
Listed on April 07, 2014