Editor's Note:

The market's two-day bounce has been completely erased by Thursday's widespread sell-off.

Equities started to weaken in overnight trading and the U.S. indices delivered a day-long decline. Biotechs and momentum names led the way lower again.

The whipsaw with big gains and big losses makes this a challenging environment for short-term traders.

WDC and CME both hit our stop loss.


Current Portfolio:


CALL Play Updates

Caterpillar Inc. - CAT - close: 102.26 change: -0.73

Stop Loss: 99.75
Target(s): 109.00
Current Option Gain/Loss: +00.0%
Time Frame: exit PRIOR to earnings on April 24th
New Positions: see below

Comments:
04/10/14: CAT actually held up reasonably well today. The stock broke out to new relative highs this morning before reversing and succumbing to the market's weakness. CAT only lost -0.7% versus -2.0% in the S&P 500. More conservative traders may want to raise their stop loss closer to the simple 10-dma near 101.40. I am not suggesting new positions at this time.

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: 78.07 change: -1.86

Stop Loss: 77.40
Target(s): to be determined
Current Option Gain/Loss: - 25.1%
Time Frame: Exit PRIOR to earnings on April 23rd
New Positions: see below

Comments:
04/10/14: QCOM got hammered along with the rest of the technology sector. The NASDAQ fell -3.1% and QCOM gave up -2.3%. Today's move produced another bearish reversal type of candlestick. If there is any follow through lower tomorrow we could see QCOM hit our stop at $77.40.

Earlier Comments:
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


Visa Inc. - V - close: 201.55 change: -5.99

Stop Loss: 199.95
Target(s): to be determined
Current Option Gain/Loss: -39.8%
Time Frame: exit PRIOR to earnings on April 24th
New Positions: Yes, see below

Comments:
04/10/14: It was an ugly day for the markets and Visa was no exception. Shares erased yesterday's +$5.00 gain with a -$6.00 drop today. The stock actually gapped open higher at $208.26 before reversing at its simple 10-dma and plunging back toward round-number support at $200.00. The low today was $200.15. Today's move does mark a close under technical support at the simple 200-dma. Our stop loss is at $199.95 and if Visa sees any follow through lower tomorrow we will be stopped out.

- Suggested Positions -

Long May $210 call (V1417E210) entry $5.90

04/10/14 Trade opens. Visa gapped higher at $208.26

Entry on April 10 at $208.26
Average Daily Volume = 3.8 million
Listed on April 09, 2014




PUT Play Updates


Currently we do not have any active put trades.




CLOSED BULLISH PLAYS

Western Digital Corp. - WDC - close: 88.17 change: -3.08

Stop Loss: 88.80
Target(s): to be determined
Current Option Gain/Loss: - 30.2%
Time Frame: Exit PRIOR to earnings on April 30th
New Positions: see below

Comments:
04/10/14: It looks like we should have kept our entry trigger at $92.10. We thought the bounce might have more legs so last night we moved the entry trigger to $91.60. WDC hit our trigger this morning, failed at $91.91, and then reversed into a -3.3% drop. Technology stocks were big underperformers today with the NASDAQ down -3.1%.

- Suggested Positions -

MAY $95 call (WDC1417E95) entry $2.58* exit $1.80* (-30.2%)

04/10/14 stopped out @ 88.80
*option entry price and exit price is an estimate since the option did not trade at the time our play was opened or closed
04/10/14 triggered @ 91.60
04/09/14 adjust entry trigger from $92.10 to $91.60

chart:

Entry on April 10 at $91.60
Average Daily Volume = 2.0 million
Listed on April 08, 2014


CLOSED BEARISH PLAYS

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

Stop Loss: 70.25
Target(s): 62.50
Current Option Gain/Loss: -13.9%
Comments:
04/10/14: There is no explanation for the mid morning rally in CME. The market was already sinking before CME started to rally and trade up above resistance at $70.00. The intraday high was $70.26. Last night we lowered our stop loss to $70.25.

Our play is closed even though today's move looks like a new bearish entry point.

- Suggested Positions -

May $70 PUT (CME1417Q70) entry $2.15* exit $1.85** (-13.9%)

04/10/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
04/09/14 new stop @ 70.25
04/07/14 new stop @ 71.25
04/07/14 triggered at $69.75
*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 $71.25
Average Daily Volume = 1.9 million
Listed on April 05, 2014