Editor's Note:

Stocks left investors disappointed again today. The S&P 500 closed flat on the session while the NASDAQ marked its eighth loss in a row. A plunge in biotech stocks and another multi-year low in crude oil weighed on the session.

DLTR and RRGB hit our stops today. DLR met our entry trigger.


Current Portfolio:


CALL Play Updates

Digital Realty Trust Inc. - DLR - close: 78.60 change: +1.56

Stop Loss: 74.80
Target(s): To Be Determined
Current Option Gain/Loss: +13.6%
Average Daily Volume = 1.5 million
Entry on January 11 at $77.75
Listed on January 09, 2016
Time Frame: Exit PRIOR to February option expiration
New Positions: see below

Comments:
01/11/16: Our new bullish trade on DLR is off to a good start. Shares outperformed the broader market and kept the rally alive with a breakout to new highs. Our trigger to buy calls was hit at $77.75.

Trade Description: January 9, 2016:
The last several days have been tough on investors. Stocks experienced a global market sell-off. This volatility and uncertainty could push investors into safer, high-dividend paying stocks. Currently the 10-year U.S. bond only yields 2.1%. That makes a stock like DLR, with a dividend yield above 4%, a lot more attractive. The company has a history of consistently raising its dividend over the last nine years in a row. The stock's relative strength doesn't hurt either.

DLR is in the financial sector. According to the company, "Digital Realty Trust, Inc. supports the data center and colocation strategies of more than 1,000 firms across its secure, network-rich portfolio of data centers located throughout North America, Europe, Asia and Australia. Digital Realty's clients include domestic and international companies of all sizes, ranging from financial services, cloud and information technology services, to manufacturing, energy, gaming, life sciences and consumer products."

DLR has consistently beat Wall Street earnings expectations the last four quarters in a row. The last two quarters the company has also beat analysts' revenue estimates.

Earlier this week DLR provided their 2016 outlook and the company's forecast was slightly above expectations, which helped shares resist the market's sell-off.

Here is an excerpt from DLR's press release on their 2016 outlook:

Digital Realty expects 2016 core FFO (Funds from Operations) per share to be within a range of $5.45-$5.60, which represents a 7% increase at the midpoint from the midpoint of 2015 core FFO per share guidance. Foreign currency translation is expected to represent a headwind to core FFO per share of 1%-2% in 2016.

"We are seeing solid demand for Digital Realty's comprehensive set of data center solutions, which gives us confidence in our ability to achieve accelerating core FFO per share growth in 2016," commented Andrew P. Power, Digital Realty's Chief Financial Officer. "We also expect to generate double-digit AFFO per share growth (Adjusted Funds from Operations), driven by greater cash flow contribution from our core business, accretion from the Telx acquisition and the continued burn-off of straight-line rent. In short, the quality of earnings is improving, the growth in cash flow is accelerating, and we are optimistic about the prospects for our business in 2016 and beyond."

The recent relative strength in shares of DLR over the last few weeks has lifted shares above key resistance near the $75.00 level. It has also produced a buy signal on the point & figure chart, which is now forecasting a longer-term target of $102.00.

Friday saw DLR shares tag new all-time highs (@ 77.67). Tonight we are suggesting a trigger to buy calls at $77.75. Plan on exiting prior to February option expiration.

- Suggested Positions -

Long FEB $80 CALL (DLR160219C80) entry $1.10

01/11/16 triggered @ $77.75
Option Format: symbol-year-month-day-call-strike


Harris Corp. - HRS - close: 86.94 change: +1.10

Stop Loss: 84.90
Target(s): To Be Determined
Current Option Gain/Loss: -43.4%
Average Daily Volume = 927 thousand
Entry on January 05 at $88.15
Listed on January 04, 2016
Time Frame: Exit PRIOR to earnings in early February
New Positions: see below

Comments:
01/11/16: HRS briefly traded down to a new two-week low when it pierced short-term support near $85.50 this morning. Fortunately the stock rebounded and managed to outperform the market with a +1.28% gain by the close. A new rally past $87.85 or $88.00 could be used as another entry point to buy calls.

Trade Description: January 4, 2016:
Out of the thousands of publically traded companies out there only a few have been around for over 100 years. A couple of weeks ago HRS celebrated its 120th anniversary.

HRS issued a press release to mark the achievement. Here's an excerpt: "Founded in the back room of an Ohio jewelry store in December 1895, Harris grew from a tiny printing press company into a top 10 defense contractor with $8 billion in annualized sales, 22,000 employees, customers in 125 countries, and a diverse portfolio of technologies that connect, inform and protect the world. Harris is the longest-thriving major defense contractor and one of 398 publicly held companies still in existence for 120 years or longer - including GE, CVS, Coca-Cola, Pfizer, P&G, and J.P. Morgan."

Today HRS is in the technology sector. They are considered part of the communication equipment industry. According to the company, "Harris Corporation is a leading technology innovator, solving our customers' toughest mission-critical challenges by providing solutions that connect, inform and protect. Harris supports customers in more than 125 countries, has approximately $8 billion in annual revenue and 22,000 employees worldwide. The company is organized into four business segments: Communication Systems, Space and Intelligence Systems, Electronic Systems, and Critical Networks."

Last year HRS ended 2015 on a strong note. The month of December saw HRS win several government contracts worth more than $1 billion. Meanwhile analysts are bullish on the stock. Goldman Sachs has a buy rating on HRS. Cowen recently upped their price target to $102 and said it was one of their best trading ideas for 2016.

Technically the stock has been showing relative strength. Last year HRS outperformed the broader market with a +20% gain. The positive news about the company's new contract wins produced a bullish breakout past major resistance at $85.00 in mid December. Today investors bought the dip near short-term support at its 10-dma. HRS displayed relative strength today too with a +0.8% gain. If this bounce continues we want to hop on board. Tonight we are suggesting a trigger to buy calls at $88.15.

- Suggested Positions -

Long FEB $90 CALL (HRS160219C90) entry $2.65

01/05/16 triggered @ $88.15
Option Format: symbol-year-month-day-call-strike


PowerShares QQQ ETF - QQQ - close: 104.33 change: +0.32

Stop Loss: 103.85
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 35 million
Entry on January -- at $---.--
Listed on January 07, 2016
Time Frame: Exit PRIOR to February option expiration
New Positions: Yes, see below

Comments:
01/11/16: The QQQ dipped to $102.73 before bouncing. The ETF ended the session with a +0.3% gain, snapping a seven-day losing streak. There is no change from my weekend comments. We have two different entry points listed.

Trade Description: January 7, 2016:
The stock market moves on emotion. Most of the time it is a tug-of-war between fear and greed. Occasionally one emotion takes control of the market and stocks move too fast one direction. That is where we are at today.

Fears of a global slowdown thanks to disappointing economic data out of China have increased. China has devalued their currency again, which does not generate confidence. Yesterday we had the nuclear weapon testing headlines from North Korea, which generates fear. We have plunging oil prices, which is fueling worries about deflation.

Odds of a snap back rally are growing and we want to be ready to catch it. One way to play it is the NASDAQ-100 ETF or the QQQ. These are very liquid, big cap names that fund managers can move in and out of more easily.

Thus far 2016 has been ruled by fear. We are only four trading days into the year and the NASDAQ composite is already down -6.4% completely erasing its +5.7% gain from 2015. The QQQ is down -6.2% in the last four days and it's down -8.25% from its December 29th peak just six trading days ago. That's too far too fast.

Tonight we are suggesting a short-term bullish trade when stocks bounce. They will bounce (eventually). Today's intraday high on the QQQ was $107.29. We are suggesting a trigger to buy calls at $107.35. We'll use an initial stop loss at $103.85. More conservative traders may want to use a stop loss closer to today's intraday low instead ($104.81).

Trigger @ $106.50, use an initial stop loss at $103.45

- Suggested Positions -

Buy the FEB $110 CALL (QQQ160219C110)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Buy-the-Dip Trigger @ $100.50, use an initial stop loss at $97.45

- Suggested Positions -

Buy the FEB $105 CALL (QQQ160219C105)

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point(s).

01/09/16 Entry Strategy Update - Use TWO different entry triggers
One is a buy-the-dip trigger at $100.50 with a stop at $97.45 and the Feb $105 calls
The other is a trigger at $106.50 with a stop at $103.45 and the Feb $110 calls
Option Format: symbol-year-month-day-call-strike




PUT Play Updates


Currently we do not have any active put trades.




CLOSED BULLISH PLAYS

Dollar Tree, Inc. - DLTR - close: 77.36 change: -0.43

Stop Loss: 76.90
Target(s): To Be Determined
Current Option Gain/Loss: -56.9%
Average Daily Volume = 3.6 million
Entry on January 07 at $80.85
Listed on January 06, 2016
Time Frame: Exit PRIOR to February option expiration
New Positions: see below

Comments:
01/11/16: Shares of rival discount store Dollar General (DG) were hammered at the open this morning. This probably pressured shares of DLTR lower. DLTR managed to pare its losses by the closing bell but it was too late. DLTR hit our stop loss at $76.90.

- Suggested Positions -

FEB $80 CALL (DLTR160219C80) entry $3.60 exit $1.55 (-56.9%)

01/11/16 stopped out @ 76.90
01/07/16 triggered @ $80.85
Option Format: symbol-year-month-day-call-strike

chart:


CLOSED BEARISH PLAYS

Red Robin Gourmet Burgers - RRGB - close: 59.46 change: +1.17

Stop Loss: 60.25
Target(s): To Be Determined
Current Option Gain/Loss: -30.0%
Average Daily Volume = 244 thousand
Entry on January 06 at $58.40
Listed on January 05, 2016
Time Frame: Exit PRIOR to earnings in mid February
New Positions: see below

Comments:
01/11/16: Friday's bounce in RRGB continued this morning. By lunchtime shares had pierced resistance at $60.00 and its simple 10-dma. Our new stop loss was hit at $60.25.

- Suggested Positions -

FEB $55 PUT (RRGB160219P55) entry $2.50 exit $1.75 (-30.0%)

01/11/16 stopped out
01/09/16 new stop @ 60.25
01/06/16 triggered @ $58.40
Option Format: symbol-year-month-day-call-strike

chart: