Wall Street would probably feel safer hanging out with Plaxico Burress at a night club than bet money on Friday’s November unemployment report. The Labor Department is expected to report the jobless rate rose to 6.8% and that another wave of jobs cuts will be coming.

As unemployment goes up so do the number of claims. Last week unemployment benefits reached 4 million…the highest level in over 25 years. The report comes out before the market opens so it will likely have a major influence in the early going.

Oil closed below $44 a barrel and could be headed below $40. Hard to believe that oil is down nearly 70% from its $147 peak in the summer. Oil and oil stocks don’t always trade in tandem but there was some serous action in the Exxon Mobil (XOM, $76.27, down $2.66) put options.

Specifically, the December 75 puts (XOMXO, $3.25, up $1.25) opened at $2.65 and hit a low of $2.05 as Exxon traded in positive territory for a few minutes after the opening bell. Nearly 12,000 contracts traded hands.

The big wigs of Ford (F, $2.66, down $0.19) and General Motors (GM, $4.11, down $0.79) will appear before the House committee again. They will get some cash but it’s a shame how they must squirm when the goverment has thrown billions and billions to other industries. We cannot lose the auto industry but something has gotta happen quick.

Rick Rouse
Rick@OptionsMentoring.com

Potash (POT, $49.60, down $3.21) continued its slide today as the stock lost 6% and set a fresh 52-week low in the process. The stock traded as low as $48.99 suggesting even further weakness. Looking at the chart, Potash now looks poised to test $46 and if that level fails it could fall even further.

The bulls tried to keep Potash above $50 as shares rallied to a high of $54.89 shortly after the market opened for trading. For those of you that weren’t in our bearish trade, it represented a great time to jump in below our original entry points.

The December 50 puts (PVZXJ, $4.60, up $1.30) traded to a low of $2.50 and I liked entry points up $3.00. If you got in at $3.00 then you are already looking at a 50% gain. I liked the December 40 puts (PVZXH, $1.20, up $0.10) up to 80 cents and they traded to a low of 55 cents today. If you got in at 60 cents you’re looking at a double.

There are a lot of moving parts in the market right now and what is hot one day is cold the next. Keep your stops tight on this one because Potash will continue to make wild price swings.

Rick Rouse
Rick@OptionsMentoring.com

Chesapeake Energy (CHK, $11.84, down $2.26) continued its free-fall today and is feeling the pinch from falling energy prices and increased inventories. Last Friday I mentioned the company was issuing more shares to raise nearly $2 billion in capital which would dilute shareholder value. Chesapeake plans to use the proceeds for core operations and acquisitions but the current environment has left the company short on cash.

The company is in the process of developing “shale sand projects” but has been forced to cut its budget through 2010. These projects are aimed at retrieving natural oil and gas but with demand dropping, Chesapeake may have to hold off on such projects.

Option implied volatility on the stock continues to rise and I had mentioned all signs were pointing to a break below $11.99. We witnessed that today as the stock hit a low of $11.50 and closed below its previous 52-week low. Not a good sign if you are bullish.

Th good news is that we weren’t bullish on Chesapeake Energy as we were expecting more downside. The December 17.50 puts (CHKXW, $6.20, up $2.25) are deep-in-the-money which means the options will trade dollar for dollar if the stock continues lower.

These options opened at $1.65 last Friday and continue to add on big gains for us. We have raised our stop along the way and at last check we had it at $3.50. Let’s go ahead and take it up to $5.75. The December options expire in two weeks so there is still time for the stock to drop even further before the puts expire. However, if the stock rebounds we will close the position if our stop is taken out.

Rick Rouse
Rick@OptionsMentoring.com

I’m not all that excited about the “movie” stocks but there may be an opportunity to make some trades within the sector as we head into a festive time of the year. Thanksgiving through Christmas is movie heaven and there’s a chance some of these beaten down stocks could recover.

The one player I do like in the sector is Imax (IMAX, $2.73, down $0.08) and I have mentioned this stock before at much higher levels. I do not trust the stock enough to by any longer-term options but Imax could be a force in the movie industry down the road.

Although we were successful in riding Imax to its 52-week high, the stock has dropped nearly 70% from a peak of $8.28. The stock is cheap enough to the point where instead of making an option trade it might be better off to buy the stock. It eliminates the risk of an option expiring worthless and if Imax can get to $10, you would easily triple your money.

Imax has its fingers in a lot of pies and is developing some solid business partners and relationships with some top-tier names. The company recently inked a deal with Walt Disney (DIS, $21.94, up $0.48) and is strategically building the “Imax Experience” into a tidal wave.

Carmike Cinemas (CKEC, $2.56, down $0.24) and Cinemark Holdings (CNK, $8.22, up $0.35) and Regal Entertainment Group (RGC, $9.52, up $0.68) all stand to benefit as Imax leads the charge into the digital format age.

National CineMedia (NCMI, $8.26, up $0.98) could also do well if movie theaters stay packed and they can jack-up their advertising prices. The company also distributes business meetings and digital programming event services.

Marvel Entertainment (MVL, $29.61, up $1.05) and DreamWorks Animation (DWA, $23.38, up $0.79) are a couple other names worth mentioning.

Again, not much to get too excited about but if the timing is right there is a chance to make 10%-20% in some of these names as we witnessed today.

Rick Rouse
Rick@OptionsMentoring.com

The market is rebounding after a lower opening this morning as Wall Street has shrugged off some bad economic news and is focusing on keeping the Dow above 8,000. Aside from Monday’s dramatic 680 point debacle, the Dow had been on a nice winning streak. This has raised the bulls hopes that some stability might be returning to Wall Street. However, despite today’s turnaround there are still quite a few stocks heading lower.

Chesapeake Energy (CHK, $13.93, down $0.32) continues to be a huge winner for us and hit a low of $13.43 earlier this morning. The December 17.50 puts (CHKXW, $4.00, up $0.20) have traded as high as $4.50. Many of you got in at $1.65-$2.65 and we have our stop at $3.50. Go ahead and raise it to $3.70.

Potash (POT, $53.08, down $2.02) has had one of its legs taken off on the way down from $240 and there other leg is broken. The market is leaning heavy on the stock and the December 50 puts (PVZXJ, $3.20, up $0.50) and the December 40 puts (PVZXH, $0.80, up $0.05) are off to a good start.

Research In Motion (RIMM, $37.65, up $0.33) hit a low of $35 but is rebounding. Like I mentioned earlier, the first half-hour of trading would be dicey for the stock. Those December puts (RUPXG, $2.50, down $0.70) I told you not to chase on the pre-earnings announcement opened at $4.05 and now look at them. A lot of novice option traders will “chase” this type of news as soon as the market opens and find themselves 50% in the hole 30 minutes later. RIMM may collapse from here but I wanted to point this out because the market doesn’t care about your experience level.

And yes, I did stay at a Holiday Inn Express last night…

Rick Rouse
Rick@OptionsMentoring.com

It appears we are going to start Wednesday off in the red. The early morning buzz is negative as Research In Motion (RIMM, $37.32) said profits are going to be below Wall Street’s expectations. The company cut its third-quarter revenue and earnings forecast, blaming a strong dollar and the weak economy. As a result, it appears the Dow is set to give back at least half of yesterday’s 270 point gain when we get underway.

The Dow futures are down 188 points, Nasdaq futures are lower by 35 while the S&P 500 is off by 22. These are quite high which could lead to a sharply lower open.

As for RIMM, the company now expects adjusted earnings of $0.82, down from its earlier projection of $0.89-$0.97. The writing has been on the wall in every john on Wall Street that RIMM would disappoint when it reports December 18. Keep an eye on the RIMM December 35 puts (RUPXG, $3.20) as they will be active but don’t go chasing them.

We are focused on a few other trades at the moment but monitor them and wait until after 10AM if you do consider a position. Trading is always wacky and skewed at the open and you can get a better picture of where the stock could be headed the rest of the day after the dust settles.

Rick Rouse
Rick@OptionsMentoring.com

Well, it’s time to take yet another look at Potash (POT, $55.20, down $1.27). Near the end of October we went long on some November calls in Potash as the charts showed a quick bounce was in store. Barron’s had just did a weekend article on the stock and everybody was suddenly bullish again. We took advantage of the bounce from $60 to $90 and made out like bandits.

The November calls provided many of us an opportunity to make 100%-200% in a matter of 10 days. We raised our stops along the way and got out while the gettin’ was good. After hitting a high of $95 on November 5, the stock has stunk worse than a wet dog and made a fresh 52-week low today.

Potash hasn’t had any significant news regarding its upcoming earnings but Mosaic (MOS, $27.16, up $1.76) said today it expects sales volumes to remain soft for its third quarter but should recover after that. Despite the news, the stock bounced higher. However, if grain prices remain low, the demand for fertilizer is going to remain soft, because margins have declined for farmers. Plus there’s the high inventory issues that have come with over-production.

Options traders seem to be targeting Potash instead of Mosaic because Potash has a lot further to fall. The Potash December 50 puts (PVZXJ, $2.70, up $0.10) had some heavy volume as over 2,000 contracts traded hands. More interesting is the fact that the December 40 puts (PVZXH, $0.75, up $0.10) were also active as 2,800 contracts switched hands.

I like both options plays and would buy the 50 puts up to $3 and the 40 puts can be entered up to 80 cents. The December options expire in 17 days so keep an eye on your entry and exit points. This is a trader’s market and we are bound to see continued volatility in shares of Potash.

Rick Rouse
Rick@OptionsMentoring.com

Here’s a quick update on what is going on with our Chesapeake Energy (CHK, $14.25, down $0.75) trade. The stock lost 5% today and over $2 on Monday after Wall Street seemed disappointed with OPEC having deferred a decision on cutting crude oil production over the weekend.

Other energy stocks have been falling in sympathy as oil futures continue to plunge. Oil fell 10% on Monday and another $2 and change today to settle at $47 a barrel. OPEC’s “decision” to delay a decision on output until later this month has driven oil prices to nearly a four-year low and has helped our bearish position in Chesapeake Energy.

The December 17.50 puts (CHKXW, $3.85, up $0.65) opened at $1.65 last Friday and have easily doubled. These calls were selling for $2.65 yesterday morning when I mentioned them again as we were targeting a run to $3. We got that by yesterday’s close. We are now well above our $3 stop so let’s raise it to $3.50.

The 52-week low for Chesapeake is $11.99 and all signs are pointing to a retest of those levels. However, if by some chance the stock rebounds our stop will protect our profits.

Rick Rouse
Rick@OptionsMentoring.com

Despite what was initially thought as a “successful” start to the holiday season, the Dow is down over 400 points as we hit mid-day. The figures from Black Friday were higher than what many analysts had been expecting as sales rose 3% to $10.6 billion. However, this is supposedly the biggest shopping day of the year and it is clear Wall Street is certainly concerned the news isn’t indicative of the rest of the weekend.

As a result, the Dow is down 435 points to 8,394 while the S&P 500 is skidding 53 to 853. The Nadaq is down nearly 90 points to 1,446.

Most consumers spent November waiting for Black Friday and many of the deals that come along with it as stores try to lure in customers. It has been quite apparent that people are bargain hunting and will continue to right up until Christmas. The strength from Friday will probably not be enough to carry the rest of the weekend, as reports also surfaced that business fell off sharply on Saturday.

There were a couple of economic reports that were also released this morning that has also added to the negative sentiment. The Institute for Supply Management said its index of manufacturing activity fell to a 25-year low in November and another said construction spending fell by a larger-than-expected amount in October. No surprises here.

On the bright side, Ford (F, $2.86, up $0.17) and General Motors (GM, $4.94, down $0.30) have held up well although GM has slipped after trading as high as $5.75. I mentioned the option activity in these two companies on Friday and today is no different…it is heavy.

Citigroup (C, $6.88, down $1.43) is getting an 18% haircut after surging all last week. The December 5 calls (CLP, $2.25, down $1.20) hit our stop of $3 on the way down this morning. Here is yet another example of why sell stops are so crucial. I had mentioned the short-term target for Citigroup was $8 and we got to $8.48 on Friday. The stock opened this morning at $7.90 and has been drifting lower ever since. The trade was good for a 200% return. Citigroup could get cheaper again and there will certainly be another trade coming.

I also mentioned Chesapeake Energy (CHK, $15.95, down $1.23). The December 17.50 puts (CHKXW, $2.60, up $0.55) opened at $1.65 on Friday and are up over 25% today. We are targeting $3.00 for the puts but set stops at $2.25.

Rick Rouse
Rick@OptionsMentoring.com

The market is closing at 1PM today and we’ve got about a half hour to go. Here’s what we’re watching:

Citigroup (C, $8.27, up $1.22) has moved above $8. This was my near-term target for the stock and the December 5 calls (CLP, $3.40, up $1.00) are now deep-in-the-money and are trading in tandem with the stock. Many of you got into this position for under a $1 as the calls traded to a low of 60 cents last Friday. Set stops at $3.00.

Chesapeake Energy (CHK, $16.95, down $3.29) is down over 15% as they plan to sell stock to raise nearly $2 billion in cash. Talk about diluting shareholder value. The December 17.50 puts (CHKXW, $2.10, up $1.15) are up 120% and opened at $1.65.

Yahoo (YHOO, $11.00, up $0.42) is up today on news that Carl Icahn is increasing his stake in the company. Apparently he has been buying shares this week and has plunked another $70 million down. More on this story next week.

Ford (F, $2.68, up $0.53) and General Motors (GM, $5.29, up $0.48) are getting nice pops. I’m hearing the two companies could be meeting around December 8 with Congress again and there’s a good chance they get some bailout bucks.

The Ford December 3 calls (FLG, $0.31, up $0.09) have traded over 20,000 contracts while the GM December 5 calls (GMLA, $1.00, up $0.15) have traded nearly 6,000 contracts. These two options could post huge gains if Ford and GM continue to rally. If Ford can get to $4 over the next week or two, the December 3 calls will be worth at least $1, or a triple from current levels. If GM can get to $8, same return. Big risk but big reward if you get in these options but I do like them.

Looks like the Dow is headed for its fifth straight winning session.

Rick Rouse
Rick@OptionsMentoring.com