Although I’ve been suspicious that volatility would return to the market, I hesitated to make any bearish bets due to the impossible timing of the decline. January’s ferocious moves to the upside (now a distant memory) would have wiped out the value of any put options in short order.

As many of you have read, the one-sided bet against volatility only helped to exacerbate the decline in stocks. I’m still working on the logistics of how firms selling volatility ETFs (based on the VIX measure of stock volatility) hedged themselves but believe we’ve seen the worst of the freefall.

The good news for investors is that in order for a market decline to introduce some reason to valuations, the drop needs to steep and painful. This shakes out loose hands and reminds investors that stocks can move in two directions, both down and up. I’d say this was accomplished.

I am excited that I can finally re-introduce some bearish trade ideas with a greater level of comfort. I have a few I’ve been fine tuning and you’ll be seeing them soon.

On the flip-side, I’ve been eyeing a few longs that were too rich for my taste but are now trading at reasonable levels, so I’ll be issuing some bullish trade recommendations also.

Please make sure you are signed up for text alerts for trades.

New option trades are typically sent out mid-morning. It is too difficult to provide price limits on options trades before the market is open so I can give you better information by waiting until after the open.

Stock trades are usually sent in the same time frame as I include an options trade with almost every stock suggestion.

However, when closing a position, the trade alert might be sent out mid-day, making the text alert more important.

One last housekeeping point; I will be updating my price targets for stocks as their fourth-quarter earnings are released and 2018 estimates are updated. As of today, I am increasing the target on Ichor Systems (NSDQ: ICHR) to $40 (from $36 prior) and lowering Big Five Sporting Goods (NSDQ: BGFV) to $12 (from $25 prior).

All three truckers (Old Dominion- (NSDQ: ODFL), SAIA (NSDQ: SAIA) and Werner (NSDQ: WERN)) reported terrific numbers and saw healthy increases in estimates. I am waiting for the next quarter to increase my targets to make sure growth is sustainable over the next 24 months, a feat that will allow investors to assign higher P/Es to these stocks.

Around the Portfolio:

We have just two earnings announcements this week. Carbonite (NSDQ: CARB) and Vulcan Materials (NYSE: VMC). See details of those calls below.

Last week’s news that Amazon (NSDQ: AMZN) is hatching a plan to introduce a delivery service to compete with traditional parcel shippers is good news for Air Transport Services Group (NSDQ: ATSG), a portfolio name whose management prefers to stay on the quieter side.

Air Transport currently leases 20 cargo planes to Amazon and would be a likely supplier if it needs more. The company reports earnings in early March and is a great way to play the explosion in e-commerce.

Celgene (NSDQ: CELG) continues to slump with the rest of the biotech group. The SPDR S&P Biotech ETF (AMEX: XBI) is down 10% since touching $97.98 on January 29, Celgene is down a similar amount.

Celgene will present on Wednesday at a Leerink Healthcare conference in NYC. My expectation is that investors will take comfort in management’s plan regarding its Juno purchase and on recent positive data on its Pomalyst/Imnovid product, one of its fastest-growing drugs which accounts for roughly 12% of sales.

The company priced $4.5 billion of debt last week which will help fund its $9 billion purchase of Juno Therapeutics.

Old Dominion Freight reported what I see as an excellent quarter. Revenue beat estimates by $13 million and earnings by $.03. Unlike most public companies, Old Dominion did not offer an earnings number adjusted for a regular tax rate. It did quantify the absolute dollars of benefit and a $9.8 million special bonus paid due to the tax benefit.

Backing out both those numbers show earnings of $1.15 versus estimates of $1.13. All metrics pointed in the right direction, with costs declining to 83.9% from 84.8% last year and rates up 5.1%.

It’s incredibly frustrating when I get the news that I am looking for in a stock (or a group of stocks as it is with these LTL, less-than-truckload shippers) but NOT the price action. In fact, all three (ODFL, SAIA and WERN) have traded down on what I perceive to be very strong quarters.

In fact, after earnings, analysts raised estimates for Old Dominion significantly. Consensus numbers rose from $5.01 to $5.91 for 2018 and from $5.65 to $6.66 for 2019.

I attribute the weakness to portfolio rebalancing where some managers might be shifting out of transportation stocks due to fears that higher interest rates will derail economic growth. I totally disagree with this argument as the shippers are in a secular wave of growth, partly due to a strong economy but also due to a shrunken supply of available trucks due to weaker players being shut out of the market and increased demand from e-commerce.

As companies like Amazon, Jet (part of Walmart (NYSE: WMT)), and Boxed promote home delivery of household items and groceries, demand for LTL shipping will expand.

This doesn’t help us much with the options, which have a limited shelf-life but reinforces my bullish view of the group. The ODFL call options expire next week so the only hope is that the stock has a quick rally. However, the SAIA and WERN calls have until mid-March to improve.

Vulcan Materials raised its quarterly dividend to 28c from 25c per share. The dividend will be payable on March 9 to shareholders of record at the close of business on February 23.

The stock was hit hard in the recent sell-off but may get some respite as funding details of the government’s infrastructure plan are released this week.

WEEKLY EARNINGS:

Tuesday, Feb. 13: Carbonite (NSDQ: CARB) after market close. Call at 5:30 PM (EST)

Directions: 877-303-1393 (U.S.) or 315-625-3228 (international) or via webcast at http://investor.carbonite.com

What to Listen For:

Current estimates look for revenue of $64 million and E.P.S. of $.29 in the quarter. Revenue growth in 2018 will slow as the company digests a few acquisitions (up 9% is the current estimate) but earnings should grow much faster (currently estimating 25% growth) due to the better margins from corporate customers versus consumers.

The big story on Carbonite is its transition to a corporate provider of data security and recovery. Look for commentary on subscription growth and cross-selling to corporate customers. Management will give its first official guide on 2018 on this call.

Friday, Feb. 16: Vulcan Materials (NYSE: VMC) before market open. Call at 11:00 AM (EST)

Directions: The Company invites investors and other interested parties to listen to the live webcast of the conference call at www.vulcanmaterials.com.  To participate by phone, call 866-548-4713 approximately 10 minutes before the scheduled start.  For international calls, the number is 323-794-2093.  The conference ID is 6111858.

What to Listen For:

Have daily shipments of aggregates returned to pre-hurricane levels? In Q3, management noted shipments were back up to 7% year over year. They should now be at least at 7% growth.

Will gross margins improve in 2018? (expected to be 26% in 2017) The company invested over $500 million in equipment over the past two years and should see a benefit to margins as it delivers higher volume over these fixed expenses.