Option Investor
Newsletter

Daily Newsletter, Tuesday, 10/6/2009

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Falling Dollar Pushes Markets Higher

by Jim Brown

Click here to email Jim Brown

The markets continue to confound analysts with the best two days performance since the middle of August. It was not without some volatility with the Dow dropping -108 points off its high intraday.

Market Stats Table

There were no economic reports of note this morning and stocks reacted to the unexpected news that Australia raised rates and OPEC was holding secret meetings on replacing the dollar for pricing oil. This caused the U.S. Dollar index to gap lower by .5% and that invigorated stock and commodity prices. The dollar rallied intraday and that corresponded with the -100 point drop in the Dow intraday.

Dollar Index compared to Dow

Stocks were up globally on the Australian quarter point rate increase. Apparently a quarter point increase in rates off the 49 year low of 3% indicated economic growth on a global scale. Who knew Australia had that kind of economic power? I believe it is more likely shorts are afraid good news may breakout at any time and are overly cautious on any announcement.

Gold exploded on the drop in the dollar to a new nominal high of $1045 intraday. I say nominal because the inflation adjusted high from 1980 would be over $2300 today. Gold is being used today as a hedge against the drop in the dollar, a hedge against coming inflation and a hedge against a double dip recession.

Gold Chart

Stocks also got a boost from New York Fed President William Dudley saying the Fed will continue to keep rates at zero for a very long time. His concern was over the current deflationary pressures rather than speculation over possible future inflation. The Fed's favorite inflation indicator is the core PCE, which at 1.3% is well under the Fed's +2% inflation target. Dudley said the Fed expects the PCE to continue to weaken before hitting its lows in mid 2010. It is currently on track to post the slowest inflation growth in the last 50 years. Dudley also said analyst claims that the Fed's balance sheet will lead to higher inflation are not "well founded." Assets are now $2.14 trillion, up +43% on a year ago basis and well above the $900 billion back in 2007 before the crisis hit. All his views were not positive. He believes the current increase in real estate values and consumer spending. He feels once the housing stimulus ends consumers could fall into renewed trouble and jeopardize the recovery.

After the bell Yum Brands reported earnings for Q3 that rose +21% to 70-cents compared to estimates of 58-cents. Before you start thinking that the KFC on the corner must be trading in drugs out the back door along with chicken out the front door there was an * to the number. The majority of its profits came from its 3,300 restaurants in mainland China and strong cost cutting measures. Sales in China rose +11% for the quarter. YUM operates 36,000 stores in 110 countries. System wide sales were down -7% without accounting for the weak dollar. In the U.S. sales were down -6% at KFC and -13% at Pizza Hut. Overall revenue fell -2% to $2.78 billion. YUM said the overall worldwide environment continues to be challenging but they did raise full year estimates slightly. YUM rose +50 cents in after hours.

YUM Chart

Tomorrow typically marks the official start of the earnings cycle when Alcoa (AA) reports earnings. They are the first Dow component to report but not the biggest company to report on Wednesday. Also reporting are Monsanto (MON), Costco (COST), Family Dollar (FDO) and Ruby Tuesday (RT).

Earnings are widely expected to beat estimates but most analysts claim this is already priced into the market. Most earnings are going to come from extensive cost cutting rather than from rapidly increasing sales. Smith Barney's Tobias Lefkovitch said today that it will take more than a strong earnings beat for stocks to outperform. I would take a blowout beat to push stocks higher. In Q2 75% of companies ended up beating estimates. That was a record with most bullish quarters seeing a high of 60-65% of companies beat. How do you compete with a record quarter? Since the earnings came on cost cutting it would really help if companies could show an increase in top line sales. But YUM, a very low dollar price point product saw same store sales decline -10% in the USA. If people are not buying cheap fast food then I doubt they are buying flat screen TVs and other consumer items. It will be an interesting earnings cycle for sure.

American Airlines (AMR) has implemented a miscellaneous surcharge of $10 on each leg of travel on high volume travel days. For instance if you book a flight the Wednesday before Thanksgiving and return on the Sunday after the holiday your will be charged extra on each leg of the trip. The plan was immediately copied by UAL, LCC and DAL. AMR immediately added 10 more dates to the surcharge list. American also announced a $249 "check all you want" bag fee. I guess if you are going to Paris for a month with your wife then all the bags can go on one ticket for $249. Amazing what travelers are paying for now that used to be free. Southwest has been running a lot more of the "bags fly free" ads and you can bet they are cashing in on the promotion. They also did not add the holiday surcharges.

With rising oil prices I am sure there will be further increases in airline travel prices. Crude rose to $72 intraday after the EIA raised their oil demand estimates for Q4. The EIA said they now expect a 410,000 bpd increase in oil demand for Q4. This is up from their last estimate revision of 240,000 bpd a month ago. This would put demand for all of 2009 around 83.67 mbpd compared to the 2008 level of 85.46 mbpd. The EIA also expects demand to climb in 2010 by another 1.1 mbpd compared to 2009. This was 200,000 bpd higher than their last estimate. Sustained growth in China and signs of a turnaround in other Asian countries led to the rising estimates. Chinese demand is expected to be 8.17 mbpd in 2009. US Demand is expected to rise 320,000 bpd in 2010. These estimates change every month so this is not a hard and fast number but merely a moving target of expectations.

Oil Futures Chart

I explained a lot about the labor market and unemployment problem in the Sunday newsletter. On Monday two Rutgers economists released a disturbing forecast. They claim the U.S. may not be back to full employment until 2017 or longer even if the economy adds two million jobs a year starting in 2010. Even worse they pointed out that a seven year economic expansion cycle would be about twice as long as the average for postwar recoveries. In other words we could only be halfway out of the unemployment slump when the next recession hits in 3-4 years. They pointed out that job creation after the 2001 recession through 2007 was anemic at best. You may remember the oft-repeated phrase "jobless recovery" throughout those years.

The Rutgers economists are calling 1999-2009 the lost employment decade since there are roughly 1.3 million fewer jobs as we near the end of 2009 as there were at the end of 1999. This is the first time since the Great Depression that America has seen jobs decline over a 10-year period. Pimco's Mohamed El-Erian and Nouriel Roubini have repeatedly warned that the 15-17 million people currently unemployed would be a significant drain on the economy in the coming years with pressures on consumption, housing and welfare system. Over the last 30 years the number of male manufacturing jobs as a percentage of all jobs has fallen from 35% to only 19% today. These jobs are not coming back because they are now in Mexico, China and other Asian countries. If there is going to be an explosive recovery that pulls America out of the recession it is going to come from somewhere else on the globe.

Bloomberg reported today that apartment vacancies rose +7.8% in Q3 and the highest level since 1986. Rising unemployment is reducing demand for rentals despite the flight of prior homeowners to apartments after they lost their homes. Actual rents fell -2.7% during the quarter. Vacancy rates are expected to drop even further in Q4.

The Treasury auctioned $39 billion of 3-year notes on Tuesday and demand was still good. The auction rated a B+ grade on the bid to cover ratio of 2.72 and price. On Wednesday there will be $20 billion of 10-year notes and $12 billion of 30-year paper will be sold on Thursday. You hear a lot in the press about the large amount of U.S. debt held by foreign countries. If you glance at the table below I think you will be surprised by the amount of debt NOT held by foreign countries. This is just the top 15 in a very long list of debt holders but you get the idea. It is also a lagging total. The Treasury has auctioned over $700 billion in various notes since these numbers were collected in June. What does it mean that various government agencies including the Federal Reserve are holding over $5 trillion in government debt? I think this is almost more troubling than China holding nearly $900 billion but I am not an economist.

Top Debt Holders Table

It was an ugly day in the markets for me with the Dow up triple digits for the second day. Why? Because I was expecting a move in the other direction. I don't completely understand this rally because everyone will tell you the technicals are terrible and the earnings are already priced into the market. Obviously "everybody" is wrong or so it appears. Economics appear to be getting worse on everything but ISM Services but stocks keep moving higher. The decline we had last week was more of an air pocket than a decline and short-term resistance held. Is that it for an October decline? Personally I am still expecting a lower low over the next couple weeks but I am outnumbered today. Unfortunately another high profile personality, Jim Cramer, told his listeners after the close to take profits at these levels. If he is telling listeners to sell then we are obviously going higher.

I am not going to repeat my reasons I am expecting a lower low and frankly they don't count if the market is moving higher. I have learned my lesson in the past that the markets can remain irrational far longer than I can remain liquid. I am a firm believer in trading what you see rather than what you believe but when in doubt I stay out. I am out at present but I will not hesitate to go long if the markets move over resistance from late September.

The Dow rallied to 9774 and exactly to initial resistance from late September. It failed at that level and retreated from +175 to +75 in afternoon trading before a recovery at the close to 9731. The Dow has resistance from 9775 to 9850 and after two days of strong gains I would be surprised to see that resistance broken on Wednesday but I have already been surprised twice this week. The third time is the charm and a move over 9850 would be very bullish. The same six Dow components at the top of the leader board were the same as Monday.

Dow Chart

Dow Component Table

The S&P rallied to exactly 1060 and the beginning of strong resistance that extends to 1075. I would expect a break over 1060 to produce short covering but that resistance range from 1060-1075 could also attract new shorts. This is a very critical resistance range that may control the next couple weeks of trading. I remain skeptical that we will breakout this week but I am not betting against it.

SPX Chart

The Nasdaq was buoyed by upgrades to Apple and Intel and a new high of $190 on Apple with a $4 gain. RIMM is still not participating but at least it seems to have found support at $65. Resistance on the Nasdaq is 2120, 2140 and 2160 with a close at 2100. These resistance levels have held since Sept 15th and this is October and portfolio restructure month. The Nasdaq appears a little weaker than the Dow/S&P but it could be just my perception colored by my bias.

Nasdaq Chart

I am really afraid of a sell the news event on earnings. I still believe the market is priced to perfection and I seriously doubt that earnings perfection will appear. I know earnings will be good but will they be good enough to push us higher? On the Russell chart below I show one possibility for your consideration. If Tuesday's high turns out to be another lower high the technicians would immediately begin to worry about a lower low. On the Russell the 570 level would be ideal since it is uptrend support. I would be a buyer of that dip.

Russell Chart

This could turn out to be a pivotal week in many ways. I would love to see the rally explode higher and everyone but me make a killing. There is no lonelier place than being the cautious trader on the sidelines in cash and standing alone while the bulls race higher. I doubt I am the only one but I am the only one I see tonight.

Jim Brown


New Option Plays

Building Momentum Again

by James Brown

Click here to email James Brown


NEW DIRECTIONAL CALL PLAYS

Apple Inc. - AAPL - close: 190.01 change: +3.98 stop: 184.75

Why We Like It:
AAPL is breaking out from a three-week consolidation and looks ready to lead the market higher. The next level of significant resistance is the $200 mark and AAPL could easily produce pre-earnings run up to this psychological level.

I'm suggesting bullish positions now or on a dip in the $187-185 zone. We'll use a stop loss at $184.75. Our first target to take profits (I'd exit 2/3rds of our position) is at $199.50. We will cautiously set a secondary target at $210. The P&F chart is currently forecasting a $231 target.

FYI: We will exit ahead of the October 19th earnings report. October options expire after Friday October 16th. Aggressive traders could play the October calls and I'd use the $190 strike. The rest of us will want to consider November calls and I'd use the $200 strike.

Suggested Options:
October or November calls. If you play October be sure to exit before they expire.

BUY CALL OCT 190*APV-JR open interest=28733 current ask $3.95
BUY CALL OCT 200 APV-JT open interest=33556 current ask $0.91

BUY CALL NOV 190 APV-KR open interest=4475 current ask $10.10
BUY CALL NOV 200*APV-KT open interest=10860 current ask $5.95

Annotated Chart:

Picked on   October 06 at $190.01
Change since picked:       + 0.00
Earnings Date            10/19/09 (confirmed)
Average Daily Volume =       17.8 million  
Listed on   October 06, 2009         


Express Scripts - ESRX - close: 78.04 change: +1.17 stop: 74.90

Why We Like It:
ESRX is bouncing from support near $75.00 and technical indicators are turning positive again. Shares are already inside a long-term up trend from their March lows. The $80.00 level is resistance but I strongly suspect that with a positive market ESRX will breakout to new highs. I'm suggesting bullish positions now. We'll use a stop under support at $75.00. Our first target is $82.50. Our second target is $84.95.

Suggested Options:
I am suggesting the November calls. My preference is the $80 strike.

BUY CALL NOV 80.00 XTQ-KP open interest=1723 current ask $3.10

Annotated Chart:

Picked on   October 06 at $ 78.04
Change since picked:       + 0.00
Earnings Date            10/28/09 (confirmed)
Average Daily Volume =        2.1 million  
Listed on   October 06, 2009         


Gold ETF - GLD - close: 102.28 change: +2.46 stop: 97.40

Why We Like It:
Gold has broken out to new all-time highs and the GLD gold ETF has finally broken out past resistance at the $100 mark. I would prefer to buy call son a dip near $100.00 but we may not get that opportunity so I'm suggesting small positions now (1/2 to 1/4 your normal size).

The weekly chart has an inverse head-and-shoulders pattern that is forecasting a huge upward target around $130ish but that could take several months to be achieved. Short-term (several weeks) I'm looking for a move to $109.90 as our first target. We'll set a second target soon.

Suggested Options:
I'm suggesting the November and January strikes. My preference is the NOV 105s and the 2010 January 110s.

BUY CALL NOV 105 GCZ-KA open interest=3012 current ask $2.45

BUY CALL JAN 110 GCZ-AF open interest=67133 current ask $3.00

Annotated Chart:

Picked on   October 06 at $102.28
Change since picked:       + 0.00
Earnings Date            00/00/00
Average Daily Volume =       14.2 million  
Listed on   October 06, 2009         



In Play Updates and Reviews

Gaining Momentum

by James Brown

Click here to email James Brown


CALL Play Updates

Alcon Inc. - ACL - close: 136.60 change: +0.37 stop: 133.90

ACL is still under performing the market during this two-day bounce. Readers may want to take a more conservative approach to launching new positions and wait for a new move over $138.50 or $140.00. ACL has already hit our first target. Our second target is $148.00.

Picked on September 10 at $136.75
Change since picked:       - 0.15
                             /1st target hit @ 142.50 (+4.2%)
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        299 thousand 
Listed on September 10, 2009         


Allegheny Tech. - ATI - close: 35.24 change: +0.61 stop: 31.70

ATI rallied toward resistance near $36.00 this morning and stalled. Short-term ATI might see another dip toward the $34.00-33.50 zone before moving higher. I'm not suggesting new positions at this time. ATI has exceeded our first target. We're currently aiming for $37.00.

Picked on   August 31 at $ 30.25 *triggered         
Change since picked:      + 4.99 
                               /1st target hit @ 33.85 (+11.9%)
Earnings Date           10/21/09 (unconfirmed)
Average Daily Volume =       2.7 million  
Listed on August 27, 2009         


Caterpillar - CAT - close: 51.70 change: +0.95 stop: 47.49

CAT gapped open higher, rallied to $52.39 and then pared its gains. I'm still bullish here but readers may want to wait for dips in the $51.00-50.00 zone as an entry point.

Our first target is $54.50. Our second target is $59.00. FYI: The P&F chart is bullish with an $85 target.

Picked on   October 01 at $ 50.00
Change since picked:       + 1.70
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =         10 million  
Listed on September 19, 2009         


Core Labs - CLB - close: 102.63 change: +1.24 stop: 93.90

We may need to adjust our strategy for entering bullish positions on CLB. Currently the plan is to buy calls on a dip at $96.00. I'm starting to think we may want to buy calls on another dip near $99.00 or a breakout over $104-105.

Picked on September xx at $ xx.xx <-- TRIGGER @ 96.00
Change since picked:       + 0.00
Earnings Date            10/21/09 (unconfirmed)
Average Daily Volume =        175 thousand 
Listed on September 23, 2009         


Canadian Nat. Res. - CNQ - close: 66.82 change: +1.78 stop: 61.90

CNQ rallied like we thought it would but unfortunately the stock gapped open higher at $67.01 this morning. I've adjusted our entry point. I would still consider new bullish positions on a dip near $65.00. Our first target is $71.50.

Picked on   October 05 at $ 67.01 /gap higher entry
                                /originally listed at $65.04
Change since picked:       - 0.19
Earnings Date            11/05/09 (confirmed)
Average Daily Volume =        6.4 million  
Listed on   October 05, 2009         


Consol Energy - CNX - close: 47.55 change: +2.03 stop: 41.90 *new*

The rally in CNX continues and shares are close to hitting our first target at $48.50. Readers can use dips near $45.00 as a new entry point. I'm raising the stop loss to $41.90.

Our first target is $48.50. Our second target is $52.40. We'll plan to exit ahead of the late October earnings report. FYI: The Point & Figure chart is forecasting a $73 target.

Picked on September 25 at $ 43.77 /gap down entry
Change since picked:       + 3.78
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on September 19, 2009         


Capella Education - CPLA - close: 69.64 change: +1.16 stop: 62.90

CPLA continues to show strength but the stock is now testing round-number resistance near $70.00. This would be a logical place to see a little correction. I am raising our trigger to buy a dip from $65.25 to $65.75. I'm raising the stop loss to $62.90.

If triggered our first target is $69.75. Our secondary target is $74.00 but we'll exit ahead of the late October earnings report. FYI: The Point & Figure chart is bullish with an $82 target.

Trading note: CPLA doesn't have a lot of volume and neither do the options. I would keep positions small.

Picked on   October xx at $ xx.xx <-- TRIGGER $65.75
Change since picked:       + 0.00
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        145 thousand 
Listed on   October 03, 2009         


Danaher Corp. - DHR - close: 65.52 change: +0.48 stop: 63.95

DHR managed a 0.7% bounce but failed to break the short-term bearish trend of lower highs. The move is disappointing and more conservative traders may want to exit early. I'm not suggesting new positions at this time.

Our first target is $69.50. The Point & Figure chart is bullish with a $77 target. Currently we only have half a position open to limit our risk given the aggressive entry point.

Picked on September 05 at $ 66.37 (buy 1/2 position)
               /originally listed at $65.76, gap higher entry @ 66.37
Change since picked:       - 0.85
Earnings Date            10/22/09 (confirmed)
Average Daily Volume =        2.4 million  
Listed on September 05, 2009         


Diamond Offshore - DO - close: 96.96 change: +2.79 stop: 89.75

DO managed to hit new 2009 highs at $97.70. The stock might try and fill the gap from this morning and readers could use a dip near $94.00 as a new entry point.

Our first target is $99.90. Our second target is $104.50. More aggressive traders can aim for $110. The P&F chart is forecasting a $114 target. The plan was to use small position sizes.

Picked on September 15 at $ 94.69 *adjusted entry point
Change since picked:       + 2.27
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        1.8 million  
Listed on September 12, 2009         


Dril-Quip, Inc. - DRQ - close: 51.15 change: +1.61 stop: 45.90

DRQ also rallied to new one-year highs. The close above the $50.00 mark is bullish.

More conservative traders may want to raise their stops toward $47.00.

Our first target is $53.00. Our second target is $57.50. The Point & Figure chart is bullish with a $65.00 target.

Picked on September 28 at $ 48.50
Change since picked:       + 2.65
Earnings Date            11/10/09 (unconfirmed)
Average Daily Volume =        282 thousand 
Listed on September 26, 2009         


Flowserve - FLS - close: 100.62 change: +1.33 stop: 89.40

We may want to change our entry point strategy on FLS soon. Right now the plan is to buy calls on a dip at $91.00. We might want to reconsider and use a breakout over $102.50 or another dip near $96.00 as a bullish entry point.

We will plan to exit ahead of the late October earnings report.

Picked on September xx at $ xx.xx <-- TRIGGER @ 91.00
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        1.2 million  
Listed on September 19, 2009         


General Dynamic - GD - close: 65.92 change: +1.15 stop: 59.85

GD is rising to new one-year highs. I am raising our trigger to buy calls to $62.50 and I'm raising the stop loss to $59.85.

Our first target is $66.00.

Picked on September xx at $ xx.xx <-- TRIGGER @ 62.50
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        2.3 million  
Listed on September 09, 2009         


Illumina Inc. - ILMN - close: 43.14 change: +0.23 stop: 37.75

I am raising our trigger to buy calls from $39.10 to $40.10. We'll adjust the stop loss to $37.75.

If we are triggered at $40.10 our first target is $44.00. We plan to exit before the October earnings report.

Picked on September xx at $ xx.xx <-- TRIGGER @ 40.10
Change since picked:       + 0.00
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =        1.6 million  
Listed on September 26, 2009         


iShares Financials - IYF - close: 52.52 change: +0.59 stop: 49.49

Financials appear to be breaking out from a bull-flag pattern. The action today was bullish. The IYF gapped higher, but retraced its steps to fill the gap and then rallied back into the closing bell. I see this as a new bullish entry point. Our first target is $57.00. Our second target is $60.00.

Picked on September 15 at $ 52.60 *triggered  
Change since picked:       - 0.08
Earnings Date            00/00/00
Average Daily Volume =        5.1 million  
Listed on September 01, 2009         


PPG Inds. Inc. - PPG - close: 58.03 change: +0.49 stop: 54.95

PPG did rally past the $58.50 level but it failed to close above it. The short-term action looks bullish. If you open new positions now do so with a small position size.

PPG has already exceeded our first target and we're currently aiming for $63.00.

Picked on   August 28 at $ 55.65
Change since picked:      + 2.38
                             /1st target exceeded @ 60.05 (7.9%)
Earnings Date           10/15/09 (confirmed)
Average Daily Volume =       1.6 million  
Listed on August 27, 2009         


SOHU.com Inc. - SOHU - close: 67.06 change: +1.61 stop: 63.75

This looks like a new entry point on SOHU. Shares are bouncing from previous resistance and what should be short-term support at $66.00. We are planning to exit ahead of the late October earnings report so consider the November $70 calls (TKZ-KN).

Our first target is $72.50. Our second target is $77.00.

Picked on   October 01 at $ 68.24 /gap open entry
                                 (small positions 1/2 to 1/4)
Change since picked:       - 1.18
Earnings Date            10/26/09 (unconfirmed)
Average Daily Volume =        577 thousand 
Listed on September 15, 2009         


Waters Corp. - WAT - close: 56.21 change: +0.73 stop: 53.25 *new*

The close over $56.00 is a bullish sign for WAT. Friday's low was $53.50. I'm raising our stop loss to $53.25. I would still open new positions now. Our plan is to use small position sizes (1/2 to 1/4 our normal size).

Our first target is $59.50. We do not want to hold over the mid October earnings report.

Picked on September 28 at $ 55.43 *new entry
Change since picked:       + 0.78
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =        809 thousand 
Listed on September 12, 2009         


PUT Play Updates

BIOGEN IDEC - BIIB - close: 49.02 change: +0.48 stop: 52.15

BIIB delivered a 0.9% bounce but the rally struggled near $49.50 and its 50-dma and 200-dma. A failed rally near $50.00 could be used as a new bearish entry point.

Don't forget - this is a higher-risk play because we're choosing to hold over the earnings report!

Our first target to take profits is at $44.50. Our second target is $40.50. FYI: The P&F chart is bearish with a $36 target.

Picked on   October 03 at $ 48.89
Change since picked:       + 0.13
Earnings Date            10/15/09 (unconfirmed)
Average Daily Volume =        2.6 million  
Listed on   October 03, 2009         


Strangle & Spread Play Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

Cigna Corp. - CI - close: 28.68 change: -0.02 stop: n/a

CI under performed the market today but the short-term consolidation is starting to look more bullish. I'm not suggesting new positions at this time.

The options I suggested were the October $35 calls (CI-JG) and the October $25 puts (CI-VE). Our estimated cost was $1.20. We want to sell if either option hits $2.50 or higher. The closer we can open this trade to $30.00 the better.

Picked on September 08 at $ 29.40
Change since picked:       - 0.72
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 08, 2009         


CLOSED BULLISH PLAYS

Compass Minerals - CMP - close: 62.34 chg: +2.16 stop: 56.40

Target achieved. At first glance I thought there was a bad tick in CMP. Yet shares really did trade to $64.99. Our second and final target was $64.00. The trend is still up so readers may not want to exit and just let it ride although you may want to use a higher stop loss.

Chart:

Picked on September 03 at $ 55.55
Change since picked:       + 8.45 <-- exit 64.00 (+15.2%)
                               /1st target hit @ 59.75 (+7.5%)
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        415 thousand 
Listed on September 02, 2009         


CLOSED BEARISH PLAYS

Amazon.com - AMZN - close: 90.91 chg: +2.24 stop: 92.55

I think it's prudent for traders to abandon ship with our AMZN put play. The market's showing a lot more resilience than expected. AMZN's close back above $90.00 is bullish. Another failed rally at $94.00 could be used as a bearish entry point but in this market environment I'd be looking for a breakout over $94.00.

Chart:

Picked on   October 03 at $ 89.85
Change since picked:       + 1.06 <-- exit early (+1.1%)
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        6.2 million  
Listed on   October 03, 2009