Closed Plays


UNG, we have closed our play on the Natural Gas ETF.


Play Updates


ACGY $10.48 +0.03 -- Acergy S.A.

ACGY is still consolidating sideways with a $1.00 range for the week. Thus far the trend of higher lows is still in place. More conservative traders may want to consider a higher stop loss.

I'm not suggesting new LEAPS positions at this time. Our stop is at $6.95. Our plan is to exit in the $14.50-15.00 zone.

April 25th, 2009 - entry price on ACGY @ 7.61, option @ 1.05
symbol: QLS-AB, 2010 JAN $10 LEAP call - current bid/ask $1.55/2.10
-stop loss on ACGY @ 6.95

Chart of ACGY


ACI $17.72 +0.29 -- Arch Coal Inc.

Coal stocks also spent last wee consolidating lower. ACI is developing a pattern of higher lows and lower highs, which is normally neutral. We might be better off waiting to buy a breakout over $19.00 or $20.00 (given the exponential 200-dma near $20) instead of a dip near $16.00. Our long-term target is the $30 region. If you do launch new positions I would buy the 2010 January $20 calls or 2011 January $25 calls rather than the ones originally listed below.

May 14th, 2009 - entry price on ACI @ 16.00, option @ 1.30
symbol: ACI-AE, 2010 JAN $25 LEAP call - current bid/ask .30/0.40
-stop loss on ACI @ 12.85

-or-

May 14th, 2009 - entry price on ACI @ 16.00, option @ 2.40
symbol: OSE-AF, 2011 JAN $30 LEAP call - current bid/ask $1.00/1.15
-stop loss on ACI @ 12.85

Chart of ACI:


ANR $34.45 +0.56 - Alpha Natural Resources, Inc.

ANR is another resource play. The stock was on our watch list. The plan was to buy half our LEAPS position at $34.00 and then buy the second half on a bounce near $30.00. We'll use a trigger at $30.50. The $30.00 level is round-number, psychological support that's also bolstered by the 50-dma and exponential 200-dma. Our long-term target is the $45.00-50.00 zone.

Aug. 25th, 2009 - entry price on ANR @ 34.00, option @ 5.10
symbol: ANR-AG, 2010 JAN $35 LEAP call - current bid/ask $4.40/5.00
-stop loss on ANR @ 29.50
bought 1/2 LEAP position on 08/25/09 (option price @ 5.10)
plan to buy 2nd half when ANR hits $30.50.

-or-

Aug. 25th, 2009 - entry price on ANR @ 34.00, option @ 7.00
symbol: VJV-AH, 2011 JAN $40 LEAP call - current bid/ask $7.20/7.80
-stop loss on ANR @ 29.50
bought 1/2 LEAP position on 08/25/09 (option price @ 7.00)
plan to buy 2nd half when ANR hits $30.50.

Chart of ANR:


BAC $17.98 +0.06 - Bank of America Corp.

BAC continues to inch higher but traders should note that the stock has formed a bearish pattern over the last few weeks. This is suggesting the next significant move will be down. Nimble traders might be tempted to take profits soon and scale back in on a correction. I'm not suggesting new positions at this time.

I want to remind readers that this is a long-term, two-year trade. Our exit target is the $30-40 zone. I'm adding a stop loss at breakeven $6.24 on BAC. More conservative traders may want to place theirs higher (maybe just under $10 or $11).

Jan 25th, 2009 - entry price on BAC @ 6.24, option @ 2.38
symbol: VBA-AB, JAN 2011 $10 LEAP call - current bid/ask $9.10/9.20
-stop loss on BAC @ 6.24

Chart of BAC


CRM $52.25 -0.43 -- Salesforce.com

After big gains two weeks ago CRM just spent last week consolidating sideways. There is a good chance that CRM will eventually fill the gap. More conservative traders may want to exit completely if they have not done so already. Our second and final target is $57.00. I am not suggesting new positions at this time.

I want to repeat - if you have not taken some profits off the table I suggest you do so now.

April 1st, 2009 - entry price on CRM @ 30.00, option @ 4.30
symbol: CRM-AH, JAN 2010 $40 LEAP call - current bid/ask $13.60/13.90
-stop loss on CRM @ 42.50.
(note: readers reported getting a better entry price than $4.30)
08-21-09 sold half, gap higher @ $51.65 (option opened @ $14.50 +237%)

-or-

April 1st, 2009 - entry price on CRM @ 30.00, option @ 2.00
symbol: CRM-AI, JAN 2010 $45 LEAP call - current bid/ask $ 9.90/10.10
-stop loss on CRM @ 42.50.
08-21-09 sold half, gap higher @ 51.65 (option opened @ $9.90 +395%)

Chart of CRM:


DBC $22.73 -0.05 -- PowerShares DB Commodity Index (ETF)

It's the same story here. DBC has been consolidating sideways. Aggressive traders might want to consider buying LEAPS on a rise above $23.50 and its 200-ema. I would suggest waiting for a dip near its longer-term trendline of higher lows. Our long-term target is $30.00.

FYI: The DBC is an ETF on the Deutsche Bank Liquid Commodity index using futures on light sweet crude oil, heating oil, aluminum, gold, corn and wheat.

July 6th, 2009 - entry price on DBC @ 21.50, option @ 4.28
symbol: VCZ-AT, 2011 JAN $20 LEAP call - current bid/ask $4.10/5.00
-stop loss on DBC @ 18.90.

-or-

July 6th, 2009 - entry price on DBC @ 21.50, option @ 2.62
symbol: VCZ-AY, 2011 JAN $25 LEAP call - current bid/ask $2.10/2.60
-stop loss on DBC @ 18.90.

Chart of DBC:


DISH $16.86 +0.05 -- Dish Network Corp.

DISH is also sliding sideways. The stock is testing technical support at its 50-dma and exponential 200-dma. I would still buy LEAPS here but more conservative traders may want to wait for a bounce over $17.50 or the $18.00 level to initiate positions. Our long-term target is the $25.00-30.00 zone.

August 22nd, 2009 - entry price on DISH @ 17.18, option @ $3.20
symbol: HSW-AC, 2010 JAN $15 call - current bid/ask $3.00/3.10
-stop loss on DISH @ 15.45.

Chart of DISH:


DO $90.76 -0.28 -- Diamond Offshore

DO broke higher last week but spent a few days consolidating sideways. More aggressive traders may want to open small positions now. Or readers might want to use a breakout trigger over $95.00 as an entry point. I am bumping up our trigger to buy LEAPS from $85.50 to $86.50. I'm raising the stop loss to $79.45. Our first target is $109.00. We can expect resistance about every $5.00 at $95, $100, etc. Readers might want to consider the 2011 January calls.

-NEW- Buy the dip trigger: $86.50

BUY 2010 JANUARY $90 CALL (symbol: KWJ-AR)
-or-
BUY 2010 JANUARY $100 CALL (symbol: KWJ-AT)

Chart of DO:


DXO $4.70 -0.04 -- Deutsche Bank Double-long Oil ETN

The commodity and resource ETFs have come under scrutiny as the CFTC looks into whether these exchange traded funds should be affected by position limits and if so how big of a limit should they be allowed to take? This represents a potential danger for us. Hypothetically if the DXO owns 20% of the market in oil futures and the CFTC says they can only own 10% (or less) then shares of DXO could drop in a hurry. Deutsche Bank has already stopped issuing new shares of the DXO as they wait for the CFTC's decision. Until this issue is resolved we need to be a lot more cautious on our DXO positions.

I am suggesting a stop loss at $4.25, which is just under the August low of $4.29. More aggressive traders could put their stops under $4.00 and the 100-dma, which is close to the longer-term trend of higher lows. If we do get stopped out at $4.25 we'll reconsider new positions after any decision by the CFTC.

Prior comments on this play:
The DXO is our long-term oil position. When we say long-term we're talking two or three years (or more). Currently the plan is to build a long-term position averaging down on dips. The $2.50 region is the sweet spot to buy the DXO. Anything under $2.50 is a gift. I want to repeat that this is not a trade. It's a multi-year investment. Currently our exit target is the $25.00 to $30.00 zone.

The Crude oil double-long ETN (exchange-traded note) offers investors two times the leveraged exposure to the monthly performance of the Deutsche Bank optimum yield crude oil index plus the monthly TBill index return.

Basically, when oil was $147 a barrel this ETN was $29.65. If oil returns to the $150 range over the next few years this ETN could rally to $30 for a 1500% return. This ETN does not expire. It can be used in IRAs and has no margin requirements like crude oil futures.

ETN Info:

Deutsche Bank ETN Fact Sheet

Deutsche Bank Pricing Description

Our plan called for buying this ETN instead of the options.

Current position in the DXO = $2.15 entry (NEW STOP @ 4.25)

Chart of DXO


FAS $80.20 +0.49 - Direxion Fincl.Bull 3x ETF

FAS has tagged new seven-month highs but shares appear to be forming a bearish wedge-like pattern. More conservative traders may want to take some more money off the table. Any correction will probably be pretty steep. I am raising our stop loss to $35.00, which is just under the July lows. More conservative traders looking to just raise their stop may want to up theirs toward the $50 level instead.

I am not suggesting new bullish positions in FAS at this time.

Currently we have sold one third of our position at $60.00 (pre-split price of $12.00) and we plan to sell another third at $120.00. Honestly, I'm thinking we may want to take profits at $90.00 but we'll make that decision when the FAS gets there. We'll re-evaluate our final target for the last third of our position as needed. FYI: On July 9th, 2009 the FAS performed a 1:5 reverse split.

Our plan called for buying the ETF instead of the options.

Current position in the FAS = $2.64 entry (stop loss: 7.00)
post-split prices are: $13.20 entry (stop loss: 35.00)

Exit 1/3 position @ 60.00 (+354%) /pre-split: 12.00

Chart of FAS

Chart of RIFIN (Russell 1000 financial services)


FCX $65.48 +1.22 - Freeport McMoran

Resource stocks continue to drift higher on hopes for the economic recovery and expectations for a weak dollar. FCX is back near its 2009 highs although shares could be forming a bearish, wedge-shaped pattern.

I'm not suggesting new long-term LEAPS positions at this time. I am suggesting that we sell 50% to 75% of our position at $69.00 and we'll maintain a small position and exit completely at $77.50.

June 22nd, 2009 - entry price on FCX @ 46.00, option @ 6.00
symbol: FCX-AK, 2010 JAN $55 LEAP call - current bid/ask $14.65/14.80
-stop loss on FCX @ 39.45
-or-
June 22nd, 2009 - entry price on FCX @ 46.00, option @ 10.00
symbol: OBQ-AL, 2011 JAN $60 LEAP call - current bid/ask $17.90/18.45
-stop loss on FCX @ 39.45

Chart of FCX:


FSLR $124.21 - 1.67 -- First Solar

The oversold bounce in FSLR is struggling. Shares just failed near their 10-dma. I am still expecting a dip toward the $100 level. We're not suggesting new positions at this time. At the moment we're long the 2010 January $100 put and we have a covered call play that should be fine if FSLR stays above $100.

Covered Call position:

Long 100 shares of FSLR @ $128.00
Short 2010 $150 LEAPS Call LZL-AA @ $40.70
Profit if called is $40.70 in option premium + $22 in stock (+49%)

Put Spread position:

Long 2010 $100 LEAPS Put LQM-MT @ $32.90
Short 2010 $250 LEAPS Put LZL-MJ @ $135.70, net credit $103

- Update 08/15/09 -
Cover the 2010 $250 Put at $109.40. Keep the $100 put.

Currently the 2010 Jan. $100 put is worth (bid) $7.40.
If you're curious the 2010 Jan. $150 call is at $ 7.60.

Chart of FSLR


GT $16.20 -0.80 -- Goodyear Tire & Rubber Co.

After an amazing July-August rally GT is finally starting to correct. Shares should find some support in the $15.00-14.00 zone. More conservative traders may want to consider raising their stops toward $12.

I'm not suggesting new LEAPS positions at these levels. I am adjusting our exit target. We want to sell half at $22.75 and half at $26.75.

June 6th, 2009 - entry price on GT @ 12.94, option @ 2.20
symbol: GT-AC, 2010 $15 LEAP call - current bid/ask $2.90/3.00
-stop loss on GT @ 9.90.
-or-
June 6th, 2009 - entry price on GT @ 12.94, option @ 2.65
symbol: VYR-AD, 2011 $20 LEAP call - current bid/ask $2.85/3.10
-stop loss on GT @ 9.90.

Chart of GT:


HOS $22.34 +0.04 -- Hornbeck Offshore Services

HOS is almost unchanged on the week. Volume has all but dried up. A breakout past its exponential 200-dma near $23.50 might be a new bullish entry point to buy LEAPS. Our long-term target is $35.00.

June 27th, 2009 - entry price on HOS @ 21.20, option @ 4.90
symbol: HOS-AD, 2010 JAN $20 LEAP call - current bid/ask $3.90/4.60
-stop loss on HOS @ 17.85
-or-
June 27th, 2009 - entry price on HOS @ 21.20, option @ 2.70
symbol: HOS-AE, 2010 JAN $25 LEAP call - current bid/ask $1.65/2.05
-stop loss on HOS @ 17.85

Chart of HOS:


INTC $20.25 +0.78 -- Intel Corp.

INTC continues to surprise. The slow drift lower turned higher last week. Then things really got exciting on Friday. The company raised their third quarter revenue guidance and guided gross margins to the upper half of their previous range. This is really good news and a good sign that businesses are beginning to restock their inventories. Shares of INTC gapped open higher on Friday. I would expect INTC to fill the gap before moving higher. Please note our new stop loss at $15.90. Our long-term target is the $24-26 zone.

FYI: Shares of Intel don't move very fast. Readers might want to consider turning this play into a calendar or diagonal spread to further maximize your gains.

June 13th, 2009 - entry price on INTC @ 16.31, option @ 1.36
symbol: VNL-AD, 2011 LEAP $20 call - current bid/ask $3.05/3.10
-stop loss on INTC @ 15.90.

Chart of INTC:


JOYG $39.34 -0.18 -- Joy Global Inc.

JOYG is under performing its rival FCX. Shares traded sideways last week around its 38.2% Fibonacci retracement of its July-August run. I am not suggesting new long-term bullish positions at this time.

TRADING NOTE: JOYG is due to report earnings on Wednesday, September 2nd before the opening bell. Readers may want to protect themselves with some short-term, out of the money (cheap) puts just in case the company says something disappointing. The idea is that cheap puts act as temporary insurance should JOYG plummet on its earnings report. If JOYG rallies post earnings the puts usually evaporate. It's up to you if you want to pay for a little "insurance" or not.

The last few quarters JOYG has been beating the estimate. Thus expectations might be too high if they miss or only come inline. At the same time if JOYG does move lower I would expect to see support near $35.00 so puts may not pay off.

June 22nd, 2009 - entry price on JOYG @ 33.00, option @ 3.80
symbol: JQY-AH, 2010 JAN $40 LEAP call - current bid/ask $4.90/5.10
-stop loss on JOYG @ 29.00
-or-
June 22nd, 2009 - entry price on JOYG @ 33.00, option @ 6.90
symbol: ZMC-AH, 2011 JAN $40 LEAP call - current bid/ask $ 9.50/ 9.90
-stop loss on JOYG @ 29.00

Chart of JOYG:


KSU $24.99 +1.37 -- Kansas City Southern

KSU has gone from a real under performer back in May and June to a real out performer for July and August. Shares just broke higher again on Friday with a 5.8% rally and a close over resistance at $24.00. I could not find any specific news for the move. The stock is extremely overbought now and I'm not suggesting new long-term LEAPS positions at this time. Please note our new stop loss at $17.99. More conservative traders may want to raise their stops closer to $20.00 instead. Our long-term target is the $27.50-30.00 zone.

May 9th, 2009 - entry price on KSU @ 17.01, option @ 0.90
symbol: KSU-AE, 2010 JAN $25 call - current bid/ask $2.80/3.10
-stop loss on KSU @ 17.99.

Chart of KSU:


LNN $43.20 -0.94 -- Lindsay Corp.

LNN has started to correct after an impressive August rally. Shares should find support in the $42.00-40.00 zone. We can use a dip or a bounce in that area as a new bullish entry point to buy LEAPS.

We want to sell half our LEAPS position at $49.50 and half at $59.50. I am raising our stop loss to $34.50.

August 7, 2009 - entry price on LNN @ 41.55, option @ 8.80
symbol: NRR-AG, 2010 JAN $35 LEAP call - current bid/ask $ 9.70/10.90
-stop loss on LNN @ 34.50
-or-
August 7, 2009 - entry price on LNN @ 41.55, option @ 6.00
symbol: NRR-AH, 2010 JAN $40 LEAP call - current bid/ask $6.60/7.30
-stop loss on LNN @ 34.50

Chart of LNN:


MDR $24.04 -0.01 - McDermott Intl. Inc.

MDR spiked to new highs on Monday. Then after a 10% correction traders bought the dip again on Thursday. The path of least resistance is still up. We want to sell 50% to 75% of our position at $29.75. We'll sell the remainder at $34.00.

April 4th, 2009 - entry price on MDR @ 15.56, option @ 2.70
symbol: MDR-AD, 2010 $20 LEAP call - current bid/ask $5.30/5.50
-stop loss on MDR @ 17.25.

Chart of MDR:


MSFT $24.68 -0.01 -- Microsoft Corp.

The action in MSFT on Friday was disappointing. Large cap tech stocks rallied sharply following better than expected earnings from DELL and a positive revenue surprise from Intel. MSFT spiked to $25.50 but investors quickly sold into strength. The stock gave up its gains forming what appears to be a short-term top. I would expect a dip back toward the $24.00-23.00 zone. I'm not suggesting new positions at this time.

This is going to be a long-term (18-month) trade. MSFT doesn't move that fast (normally). Investors might want to turn this into a calendar or diagonal spread, selling calls against your LEAPS position. My long-term target is the $30 region.

June 2nd, 2009 - entry price on MSFT @ 21.60, option @ 2.20
symbol: VMF-AE, 2011 Jan. $25 call - current bid/ask $3.25/3.30
-stop loss on MSFT @ 19.95.

Chart of MSFT:


MT $36.74 -0.14 -- ArcelorMittal

MT is still consolidating sideways. Investors looking for a new entry point can watch the trendline of higher lows. Our long-term target is the $50 region.

June 17th, 2009 - entry price on MT @ 30.50, option @ 2.70
symbol: MT-AH, JAN 2010 $40 call - current bid/ask $3.20/3.50
-stop loss on MT @ 27.40.

-or-

June 17th, 2009 - entry price on MT @ 30.50, option @ 2.00
symbol: MT-AJ, JAN 2010 $50 call - current bid/ask .90/1.05
-stop loss on MT @ 27.40.

Chart of MT:


NYX $28.46 -0.06 -- NYSE Euronext

NYX continues to bounce following its trendline of higher lows. This is still an opportunity to launch positions but I would only enter small positions probably 1/2 to 1/4 your normal size and I suggest you raise your stop loss! An alternative entry would be to wait for a new rise over $30.00. Our long-term target is the $35.00-40.00 zone.

Apr. 11th, 2009 - entry price on NYX @ 21.51, option @ $1.81
-- NZV-AD, 2010 $30.00 LEAP call - current bid/ask $2.12/2.17
-stop loss on NYX at $19.95

Chart of NYX:


PBR $41.47 -0.68 -- Petroleo Brasiliero

PBR produced a failed rally and bearish reversal pattern last Monday. The stock has fallen every day since. Now shares are testing technical support at their 40 and 50-dma. I am not suggesting new long-term positions at this time. The plan is to sell half our position at $49.50 and the rest at $57.50.

Apr. 4th, 2009 - entry price on PBR @ 35.10, option @ $2.80
symbol: PMJ-AJ, 2010 $50.00 LEAP call - current bid/ask $1.35/1.45
-stop loss on PBR at $33.50

Chart of PBR:


PCU $29.46 +0.74 - Southern Copper Corp.

Copper prices have rallied to new highs for the year and this has helped fuel new highs on PCU. The stock hit our first target to take profits on Monday, August 24th at $29.75. The plan was to sell half our position. Our second and final target is $34.00. Our LEAP option traded over $6.00 on Monday. I'm not suggesting new positions at this time.

April 20th, 2009 - entry price on PCU @ 19.00, option @ 1.95
symbol: PCU-AE, JAN 2010 $25 LEAP call - current bid/ask $5.70/6.10
-stop loss on PCU @ 19.99.

Target Hit @ 29.75 on 08/24/09. Sold 1/2 at $6.00 (+207%)

Chart of PCU:


PEP $56.76 -1.00 -- PEPSICO Inc.

PEP was bouncing along just fine until the disappointing consumer confidence numbers. The stock lost 1.7% on Friday. If shares correct I would look for short-term support near the $55.00-54.00 zone. I'm not suggesting new LEAPS positions at this time but we can keep an eye out for a bounce near $54.00. Our long-term target is the $65-70 zone. We'll use a stop loss at $51.50. This is an 18-month bet.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $4.20/4.60
-stop loss on PEP at $51.50

Chart of PEP:


RAI $45.56 -0.26 -- Reynolds American Inc.

After hitting new highs for the year on Monday shares of RAI produced a bearish reversal last Tuesday. There hasn't been much follow through to the downside yet but the stock remains very overbought and due for a correction. I would look for a dip near the $43.00-42.00 area. I'm suggesting we take some money off the table at $49.50 (sell half) and exit completely at $57.50. More conservative traders may want to raise their stops closer to $40.00.

July 24th, 2009 - entry price on RAI @ 42.50, option @ $1.45(estimate)
symbol: RAI-BI, 2010 FEB $45.00 LEAP call - current bid/ask $2.70/2.90
-stop loss on RAI at $35.99

or

July 24th, 2009 - entry price on RAI @ 42.50, option @ $4.50(estimate)
symbol: OWO-AH, 2011 JAN $40.00 LEAP call - current bid/ask $6.50/7.30
-stop loss on RAI at $35.99

Chart of RAI:


RIG $77.56 +0.22 -- Transocean Ltd.

Shares traded in a $4.00 range but closed nearly unchanged for the week. The longer-term trend of higher lows (bullish) is now competing with the bearish trend of lower highs. I would use dips near the rising trendline as an entry point but readers may want to raise their stops (maybe $70 or $72.50 if you open new positions)! Currently our upside target is $98.00.

July 3rd, 2009 - entry price on RIG @ 70.50, option @ 5.40
symbol: RIG-AP, JAN 2010 $80 call - current bid/ask $6.30/6.50
-stop loss on RIG @ 64.99.

-or-

July 3rd, 2009 - entry price on RIG @ 70.50, option @ 3.90
symbol: RIG-AZ, JAN 2010 $85 call - current bid/ask $4.30/4.50
-stop loss on RIG @ 64.99.

Chart of RIG:


SGY $13.24 +0.14 -- Stone Energy Corp.

SGY has spent another week fighting with technical resistance at its exponential 200-dma. More conservative traders may want to exit completely right now to lock in a gain. I am not suggesting new long-term bullish positions at this time. We have already sold half at $11.77. Our second and final target is $14.75. FYI: I'm raising the stop loss again, this time to $8.75. More conservative traders may want to place their stop closer to $10.00.

June 22nd, 2009 - entry price on SGY @ 6.35, option @ 0.75
symbol: STQ-AB, 2010 JAN $10 LEAP call - current bid/ask $4.10/4.60
-stop loss on SGY @ 8.75

FYI: sell half LEAPS position at $3.20 (+326%)

-or-

June 22nd, 2009 - entry price on SGY @ 6.35, (buying the stock)
-stop loss on SGY @ 8.75

FYI: sell half stock position at $11.77 (+85.3%)

Chart of SGY:


SLB $57.36 +0.46 -- Schlumberger Ltd.

The bullish breakout two weeks ago continues. Traders are buying the dip right where you'd expect it near $55.00 and its cloud of moving averages. If you're looking for a new bullish position dips near $55.00 would work but I would probably raise your stop toward the $50.00 level.

Currently our exit strategy has three parts. The plan was to sell one third of our position at $59.00, which was originally our first target. We'll sell another one third at $69.00. We'll exit our final third at $77.50.

April 20th, 2009 - entry price on SLB @ 45.01, option @ 3.00
symbol: SLB-AL, JAN 2010 $60 LEAP call - current bid/ask $4.50/4.70
-stop loss on SLB @ 44.90.

1st exit @ $59.00 (1/3 of position) option @ $7.25 (+141% estimate)

Chart of SLB:


UYG $5.77 +0.03 - ProShares Ultra Financials (2x) ETF

The financials continue to set new highs but the trading action over the last few weeks is starting to build a potentially bearish pattern. I am not suggesting new positions at this time.

Editor's Note: The idea is to hold this ETF as a long-term investment but experienced investors may want to trade it by taking profits now and re-entering on a pull back.

Don't forget that the UYG trades off the DJUSFN index.

The plan is to hold the UYG for 18 to 24 months or longer. We'll evaluate potential exit points along the way. It's true that as a leveraged ETF there will be slippage in the daily performance between UYG and the underlying index.

Our strategy called for buying the ETF instead of the options.

Current position in the UYG = $1.50 entry (stop loss: 2.85)

Chart of UYG:


VOD $21.79 -0.17 -- Vodafone Group

VOD, much like the English FTSE index, has rallied to ten-month highs. Yet momentum is clearly stalling. Shares are a little overdone and due for a correction. Investors can open new positions on a dip near $20.00, which should be new support. Our target is the $27.50 region.

July 10th, 2009 - entry price on VOD @ 18.25, option @ 1.10
symbol: VOD-AD, 2010 JAN $20 LEAP call - current bid/ask $2.55/2.65
-stop loss on VOD @ 17.85

Chart of VOD:


WFR $16.55 +0.50 -- MEMC Electronic Materials Inc.

WFR has rallied back from the abyss. The stock looked like it was going to breakdown under its longer-term trendline of higher lows. The Thursday-Friday bounce has saved it - for now. I am inching our stop loss up to $14.95. I would be tempted to buy LEAPS again if WFR can clear the small cloud of moving averages. That would take a rally above the $18.00 level. Our long-term target is the $30.00 region.

June 23rd, 2009 - entry price on WFR @ 17.50, option @ 2.50
symbol: CJC-AD, 2010 JAN $20 LEAP call - current bid/ask $1.05/1.15
-stop loss on WFR @ 14.95

-or-

June 23rd, 2009 - entry price on WFR @ 17.50, option @ 3.43
symbol: ZET-AE, 2011 JAN $25 LEAP call - current bid/ask $1.70/1.85
-stop loss on WFR @ 14.95

Chart of WFR:


CLOSED Plays

UNG $11.13 -0.38 - U.S. Natural Gas ETF

Natural gas futures continue to slide and some traders are betting on a move to $2.00 or lower for the spot price (it's already near $3.00). While the weakness in the commodity is to blame for UNG's miserable performance would you believe this ETF is actually worth 10% more than its NAV? The CFTC is reviewing all of the commodity ETFs as they decide whether or not to issue position limits for these trading vehicles. Hypothetically if the CFTC decides that any one ETF can only hold 10% of the outstanding futures positions and the UNG holds 20% then we have a problem. UNG would have to unload half its position. The UNG has already stopped issuing new shares making it more like a closed-end fund. Given the scarcity of shares UNG is trading above what is should technically be worth. While this is good news the trend is down and the CFTC decision is still a potential landmine.

I am suggesting we cut our losses now and wait for the CFTC to reach a decision before re-evaluating any potential bullish trades here.

June 16th, 2009 - entry price on UNG @ 16.26, option @ 3.90
symbol: ZZM-AT, JAN 2011 $20 LEAP call - current bid/ask $1.20/1.30
-stop loss on UNG @ no stop

Early Exit 08/29/09 with the UNG @ 11.13 and the option @ 1.20 (bid)

Chart of UNG: