NEW BULLISH Plays

iPath VIX ETN - VXX - close: 34.07 change: +0.89 stop: 31.99

Why We Like It:
The VXX is an exchange traded note (ETN) that tries to duplicate the performance of the Volatility index (VIX) through exposure to short-term vix futures.

Our market outlook for January is relatively bearish. Odds are good that stocks could see a correction. Any significant decline is going to drive up demand for put options and that's going to send the VIX higher. The VXX has already started to form a new trading bottom last week. I'm suggesting small bullish positions now. This is naturally a volatile security so we need to give it a wide stop so it has room to maneuver. Our first target to take profits is at $39.50.

Annotated chart:

Entry on   January 02 at $34.07 (small positions)
Change since picked:     + 0.00   			
Earnings Date          --/--/-- 
Average Daily Volume:       1.6 million 
Listed on   January 02, 2009    


NEW BEARISH Plays

Best Buy - BBY - close: 39.46 change: -0.88 stop: 41.26

Why We Like It:
It looks like investors have turned sour on BBY. The stock reversed hard in December and the oversold bounce is failing under its old trendline of support. Shares broke down under their 100-dma on Thursday. I want to see a little more confirmation. Use a trigger at $38.95 to open small bearish positions. I suggest small positions because the 200-dma just above $38 could offer some technical support. An alternative entry point would be a new failed rally near $41-42. We will consider adding to positions on a breakdown under $38.00.

Our first target is $35.25.

Annotated chart:

Entry on   January xx at $xx.xx <-- TRIGGER @ 38.95
Change since picked:     + 0.00   			
Earnings Date          03/25/10 (unconfirmed)    
Average Daily Volume:       8.0 million 
Listed on   January 02, 2009    


Jacobs Engineering - JEC - close: 37.61 change: -0.31 stop: 39.26

Why We Like It:
The November breakdown in JEC was a major blow to the stock's bullish trend of higher lows. Now the oversold bounce is beginning to roll over into what should be a new leg down. I'm suggesting bearish positions now. We'll use a stop just above the recent highs. More aggressive traders could give JEC more room with a stop above $40.00.

Our first target is $34.05. Our second target is $30.25. I'm tempted to hold over the company's earnings report in late January.

Annotated chart:

Entry on   January 02 at $37.61 
Change since picked:     + 0.00   			
Earnings Date          01/26/10 (unconfirmed)    
Average Daily Volume:       2.2 million 
Listed on   January 02, 2009