Option Investor
Newsletter

Daily Newsletter, Wednesday, 7/1/2009

Table of Contents

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

Market Wrap

With Manufacturing Stabilizing, it Was Not a Bad Day

by Judy Alster

Click here to email Judy Alster
The day and the third quarter opened on a positive note, no doubt spurred by the news that the S&P had posted its biggest quarterly gain in a decade. Some of the bounce could have been a reaction to Tuesday's selloff after the disturbing Consumer Confidence survey, but let's try to be optimistic. Giving an assist today was the fourth straight monthly rise in pending home sales. Also helping, despite one disappointing component, was the monthly report from the Institute for Supply Management, which showed some stabilization in manufacturing activity.

Today's Market Statistics:

The ISM's manufacturing index rose to 42.8 in May, much as expected, to its highest level since September 2008 and up more than two points over April's 40.1, although still in just-negative territory. A reading of 50 or higher means growth in the manufacturing sector, a level above 43 or so but below 50 tells us the U.S. economy is still growing even though the manufacturing sector is contracting and below 43, your economy is in recession

The index was expected to climb by roughly two points a month until it hit 50 sometime in the third quarter. But the index's new order level may cause revision to that view, given its nearly two-point decline to 49.2, a sub-50 reading indicating that more survey respondents reported a month-to-month decline than a gain. (The report gathers information on manufacturing production, new orders, supplier deliveries, inventories and employment.)

The big plus was production, up 6-1/2 points to 52.5 and the biggest factor in the index's improvement. At the same time customer inventories were down 2-1/2 points to 43.5, another bright spot. Another important factor was a big jump to a solid 50 reading for prices paid, which should help cool concern over deflation. Markets paid no lasting attention to the report, probably focusing on the weakness in new orders.

ISM Manufacturing Index:

In other reports, the best that can be said for pending home sales, a leading indicator of sales of existing homes, is that the monthly gain was nothing much but that year-over year it showed a nice gain of 3.2%. So no big improvement, but no big drop either.

Bleaker were the week's mortgage applications. That index fell a surprising 4.5% in the week ending June 26, to 267.7. The refinancing index is back at an 18-month low of 1,482.2, down 30% on the week, despite a slight decline in mortgage rates. The residential and commercial building sector, though, seems to have been holding its own for the last two months and is well off March lows:

In keeping with that, construction outlays in May slid into negative mode after April's big boost, slipping 0.9%, worse than the market expected, after rising 0.6% in April. The reversal in outlays in May was led by a 3.4 percent drop in residential outlays, while nonresidential outlays gained 0.5%. Still, residential and commercial building stocks are decidedly off their lows, as this chart of the sector shows:

Residential and Commercial Building:

Overall, construction is still is in the doldrums as homebuilders wait for unsold supply to dwindle and commercial builders remain stymied by lower corporate profits. More promising and maybe a little surprising is the building products sector, which has left its troughs behind and gone straight up for the last week or so. We'll have to wait for the next housing reports to see what, if anything, this recent spike signifies:

Building Products:

Crude oil supplies fell 3.7 million barrels in the June 26 week to 350.2 million, according to the Energy Information Agency's latest report. Petroleum products, however, saw a big jump in weekly inventory data with gasoline up 2.3 million barrels and distillates up 2.9 million: firm output, only fair demand. Demand for gasoline is up only 0.9% year-over-year while demand for jet fuel is down 9.4%. Could it be that Americans are actually using less gasoline and liking it? Could this last? Oil fell 75 cents to $71 in immediate reaction to the results, and closed lower at day's end.

Crude Oil Inventories:

Giving us a sneak preview of tomorrow's much-awaited jobless claims and employment situation reports, the ADP national employment report today called for private payrolls to shrink by 473,000 in June, after an estimate of 485,000 in May. Again, not great, but improving.

ADP Payroll Expectations:

Even the beat-up and bloodied auto sector showed signs of life last month compared to June 2008 after a year of sickening slides. Declines slowed last month for four of the six major carmakers, with Ford reporting the smallest monthly drop in a year, 10.7%. (The bad news was that every major automaker except Honda reported lower sales than in May.) Even Chrysler, which emerged from bankruptcy protection last month, saw its year-over-year sales decline shrink, leading to the surmise that the industry slump that began with $4 per gallon gasoline last summer could be leveling off.

Ford is the sole U.S. automaker to avoid bankruptcy protection and the only one not receiving government loans to keep from running out of money. Anticipating increased traffic at dealers and higher sales later this year, Ford announced earlier this week that it would boost its third-quarter production by 25,000 vehicles: a bold move. The market sold on the news but the rumor, so to speak, has bumped Ford's stock price up over 240% since early March:

Ford Motor Co.:

And in end-of-an-era news, GM plans to sell or close Pontiac, Saturn, Hummer and Saab to focus on Chevrolet, Cadillac, GMC and Buick, its four core brands.

All in all, the economic news, while nothing to jump up and down about, does suggest that the recession probably won't get much worse and may even be sliding to a halt, although it was still tentative enough to put the kibosh on the market's morning rally. Four of today's most important reports came out at 10 a.m. and the major indexes took an almost immediate tumble, as this mid-afternoon illustration of the Dow shows us. The intraday charts of the S&P500 and the Nasdaq looked similar:

Dow Jones Intraday:

The Dow traded as high as 8580.47, up over 130 points from Tuesday's close, but thought better of it and settled at 8504.06, barely scraping above its 200-day moving average and still hiding below its 20-day average. The trend seems to be flattening.

Dow Jones Industrial Average:

Ditto the S&P500, who also managed just a fractional gain after a big start today and whose trend looks similar:

S&P500:

The Nasdaq composite eked out a gain, while still managing to keep its distinct uptrend:

The Nasdaq Composite:

For a little more reassurance, I found a chart of the NYSE Advance-Decline line. As every child of six knows, never rely a single technical indicator, and the advance-decline certainly needs other technicals to back it up. Still, this weekly chart of the last year's advance-decline shows a marked uptrend for almost three months, with higher highs and higher lows, until just recently. Are we out of the woods?

NYSE Advance-Decline Line(Weekly):

Oil was in the news today, as big pension funds that model their portfolios on popular indexes have vastly increased their purchases of crude in recent months, more than 30% since the end of last year. This has probably contributed to the doubling in oil prices this year, making our ever-reactive policy makers wonder whether some investments in commodities should be watched, if not actively curbed. Last week a Senate investigations panel released a 247-page report saying index traders have made large purchases on the Chicago wheat-futures market and have pushed up futures prices over the past few years. Really?

This week a bill was introduced that would authorize the prohibition of "excessive speculation." We'll see where it goes. The move to rein in financial investment in commodities became frantic last year as energy and food costs spiked. Naturally, as prices fell in the second half, the momentum faded fast. This kind of behavior could be why alternative energy probably won't be the holy grail so many people thought it would be, at least not in our lifetimes: Whenever oil prices get out of hand, they're likely to plummet just as quickly, taking with them any sense of urgency about energy supplies.

Even so, oil prices fell despite the decline in crude supply, on doubts about whether people and businesses will be using much more energy any time soon. Benchmark crude for August delivery fell 58 cents to settle at $69.31 a barrel with one trading day, probably a short one, left in the week.

Crude Oil:

In specific stocks, auto parts supplier Lear Corp. (LEA) tumbled after the company said it planned to restructure its U.S. operations in bankruptcy court. Genetic-instrumentation maker Illumina (ILMN) had a breathtaking skid of $7.56 or almost 20%. A decline in its genetic testing equipment business lowered its quarterly estimate to $161 million, down from its previous forecast of $168 million to $173 million. The punishment seemed awfully excessive for the crime, but we should be used to that on Wall Street.

Lear Corp.:

Announcing earnings today, wine and spirits giant Constellation Brands (STZ) gapped up and stayed up despite a big earnings skid, from 20 cents a share in last year's quarter to three cents this year; it still beat expectations even though the strong dollar took about 15% off sales. Constellation, the world's biggest wine company by volume, said it's actually benefiting as consumers switch from higher-priced beverages to bargains in every price range (my wine snob friends will faint when they read this). Shares jumped 93 cents, or 7.3%, to close at $13.61.

Constellation Brands:

Also gapping up and really on a tear is General Mills (GIS), up $2.23 or almost 4% on higher than expected earnings in the fourth quarter, on top of which it boosted its 2010 earnings estimates. Food stocks rarely let you down for very long.

General Mills Corp.:

Another winner was specialty vehicle maker Oshkosh Corp. (OSK), who gained 26%. The military said this company was the "clear winner" in a multibillion-dollar competition to build new blast resistant, off-road vehicles for ground forces in Afghanistan.

Oshkosh Corp.:

In more bad earnings news, Myriad Genetics (MYGN), who makes diagnostic and therapeutic products, missed on earnings and forecast worse than expected full year revenue. As people lose their jobs they lose their insurance, and that hurts many such equipment makers. The stock lost a stunning $9.35 or 26%.

Myriad Genetics:

Tomorrow's a big day, with reports on jobless claims, the employment situation, the European Central Bank's monetary policy and the EIA's natural gas report, as well as a number of Treasury auctions.

Tomorrow's earnings reports include Methode Electronics, MSCI, Inc., Acuity Brands and MSC Industrial Direct, among others.

And finally, last week's Federal Reserve meeting obviouly had a mild effect on the market. But it's important to keep in mind that owing to a combination of several resignations and upcoming re-appointments, a few expired terms, the ordinary appointments and the fact that Mercury is in retrograde, as a reader kindly pointed out, Barack Obama has an extraordinary, some might say alarming, chance to reshape the FOMC.

Late last year the Washington Post said, "In January 2010, Obama can either reappoint or replace Chairman Ben S. Bernanke when his term expires and make the same decision about Vice Chairman Donald L. Kohn when his term ends in June of that year. Fed governors serve a 14-year term, though in practice most leave after a few years. Thus within 18 months of taking office, Obama is likely to have appointed five of the seven Fed governors."

The central bank is supposed to be independent from politics (uh huh), so a president's best chance of influencing how the Fed will regulate banks or respond to economic changes is through these appointments. With Republicans in Congress grilling Bernanke over his possible role in strong-arming Bank of America into buying Merrill Lynch, it would seem that he's ripe for replacing. On the other hand, it might be hard for the President to find another Fed chairman so exquisitely attuned to his wishes. Ladies and gentlemen, place your bets.

Because Friday is a market holiday there will be no newsletter on Thursday night. The activity for Thursday and Friday will be covered in the weekend newsletter.

Judy Alster


New Plays

Looking for a dip on the jobs number

by James Brown

Click here to email James Brown


NEW BULLISH Plays

Energizer Holdings - ENR - close: 54.10 change: +1.86 stop: 49.90

Why We Like It:
ENR, the maker of Energizer batteries and other consumables, is starting to breakout higher after weeks of consolidating sideways. Today's move is a bullish breakout over both its 50-dma and its 200-dma. However, I suspect the jobs number will disappoint the market tomorrow and stocks could dip before resuming their up trend. I'm suggesting readers buy a dip in ENR at $52.75. More conservative traders could look for a dip back toward $51.00 and technical support at the 100-dma. I'm placing our stop loss at $49.90. Our first target is $55.75. The Point & Figure chart is bullish with a $64 target. We'll set our second target at $59.95.

Annotated chart:

Entry on      June xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          07/28/09 (unconfirmed)    
Average Daily Volume:       781 thousand
Listed on  July 01, 2009    


3x Energy Bear ETF - ERY - close: 22.18 change: -0.005 stop: 19.95

Why We Like It:
The action in crude oil over the last few days has been growing more bearish. If the commodity breaks down it will weigh on the oil stocks. We're going to try and play the ERY triple-leveraged inverse ETF again. Nimble traders could try buying a bounce near $20.00. I'm setting our trigger to buy the ERY at $23.30. This is a very volatile ETF so we're using a wide stop loss and I'm suggesting readers only trade half (or less) their normal position size. If triggered at $23.30 our first target is $27.40. Our second target is $29.90. My time frame is four to six weeks or less.

FYI: A more direct play on a breakdown in oil, outside of futures, would be bearish trades on the USO or DXO.

Annotated chart:

Entry on      June xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          00/00/00 
Average Daily Volume:       4.0 million 
Listed on  July 01, 2009    



In Play Updates and Reviews

Looking Toward the Weekend

by James Brown

Click here to email James Brown


BULLISH Play Updates

Andersons Inc. - ANDE - close: 31.34 change: +1.40 stop: 27.59

ANDE is finally showing some strength with investors buying the dip near $29.50 this morning. The stock closed with a 4.6% gain. Our first target is $34.00. My time frame is less than four weeks.

Entry on      June 25 at $29.95 
Change since picked:     + 1.39   			
Earnings Date          08/06/09 (unconfirmed)    
Average Daily Volume:       379 thousand
Listed on  June 25, 2009    


A.O.Smith Corp. - AOS - close: 34.04 change: +1.47 stop: 30.85 *new*

AOS also displayed some very impressive strength with a 4.5% gain. The stock hit new multi-month highs at $34.60. Our first target to take profits is at $34.95 but I am suggesting readers strongly consider taking some money off the table tomorrow with AOS near $34.00. Currently the stock is up 12.5% from our entry point. We're raising our stop loss to $30.85. Broken resistance near $32.00 should be new support. Our second target is $37.00.

Entry on      June 23 at $30.25 *triggered       
Change since picked:     + 3.79   			
Earnings Date          07/16/09 (unconfirmed)    
Average Daily Volume:       195 thousand
Listed on  June 20, 2009    


Bank of America - BAC - close: 13.05 change: -0.15 stop: 11.85

Banking stocks under performed and we're not the least bit surprised to see BAC pull back after trading to its 200-dma. Watch for a dip near $12.50 as our next entry point.

Our first target is $14.50, which is where we want to sell 50% to 75% of our position. Our second target is $16.45. Bear in mind that we probably want to exit ahead of the late July earnings report so those target look optimistic.

Entry on      June 04 at $12.24 /gap higher entry
                              /listed at $11.87
Change since picked:     + 0.81   			
Earnings Date          07/20/09 (unconfirmed)    
Average Daily Volume:       537 million 
Listed on   May 19, 2009    


Bank of Montreal - BMO - close: 43.03 change: +0.88 stop: 39.90 *new*

The bounce today is very encouraging. Lack of follow through on yesterday's bearish reversal candlestick is good news for the bulls. Yet the action today is an "inside day", which suggests indecision. I'm not suggesting new positions at this time. Please note our new stop at $39.90. Our first target to take profits is $44.90. Our second target is $48.00. This could take six to eight weeks.

Entry on      June 25 at $41.38 
Change since picked:     + 1.65   			
Earnings Date          08/25/09 (unconfirmed)    
Average Daily Volume:       729 thousand
Listed on  June 25, 2009    


Bally Tech. - BYI - close: 30.67 change: +0.72 stop: 27.45

BYI erased yesterday's losses and rallied to new multi-month highs. I'm suggesting new positions here. Our first target is $32.90. Our second target is $34.90. My time frame is six to eight weeks.

Entry on      June 26 at $30.10 *triggered       
Change since picked:     + 0.57   			
Earnings Date          08/19/09 (unconfirmed)    
Average Daily Volume:       859 thousand
Listed on  June 24, 2009    


Dell Inc. - DELL - close: 13.39 change: -0.34 stop: 12.45

The rally in DELL is starting to look a little tired and shares are pulling back. Look for support near $13.00 or its exponential 200-dma around $12.80. Our first target is $14.90. We have a second target at $15.95 but we want to take most of our money off the table at $14.90. My time frame is about eight weeks. FYI: The Point & Figure chart is bullish with a $20 target but it's also showing potential resistance near $14.50. More conservative traders may want to start taking profits near $14.50.

Entry on      June 09 at $12.55 
Change since picked:     + 0.84   			
Earnings Date          08/27/09 (unconfirmed)    
Average Daily Volume:        29 million 
Listed on  June 06, 2009    


Joy Global - JOYG - close: 36.25 change: +0.53 stop: 28.70

JOYG is still struggling with resistance near $38.00. We might want to change strategies and instead of waiting for a dip near $31.00 readers might want to buy a breakout over $38.00 (with a much higher stop loss). For now the plan is to buy JOYG at $31.00. That may be wishful thinking.

Entry on      June xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          09/03/09 (unconfirmed)    
Average Daily Volume:       5.3 million 
Listed on  June 23, 2009    


Legg Mason - LM - close: 24.59 change: +0.21 stop: 23.49

LM continues to churn sideways in a narrow range. Our plan is to buy LM at $25.75. If we are triggered at $25.75 our target is $29.75. Currently the Point & Figure chart is bullish with a $39.50 target. We do not want to hold over the late July earnings report.

Entry on      June xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       5.2 million 
Listed on  June 27, 2009    


MEDNAX Inc. - MD - close: 43.39 change: +1.26 stop: 39.85

We did not have to wait very long for MD to hit our trigger. The stock rallied past its mid June high and hit our trigger at $43.01. Volume was pretty decent considering the holiday week. The MACD has produced a new buy signal on the daily chart. Our first target is $47.40.

chart:

Entry on      July 01 at $43.01 *triggered       
Change since picked:     + 0.38   			
Earnings Date          08/03/09 (unconfirmed)    
Average Daily Volume:       367 thousand
Listed on  June 30, 2009    


Morgan Stanley - MS - close: 28.36 change: -0.15 stop: 26.95

Financials were under performers on Wednesday and MS gave up 0.5%. If we see another bounce from the 50-dma I would buy it. Our first target is $31.75. FYI: The Point & Figure chart is bullish with a $46 target.

Entry on      June 26 at $28.60 *triggered       
Change since picked:     - 0.24   			
Earnings Date          07/22/09 (unconfirmed)    
Average Daily Volume:      29.4 million 
Listed on  June 23, 2009    


Pharma Prod. Dev. - PPDI - close: 22.75 chg: -0.47 stop: 21.95

The action in PPDI today is disappointing. The stock's 2% decline casts an ominous shadow. Instead of breaking out over resistance near $23.50 the stock now looks like it could fail. I would hesitate to buy this dip.

More conservative traders may want to consider a stop closer to $22.25. Our first target is $25.90 (or its 200-dma). FYI: The Point & Figure chart is bullish with a $31.00 target.

Entry on      June 18 at $23.38 /gap higher entry
                              /originally listed at $23.05
Change since picked:     - 0.63   			
Earnings Date          07/21/09 (unconfirmed)    
Average Daily Volume:       1.5 million 
Listed on  June 18, 2009    


Vodafone Group - VOD - close: 19.69 change: +0.20 stop: 18.85

European markets were pretty strong with most of the major indices up 2% or more. VOD only managed a 1% gain as it rolled over this afternoon. Look for a dip in the $19.50-19.30 zone as a new entry point.

I consider this an aggressive buy under $20.00. More conservative traders may want to wait for the breakout (consider $20.25 as an alternative entry point but you may want to adjust your stop and targets). Our first target is $20.75. Our second target is $21.85. The P&F chart is bullish with a $23 target.

Entry on      June 29 at $19.52 
Change since picked:     + 0.17   			
Earnings Date          11/10/09 (unconfirmed)    
Average Daily Volume:       4.2 million 
Listed on  June 29, 2009    


Western Digital - WDC - close: 26.80 chg: +0.30 stop: 23.95

WDC hit new multi-month highs this morning but the stock failed to hold most of its gains. Look for another dip near $26.00 before opening new positions. More conservative traders may want to raise their stops toward $25.00. Our first target is $29.75.

Entry on      June 25 at $26.10 *triggered       
Change since picked:     + 0.70   			
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       4.6 million 
Listed on  June 24, 2009    


Wellpoint Inc. - WLP - close: 51.25 change: +0.36 stop: 47.85

WLP delivered a temporary breakout over resistance at $52.00 early this afternoon. Shares failed to hold the breakout but it was a decent effort on above average volume. I would still consider opening new bullish positions near the $50.00-49.50 zone. Our first target is $54.00. Our second target is $57.40.

Entry on      June 22 at $49.25 *triggered       
Change since picked:     + 2.00   			
Earnings Date          07/29/09 (unconfirmed)    
Average Daily Volume:       4.4 million 
Listed on  June 20, 2009    


U.S. Steel - X - close: 34.79 change: -0.95 stop: 33.35

Our aggressive bet on X is really not shaping up very well. Today's relative weakness (-2.6%) and close under $35.00 and its 30-dma and 200-dma is a bearish development. Any conservative traders in this trade will want to strongly consider an early exit now. I'm not suggesting new positions at this time.

We're using a relatively wide stop loss due to the stocks recent volatility. Because this is an aggressive, higher-risk trade I would only trade half or less than your normal position size. Our first target is $39.95. Our second target is $42.50.

Entry on      June 27 at $37.39 /gap higher entry
                              /originally listed at $36.91
Change since picked:     - 2.60   			
Earnings Date          07/28/09 (unconfirmed)    
Average Daily Volume:      17.8 million 
Listed on  June 27, 2009    


Dentsply Intl. - XRAY - close: 30.48 change: -0.09 stop: 28.95

Nothing has changed for us with XRAY. The stock is still consolidating sideways. Investors are still buying dips in the $30.50-30.00 zone. Our first target to take profits is $33.90. The Point & Figure chart is very bullish with a $47 target.

Entry on      June 25 at $30.87 
Change since picked:     - 0.39   			
Earnings Date          07/29/09 (unconfirmed)    
Average Daily Volume:       1.0 million 
Listed on  June 25, 2009    


BEARISH Play Updates

DuPont - DD - close: 25.80 change: +0.18 stop: 27.05

DD produced another short-term failed rally near $26.20 today. This could be our entry point for new short positions. Our first target $22.25. Our second target is $20.25.

Entry on      June 16 at $25.20 
Change since picked:     + 0.60   			
Earnings Date          07/21/09 (unconfirmed)    
Average Daily Volume:       9.1 million 
Listed on  June 16, 2009    


iShares Mexico - EWW - close: 37.19 change: +0.33 stop: 38.05

Shares of EWW rallied higher this morning following strength in the U.S. market. The rally faded and I am still tempted to open new short positions here. Our target is $30.25.

Entry on      June 22 at $34.92 
Change since picked:     + 2.27   			
Earnings Date          00/00/00 
Average Daily Volume:       3.9 million 
Listed on  June 22, 2009    


Gamestop - GME - close: 22.46 change: +0.45 stop: 25.05

Nothing has changed for GME. The stock has spent more than a week consolidating sideways. The path of least resistance is down so I'm expecting the next move to be lower. More conservative traders might want to consider a stop loss near $24.50ish. The stock has already hit our first target at $22.05. Our second target to take profits is $20.25. Our third target is $18.15.

Entry on      June 02 at $24.32 
Change since picked:     - 1.86
                              /1st target hit @ 22.05 (-9.3%)
Earnings Date          08/20/09 (unconfirmed)    
Average Daily Volume:       6.3 million 
Listed on  June 02, 2009    


Gen-Probe - GPRO - close: 42.92 change: -0.09 stop: 44.05

GPRO is still consolidating under resistance near $44.00. I would consider new positions here. Our first target is $38.05. Our second target is $35.25.

Entry on      June 23 at $42.03 /gap higher entry
                             /originally listed at $41.64
Change since picked:     + 0.89   			
Earnings Date          07/30/09 (unconfirmed)    
Average Daily Volume:       449 thousand
Listed on  June 23, 2009    


iShares Materials - MXI - close: 47.09 change: +0.56 stop: 48.25

This industry got a bounce this morning but it quickly faded and the MXI closed with a 1.2% gain. This almost looks like a failed rally under the 20 and 30-dma. MXI has already hit our first target at $44.00. Our second target is $41.00.

Entry on      June 16 at $47.55 
Change since picked:     - 0.46
                              /1st target hit 44.00 (-7.4%)
Earnings Date          00/00/00 
Average Daily Volume:       170 thousand
Listed on  June 16, 2009    


Raytheon - RTN - close: 44.89 change: +0.46 stop: 46.55

RTN erased about half of yesterday's losses. Use the bounce as a new entry point for bearish positions. Our first target is $40.25. The P&F chart is very bearish with a $13 target.

Entry on      June 24 at $44.22 
Change since picked:     + 0.67   			
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       3.5 million 
Listed on  June 24, 2009    


Homebuilders ETF - XHB - close: 11.77 change: +0.02 stop: 12.55

Volume was very light and the early morning bounce in the XHB faded lower throughout the rest of the session. This can be used as a new entry point for bearish positions. More conservative traders may want to lower their stops.

Our target is $10.10. I am tempted to set a longer-term target in the $9.00-8.00 region.

Entry on       May 23 at $11.96 
Change since picked:     - 0.19   			
Earnings Date          00/00/00
Average Daily Volume:        10 million 
Listed on   May 23, 2009