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Newsletter

Daily Newsletter, Tuesday, 4/23/2013

Table of Contents

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

Market Wrap

Twitter Jitters

by Jim Brown

Click here to email Jim Brown

The Dow declined -150 points in two minutes after an AP tweet claimed explosions at the White House and president Obama was injured.

Market Statistics

Fortunately the tweet was bogus and there was no explosion and no injuries. The markets recovered just as quickly as they crashed, although trading over the next hour was very subdued. The front month treasury futures contract traded 180,000 contracts over the three minute period while the tweet was posted. AP claimed the Twitter account was hacked and the account was shutdown.

Dow Chart - Intraday

The market started off with a bang this morning but you will not believe the reason. The Markit PMI for France rebounded from 44.0 to 44.4 in March. I know you are probably shocked by the big gain considering anything under 50.0 is still contraction territory. The Markit Services PMI for France rose from 41.3 to 44.1. That was significantly better but still well into contraction territory. Germany's manufacturing PMI came in at 47.9 and services PMI at 49.2. The Eurozone Composite Output Index was unchanged at 46.5 for April, also well into contraction territory. Markit said "The survey is signaling a worrying weakness in the economy at the start of the second quarter, with signs that the downturn is more likely to intensify in the coming months rather than improve." So where is the good news that lifted the U.S. markets?

I am sure you know the answer to that question. The economic news was so bad that investors were sure the ECB would cut rates at the next meeting and possibly launch its own version of QE. European Commission president Jose Manuel Barroso was quoted as saying austerity "has reached its limits." Yes, the bad news was the good news in this crazy world where fundamentals don't matter. The world equity markets depend on central banks rather than fundamentals.

Even more surprising was that bad news in China failed to dent our markets. China's Shanghai Composite fell -2.6% after the April HSBC Manufacturing PMI fell from 51.6 to 50.5 and very close to contraction territory. Estimates had been for a minor decline to 51.4. The export index declined to 48.6 and exports are a major portion of China's economy. Exports are in contraction and that suggests manufacturing will follow.

The market was also excited that Spain sold 3.1 billion euros in 10-year debt. The yield dropped -22 basis points to 4.27% and the lowest level since November 2010. Italy's 10-year yield dropped -14 bp to 3.94% and the lowest level since November 2010.

OK, so the eurozone is slipping deeper into recession and China is right behind them. European investors are so worried about the economy they have resorted to buying debt from Spain and Italy even though they are in the worst shape of any major EU economy. The U.S. futures rally overnight on the news. What is wrong with this picture?

Positive economics in the U.S. only added to the bullish premarket hysteria. The FHFA Purchase Only Home Price Index rose +7.1% for the February period. That compares to the 6.5% in January and estimates for +5.0%. The weekly Chain Store sales snapshot rose from -1.1% in the prior week to +0.8% last week. This report is mostly noise since storms and local issues can cause volatility but the bulls were looking for any positive news.

The New Home Sales for March came in at 417,000 compared to 411,000 in February. Inventories rose slightly but there is still only 4.4 months of supply in the market and that is right at a historical low. Sales were up +19% from the same period in 2012.

Mass Layoffs declined in March to 1,337 events impacting 127,939 workers. This was down from 1,422 events in February and 135,468 workers. This put the layoffs back into the range before the November spike to 1,749 events and 172,879 workers. Manufacturing accounted for 23.3% of the mass layoff events and 28.7% of initial jobless claims.

Unfortunately not all the economic news was positive. The Richmond Fed Manufacturing Survey for April fell to -6.0 from +3.0 in March. The new orders component fell further into contraction declining from -4.0 to -8.0. Backorders plunged from -14.0 to -21.0. Employment declined from +9.0 to +3.0. Every material component declined.

Richmond Fed Chart

The economic calendar for Wednesday is void of any material reports. Thursday has the Kansas Fed Survey and Friday the all important GDP.

Economic Calendar

Apple reported earnings after the bell and they beat on both earnings and revenue. Earnings declined -18% to $10.09 compared to estimates of $9.98. Revenue was $43.6 billion compared to estimates of $42.3 billion. Gross margin at 37.5% missed estimates of 38.5%. Iphones sold 37.4 million compared to estimates of 36.5 million. Ipads sold 19.5 million compared to estimates for 18.3 million.

While all those details sound bullish Apple warned for the current quarter. Apple said revenue would be $33.5-35.5 billion compared to estimates of $38.6 billion. Analyst earnings estimates for Q2 are $8.97 and Apple did not give an EPS estimate. Gross margins would fall further to an average of 36.5% compared to estimates of 38.6%.

Apple said it would return $100 billion to shareholders by the end of 2015. Spending $100 billion is a lot but the end of 2015 is 32 months away. That is a long time in stock years. In the next ten quarters anything can happen and there are many possibilities that could change that plan. Apple also said it would raise capital in the debt markets to fund the buybacks.

Apple authorized a $60 billion share buyback plan and raised its quarterly dividend to $3.06 per share. Apple currently has $145 billion in cash with $102 billion of that offshore. Cook implied there were no new products until this fall but there would be some really great stuff in 2014. That is a long time to wait when Samsung is slamming out new products every 90 days. Cook also acknowledged growth was slowing and margins were declining. Iphone inventories at quarter end rose more than one million units to 11.6 million. Is that evidence of slowing sales or stocking up before changing assembly lines for the new products?

Apple shares were halted for trading at $406 just before the earnings release. When trading reopened the shares spiked to $430 but immediately began to sink to hit $402.50 in late trading before closing the afterhours session at $405. This could have a negative impact on the broader markets on Wednesday.

Apple Chart

Panera Bread (PNRA) reported earnings of $1.59 and well below estimates at $1.65. Revenue rose +12.7% to $561.8 million, which also missed estimates of $566.1 million. Same store sales rose +3.3% and missed estimates for 4.2%. Panera shares declined -$11 after the earnings miss.

Panera Chart

Amgen (AMGN) reported earnings of $1.96 that beat estimates of $1.84. Revenue rose +5% to $4.24 billion and missed estimates of $4.37 billion. Drug sales rose +6% thanks to Enbrel and Prolia. Amgen saw sales decline in anemia drugs Aranesp and Epogen because of reluctance by insurers to pay due to safety concerns. The company guided for full year earnings of $7.05 to $7.35 and a penny less than analyst estimates at $7.21. Full year revenue was forecast at $17.8-$18.2 billion, which was in line with analyst estimates. Shares of AMGN declined -$7 after the report.

Amgen Chart

On the positive side of earnings Yum Brands (YUM) reported earnings of 70 cents compared to estimates of 60 cents. Revenue of $2.54 billion missed estimates of $2.56 billion. Same store sales in the U.S. rose +1% at KFC and Pizza Hut and spiked +6% at Taco Bell. Unfortunately a new problem has hit the stores in China. The new bird flu scare has severely depressed sales of chicken at the KFC stores. YUM gets 40% of its profits from China with 5,300 stores. Despite the problems they are opening another 700 stores this year. The bird flu in 2005 forced same store sales to drop -40%. Sales in China are down -30% so far in April. Despite the news shares of YUM rallied +$4 after the earnings.

Yum Chart

After the bell FedEx (FDX) announced it had agreed to a new seven-year contract with the Postal Service for $10.5 billion. The contract extends the current agreement to fly Express Mail and Priority Mail from city to city in bulk. FedEx transports those items in bulk around the U.S. for the post office. This means the Postal Service does not have to maintain a fleet of aircraft to haul high priority packages around the country. FedEx had to wade through a competitive process to renew the contract. Some were worried UPS would win the contract and FedEx would lose the monster deal. Since the FedEx planes fly every night the addition of a few postal packages is a money maker. FDX shares rallied about $1 in afterhours trading.

FedEx Chart

Delta Airlines (DAL) reported earnings of 10 cents that beat estimates. That equates to a whopping $7 million profit. Ex-items that profit rose to a more realistic $85 million. Revenue rose +1% to $8.5 billion. The first quarter is typically a losing quarter for airlines. Delta cut capacity by 3% in Q1 and will be flat in Q2. They are slowly raising prices where they can. Unfortunately Delta said it earns 3% of its revenue from big companies and spending by those companies has declined -20% over the past month since the sequester went into effect. The airline also said government travel declined in March and is continuing. Travel by vacationers has also declined. Delta said seat revenue would decline by 2% to 3% in April. I personally thought there were more negatives than positives in the report but Delta shares rallied instead of declined.

Delta Chart

A new factor has surfaced to cause airlines grief. The FAA has announced it is cutting 10% of its workforce of 47,000 to fit into the lowered budget after the sequester cuts. They are furloughing workers in an effort to cut $200 million from the budget. Overall they have to cut $637 million and apparently they are struggling. The furloughs are causing flight delays all across the country. More than 1,200 flights were delayed on Monday as a result of the FAA slowdown.

I have one question. Since the $85 billion sequester cuts ONLY cut the "growth" in spending that means the FAA actually has a larger budget in 2013 than they had in 2012. Since they had plenty of cash in 2012 to fund their operations why are they struggling when they have even more cash this year? Inquiring minds want to know.

Netflix (NFLX) released earnings Monday night and shares spiked +$42 on Tuesday. This was the primary reason the Nasdaq performed as well as it did today. The company said it added 2.0 million new U.S. subscribers in Q1. The spike propelled Netflix to be the fourth most expensive company in the S&P by PE. Vulcan Materials is first at a PE of 402, Prologis at 210 and Amazon at 182. Netflix clocks in at 165. Four billion hours were streamed in Q1. Betting against Netflix has been an expensive hobby. The bears were out in force claiming once the recently announced content deals begin and Netflix has to start paying for the monster content deals the house of cards will collapse.

Netflix Chart

The earnings cycle has been better than expected on top line earnings but there are significant problems. Before the tonight's earnings we have seen 132 S&P companies report. More than 67% of those have beaten estimates on earnings thanks to cost cutting. However only 42% have beaten on revenue. That is far lower on revenue than the average of 62% according to Thomson Reuters. That is the lowest in years and suggests trouble ahead.

A more troubling statistic is the guidance. The negative to positive guidance ratio is 14:1 compared to a historical average of 2:1. That is a MAJOR red flag for the rest of 2013. Europe is getting the blame but the sequester excuse is also showing up. As we move deeper into the earnings cycle the size of the companies declines as does the quality of earnings. The big blue chips have economies of scale and a lot of overhead that can be cut to improve earnings. Smaller companies have a tighter workforce and far less expense "fat" that can be cut. They tend to be single focused unlike a company like GE, UTX, etc. If they have slowing sales in one or two divisions they make up for it in the others. In the smaller companies they only have one or two divisions and slow sales impact them harder.

Earnings growth is coming in at about +2% at this point in the cycle. That is well above the breakeven to -2% that many had predicted BUT the cycle is not over until the small companies report. Stay tuned.

Earnings Calendar

The market continues to amaze with days of strong gains on no particular news. Spiking because Europe's economics are so bad the ECB may have to resort to QE is contradictory thinking for me. Why celebrate bond buying in Italy and Spain simply because investors don't want to buy stocks when the Eurozone is in recession? It makes no sense but liquidity driven bull markets never do. Don't fight QE from the Fed, BOJ, BOE and potentially the ECB. They can print money faster than traders can invest it.

The S&P extended its rebound by another +16 points to close at 1579. That is only 14 points below the historic high close at 1593. Fundamentally it makes no sense but we have to play the cards we are dealt.

With April coming to a close I speculated in the weekend commentary we would probably see some window dressing into month end. Remember, April is historically the best month of the year for the Dow. That is a tough trend to fight in a Fed driven environment. However, May is the second worst month of the year for the markets so it will be interesting to see if the Fed can keep the pedal to the metal through May.

Bull markets normally see as much as 5% of their gains in the last several days of a major move as shorts capitulate and buyers chase stocks higher at a frantic rate. Today was a short covering day with the Dow spiking +130 points in the first 15 minutes of trading. Will shorts reenter those positions on Tuesday?

Support is well below at 1540 and resistance is now back at the highs at roughly 1595. A return to the 1595 level with a subsequent failure could be seen as a double top and a perfect setup for a sell in May event.

S&P Chart

The Dow closed at 14,719 and only a few points below the historic high close at 14,865. That becomes the target for this move. Many of the Dow components have already reported and that will remove a lot of stimulus from future Dow moves. Typically once a company announces and reacts the days following that reaction are lackluster and tend to trade lower as investors take profits. This makes it harder for the Dow to maintain its velocity. Boeing and Procter & Gamble are the only Dow components to report on Wednesday. The remaining Dow components to report are as follows.

XOM 4/25
CVX 4/26
PFE 4/30
MRK 5/01
DIS 5/7
CSCO 5/15
HD 5/21
HPQ 5/21

A lot of the Dow gains today came from IBM with a +$4 rebound after plunging -$24 over the last week. That accounted for +35 of the Dow points.

There is a speed bump at 14,756 in the road on the way to 14,865. That is the highs on the 16/17th. If the Dow can continue its gains the 14,865 level would be the inflection point sellers would likely target.

CNBC reported the Dow has been positive on 15 consecutive Tuesdays. That is the longest streak since 1927. More than 70% of the gains in this rally have come on Tuesdays. Obviously somebody has too much time on their hands if they are researching these facts?

Dow Chart

The Nasdaq chart is ugly from a traders perspective. The increasing volatility over the last month has caused significant gaps and broadened the trading range. The Nasdaq can't decide if it is coming or going. The stall today at 3290 was just noise but it suggests there was a lack of real confidence in the move. With Apple reporting after the close I am surprised there were any gains at all. Apple typically influences the direction of the Nasdaq after earnings. The give back of its gains in the afterhours market could suggest Apple will be weak on Wednesday. With AMGN and PNRA getting hit hard after the close the Nasdaq futures are negative and trending lower.

Nasdaq Chart

The Russell short squeeze powered it over the resistance at 918 but it stalled at the 50-day average at 929. If the rebound fails at this level it will be another lower high and setup the retest of 895 as a lower low. The Russell is well below the historic high set back in early March.

Russell Chart

The closer we get to May the more likely investors will become more cautious. However, when trends are as easily visible as the May declines the last three years they tend to do the opposite of what is expected. If everyone is standing on the same side of the boat it capsizes. If everyone is short on May 1st there is a huge potential for a short squeeze. Eventually fundamentals will matter and the market will correct. The Fed and friends can't hold it up forever without a pause for investors to reload.

Enter passively, exit aggressively!

Jim Brown

Send Jim an email


New Plays

More Short Covering Ahead?

by James Brown

Click here to email James Brown


NEW BULLISH Plays

First Solar - FSLR - close: 40.34 change: +1.59

Stop Loss: 38.75
Target(s): 48.00
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 23, 2013
Time Frame: exit PRIOR to earnings in early May
Average Daily Volume = 8.1 million
New Positions: Yes, see below

Company Description

Why We Like It:
It's been a good month for FSLR bulls. Most of the stock's gains came on April 9th following the company's analyst day. FSLR raised their 2013 earnings guidance to $4.00-4.50 a share, which was significantly higher than Wall Street's estimates of $3.60 a share. FSLR also raised their revenue guidance into the $3.8-4.0 billion, again well above analysts' estimates.

FSLR had a high amount of short interest and naturally the stock saw a short squeeze as everyone tried to cover their bearish positions at once. The most recent data listed short interest at 32% of the 60 million-share float. That may not be accurate since many of them may have closed their positions. I suspect that FSLR still has a high amount of short interest. Now after a two-week consolidation sideways under resistance near $40.00, a new breakout higher could spark more short covering.

The April 9th high was $41.00. I am suggesting small bullish positions if FSLR can trade at $41.05. More aggressive traders may want to jump in early now at current levels. Our target is $48.00 but we will plan on closing positions prior to the earnings report in early May.

Remember, small positions. FSLR can be a volatile stock. We want to limit our risk.

Trigger @ 41.05 *Small Positions*

Suggested Position: buy FSLR stock @ (trigger)

- (or for more adventurous traders, try this option) -

buy the May $45 call (FSLR1318E45) current ask $1.34

Annotated chart:

Weekly chart:




In Play Updates and Reviews

Stocks Extend Their Gains

by James Brown

Click here to email James Brown

Editor's Note:
The major U.S. indices continued to rebound on Tuesday. The rally was widespread and suggests the bulls aren't giving up yet.

BIG was triggered.

CCMP and EA were stopped out.


Current Portfolio:


BULLISH Play Updates

Big Lots Inc. - BIG - close: 36.78 change: +0.16

Stop Loss: 34.75
Target(s): 41.50
Current Gain/Loss: -0.1%

Entry on April 23 at $36.80
Listed on April 20, 2013
Time Frame: 3 to 6 weeks
Average Daily Volume = 650 thousand
New Positions: see below

Comments:
04/23/13: BIG continues to push higher. Shares hit our entry trigger at $36.80. I do think it's worth noting that BIG only gained +0.4% versus the +1.0% in the S&P 500 and the +0.7% gain in the RTH retail ETF. Traders did buy the dip twice in BIG near $36.50 this afternoon. I would still consider new positions now but more conservative traders may want to wait for a rally past $37.00 again as an alternative entyr point.

Earlier Comments:
If BIG does break out higher it could see a short squeeze. The most recent data listed short interest at 17% of the 52.7 million share float. The Point & Figure chart for BIG is bullish with a long-term $53.00 target.

current Position: Long BIG stock @ $36.80



1-800-Flowers.com - FLWS - close: 5.41 change: +0.03

Stop Loss: 5.09
Target(s): 5.95
Current Gain/Loss: + 0.0%

Entry on April 22 at $ 5.42
Listed on April 20, 2013
Time Frame: exit PRIOR to earnings on April 30th
Average Daily Volume = 139 thousand
New Positions: see below

Comments:
04/23/13: Tuesday was a quiet session for FLWS. Shares gapped open higher at $5.41 and spent the entire day drifting sideways along the $5.40 level. The trend is still up and I would consider new positions here. Just keep in mind that we're planning to exit prior to earnings on April 30th.

Earlier Comments:
FLWS can be somewhat volatile so I do consider a more aggressive, higher-risk trade. We will want to keep our position size small. Our target is $5.95. However, the plan will be to exit prior to the April 30th earnings report so we don't have much time. The Point & Figure chart for FLWS is bullish with a long-term $10.75 target.

*Small Positions*

current Position: Long FLWS stock @ $5.42



The Kroger Co. - KR - close: 34.67 change: +0.46

Stop Loss: 32.40
Target(s): 36.50
Current Gain/Loss: +2.4%

Entry on April 19 at $33.85
Listed on April 18, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.2 million
New Positions: see below

Comments:
04/23/13: Kroger is still showing relative strength. The stock added +1.3% and hit another new multi-year high. I am not suggesting new positions at this time.

Traders will want to be aware that KR's rival Safeway (SWY) is scheduled to report earnings on April 25th, before the opening bell. SWY's results could influence shares of KR.

Earlier Comments:
Shares of KR are now hitting new 13-year highs. We should take note of its old highs. The closing high was $34.16 and the intraday high was $34.91 from March 1999. These levels could be potential overhead resistance. Yet it was so long ago they may not matter anymore. If you're worried about KR seeing resistance at these levels then you may want to wait for KR to close above these levels before initiating positions.

FYI: KR should begin trading ex-dividend on May 13th, 2013. The quarterly dividend should be 15 cents.

current Position: buy KR stock @ $33.85



Starz - STRZA - close: 22.80 change: +0.33

Stop Loss: 20.85
Target(s): 24.50
Current Gain/Loss: +4.8%

Entry on April 10 at $21.75
Listed on April 06, 2013
Time Frame: exit PRIOR to earnings on May 9th
Average Daily Volume = 1.6 million
New Positions: see below

Comments:
04/23/13: The bullish momentum continues with a +1.4% gain on Tuesday. This is another new high for the stock. Investors might want to start raising their stop loss again.

*Small Positions*

current Position: Long STRZA stock @ $21.75

04/17/13 new stop loss @ 20.85
04/13/13 new stop loss @ 20.65
04/10/13 trade opened on gap higher at $21.75
04/09/13 adjust entry trigger from $21.50 to $21.55



The TJX Companies - TJX - close: 47.16 change: +0.02

Stop Loss: 46.45
Target(s): 52.00
Current Gain/Loss: - 1.2%

Entry on April 09 at $47.75
Listed on April 08, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.7 million
New Positions: see below

Comments:
04/23/13: TJX closed virtually unchanged on the session. Overall I found today's performance to look bearish. The stock garnered bullish analyst comments before the opening bell, which sparked the gap open higher. Traders sold the rally and TJX gave back all of its gains.

Readers may want to just exit early now. I remain very cautious here. We're not suggesting new positions.

Earlier Comments:
Our target is $52.00. However, there is a risk that the $50.00 mark could be round-number resistance.

current Position: Long TJX stock @ $47.75

04/18/13 today's decline is bad news. TJX looks ready to hit our stop at $46.45 soon.



BEARISH Play Updates

The ADT Corp. - ADT - close: 43.76 change: -0.08

Stop Loss: 44.65
Target(s): 38.00
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 16, 2013
Time Frame: exit PRIOR to earnings on May 1st
Average Daily Volume = 3.7 million
New Positions: Yes, see below

Comments:
04/23/13: ADT briefly traded above short-term technical resistance at its simple 10-dma before reversing lower. More aggressive traders could use today's move as a new bearish entry point and just put a stop loss above today's high (44.61). I am suggesting we wait for a new relative low.

Right now the plan is to launch bearish positions at $42.50. If triggered our target is $38.00. More conservative traders may want to exit near $40.00 instead. The Point & Figure chart for ADT is bearish with a $35 target.

Keep in mind that we plan to exit prior to earnings on May 1st.

Trigger @ $42.50

Suggested Position: short ADT stock @ (trigger)



BroadSoft, Inc. - BSFT - close: 24.03 change: -0.07

Stop Loss: 25.15
Target(s): 20.75
Current Gain/Loss: + 1.9%

Entry on April 11 at $24.50
Listed on April 09, 2013
Time Frame: exit PRIOR to earnings on May 6th
Average Daily Volume = 854 thousand
New Positions: see below

Comments:
04/23/13: BSFT did not participate in the market's rally today and that's good news if you're bearish. Readers could use this weakness as a new entry point but I am growing concerned that BSFT is not moving fast enough for us. We want to exit prior to the earnings report on May 6th.

Earlier Comments:
Please note that we do want to limit our position size to reduce our risk. The most recent data listed short interest at 21% of the small 27.6 million-share float. Thus if BSFT were to suddenly turn higher it could spark a short squeeze. Furthermore there has been some speculation that BSFT is a takeover target. You may want to consider buying a put option instead of shorting the stock as a way to limit your risk.

*Small Positions*

current Position: short BSFT stock @ $24.50

- (or for more adventurous traders, try this option) -

(closed option position on April 22nd)
May $25 put (BSFT1318Q25) entry $2.60 exit $2.20 (-15.3%)

04/22/13 closed the May $25 put position at the open
04/20/13 new stop loss @ 25.15,
prepare to exit the May $25 puts immediate on Monday (04/22)



Computer Sciences Corp. - CSC - close: 45.21 change: +0.90

Stop Loss: 47.25
Target(s): 42.00
Current Gain/Loss: - 1.7%

Entry on April 15 at 46.00
Listed on April 13, 2013
Time Frame: 4 to 6 weeks
Average Daily Volume = 1.5 million
New Positions: see below

Comments:
04/23/13: I cautioned readers yesterday that we were going to see CSC bounce soon. The market's widespread rally today helped shares gain +2.0%. The stock is likely to test the $46.00 area and its 10-dma soon. I am not suggesting new positions at this time.

current Position: short CSC stock @ $46.00

- (or for more adventurous traders, try this option) -

Long May $45 PUT (CSC1318Q45) entry $1.95

04/20/13 new stop loss @ 47.25



Virtusa Corp. - VRTU - close: 22.54 change: +0.16

Stop Loss: 22.65
Target(s): 20.10
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 22, 2013
Time Frame: 3 to 4 weeks
Average Daily Volume = 116 thousand
New Positions: Yes, see below

Comments:
04/23/13: VRTU is still hovering near its simple 50-dma. If shares happen to bounce then nimble traders could use a failed rally near the 20-dma as an alternative bearish entry point. I am suggesting we wait for a breakdown with a trigger to open bearish positions at $21.80. We'll use a stop at $22.65. Our initial target is $20.10. I would keep our position size small to limit our risk.

Trigger @ 21.80 *Small Positions*

Suggested Position: short VRTU stock @ (trigger)



CLOSED BEARISH PLAYS

Cabot Microelectronics - CCMP - close: 33.36 change: +0.78

Stop Loss: 33.40
Target(s): 30.25
Current Gain/Loss: -2.2%

Entry on April 03 at $32.69
Listed on April 02, 2013
Time Frame: exit PRIOR to earnings on April 25th
Average Daily Volume = 104 thousand
New Positions: see below

Comments:
04/23/13: Semiconductor stocks were some of the market's better performers today with the SOX index rising +2.0%. Shares of CCMP managed to outpace its peers with a +2.39% gain. CCMP also hit our stop loss sat $33.40 once it pierced technical resistance at its 200-dma.

Earlier Comments:
We want to keep our position size small.

*Small Positions*

closed Position: short CCMP stock @ $32.69 exit $33.40 (-2.2%)

04/23/13 stopped out
04/18/13 new stop loss @ 33.40

chart:



Electronic Arts - EA - close: 17.42 change: +0.14

Stop Loss: 17.55
Target(s): 15.00
Current Gain/Loss: -4.8%

Entry on April 18 at $16.75
Listed on April 17, 2013
Time Frame: exit PRIOR to earnings on May 7th
Average Daily Volume = 4.0 million
New Positions: see below

Comments:
04/23/13: EA continued to bounce on Tuesday and shares hit our stop loss at $17.55.

closed Position: short EA stock @ $16.75 exit $17.55 (-4.8%)

- (or for more adventurous traders, try this option) -

May $17 PUT (EA1318Q17) entry $1.00 exit $0.52 (-48%)

chart: