Editor's Note:

Stocks have continued to show weakness. The S&P 500 is now testing the neckline (support) on its bearish head-and-shoulders pattern. A breakdown from here would be extremely bearish and forecast a drop toward the 810-800 zone. More conservative traders may want to consider exiting any (and all) bullish positions right now to preserve capital (exit the ERY inverse ETF)


BULLISH Play Updates

A.O.Smith Corp. - AOS - close: 32.18 change: -1.25 stop: 31.75 *new*

Ouch! AOS lost 3.7% and plunged back toward broken resistance and what should be support near $32.00. More conservative traders may want to exit early right now to lock in a profit. I'm raising our stop loss to $31.75. I'm not suggesting new positions at this time. Our first target to take profits is at $34.50. Our second target is $37.00 but we will plan to exit ahead of the July 17th earnings report.

Entry on      June 23 at $30.25 *triggered       
Change since picked:     + 1.93   			
Earnings Date          07/17/09 (confirmed)    
Average Daily Volume:       195 thousand
Listed on  June 20, 2009    


Bank of Montreal - BMO - close: 40.53 change: -1.60 stop: 39.90

Financials continued to under perform and BMO lost close to 3.8%. The close under the 30-dma and the $41.00 level is short-term bearish. Shares could find round-number support at $40.00 but more conservative traders may want to exit early right now. If the S&P 500 breaks the 880 level I expect BMO to break $40.00. 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:     - 0.85   			
Earnings Date          08/25/09 (unconfirmed)    
Average Daily Volume:       729 thousand
Listed on  June 25, 2009    


Dell Inc. - DELL - close: 13.00 change: -0.42 stop: 12.75 *new*

There was no follow through on DELL's impressive bounce from Monday. More conservative traders may want to exit early right here especially with the failed rally near $13.50 today. I'm raising our stop loss to $12.75. I'm not suggesting new positions in DELL.

Entry on      June 09 at $12.55 
Change since picked:     + 0.45   			
Earnings Date          08/27/09 (unconfirmed)    
Average Daily Volume:        29 million 
Listed on  June 06, 2009    


3x Energy Bear ETF - ERY - close: 27.29 change: +1.94 stop: 20.75

Target achieved! As oil and oil stocks continue to sink the ERY is in rally mode. This ETF gained 7.6% and hit $27.44 intraday. Our first target to take profits was $27.40. I am moving our stop loss to $22.40. Our second target is $29.90.

This is a very volatile (triple-leveraged) ETF so we're using a wide stop loss and I'm suggesting readers only trade half (or less) their normal position size.

chart:

Entry on      July 02 at $23.30 *triggered       
Change since picked:     + 3.99
                              /1st target hit @ 27.40 (+17.5%)
Earnings Date          00/00/00 
Average Daily Volume:       4.0 million 
Listed on  July 01, 2009    


MEDNAX Inc. - MD - close: 44.40 change: +1.18 stop: 41.40 *new*

MD continues to show impressive relative strength with a 2.7% gain in a tough market. I am raising our stop loss to $41.40. I am not suggesting new bullish positions. Our first target is $47.40.

Entry on      July 01 at $43.01 *triggered       
Change since picked:     + 1.39   			
Earnings Date          08/03/09 (unconfirmed)    
Average Daily Volume:       367 thousand
Listed on  June 30, 2009    


Morgan Stanley - MS - close: 26.15 change: -0.70 stop: 24.49 *new*

MS looks like it's setting up for a test of support at $25.00 and its 100-dma and the bottom of its bullish channel. This will be an important test. Given the volatility in this market our stop loss at $24.75 might be too tight. I'm inching our stop down to $24.49. The plan is to buy MS at $25.25 but readers may want to wait for signs of a bounce first before jumping in.

If triggered at $25.25 our first target is $27.75. Our second target is $29.75. We don't want to hold over the late July earnings so the play may close early.

FYI: It's important to note that Goldman Sachs (GS) reports earnings on the morning of July 14th. GS' earnings report and their comments could have a big impact on shares of MS.

--New Trade, buy dip @ 25.25 --
Entry on      July xx at $xx.xx *triggered       
Change since picked:     - 0.00   			
Earnings Date          07/22/09 (unconfirmed)    
Average Daily Volume:      29.4 million 
Listed on  June 23, 2009    


Western Digital - WDC - close: 24.99 chg: -1.37 stop: 24.45 *new*

Watch out! The weakness in WDC accelerated today. More conservative traders will want to seriously consider an early exit right here! WDC has found support at its rising 40-dma in the last weeks and it's currently at $24.70. I'm raising our stop loss to $24.45. I am not suggesting new positions at this time but a bounce from $24.70 would be tempting, especially with such a tight stop. Our first target is $29.75.

Entry on      June 25 at $26.10 *triggered       
Change since picked:     - 1.11   			
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       4.6 million 
Listed on  June 24, 2009    


Wellpoint Inc. - WLP - close: 51.21 change: +1.21 stop: 48.75 *new*

Healthcare stocks were higher today on news that the Obama administration was backpedaling from the universal healthcare plan. Shares of WLP gained 2.4% but failed to break resistance at $52.00. I am not suggesting new positions and I'm raising the stop loss to $48.75. Our first target is $54.00. Our second target is $57.40.

Entry on      June 22 at $49.25 *triggered       
Change since picked:     + 1.96   			
Earnings Date          07/29/09 (unconfirmed)    
Average Daily Volume:       4.4 million 
Listed on  June 20, 2009    


BEARISH Play Updates

Carpenter Tech. - CRS - close: 17.94 chg: -0.77 stop: 20.25 *new*

Target achieved. Material-related stocks continued to be weak and CRS gave up another 4.1%. The intraday low was $17.64. Our first target to take profits was $18.05. I am lowering our stop loss to $20.25. Our second target is $16.25.

chart:

Entry on      July 04 at $19.62 /gap down entry
                              /originally listed at $20.06
Change since picked:     - 1.68   		
                              /1st target hit @ 18.05 (-8.0%)
Earnings Date          07/28/09 (unconfirmed)    
Average Daily Volume:       586 thousand
Listed on  July 04, 2009    


DuPont - DD - close: 24.04 change: -1.29 stop: 27.05

DD lost another 5% with a drop straight to support near $24.00. I am not suggesting new positions at this time. I repeat my previous comments that more conservative traders may want to lower their stops to just above new resistance near $26.25. I'm leaving the stop above the 200-dma near $27.00. Our first target $22.25. Our second target is $20.25.

Entry on      June 16 at $25.20 
Change since picked:     - 1.16   			
Earnings Date          07/21/09 (unconfirmed)    
Average Daily Volume:       9.1 million 
Listed on  June 16, 2009    


iShares Mexico - EWW - close: 35.07 change: -0.87 stop: 38.05

The reversal in EWW continues. Today saw this ETF breakdown under its 50-dma and exponential 200-dma. More conservative traders can lower their stop toward last Wednesday's high of $37.61. Our target is $30.25. My time frame is probably another four to six weeks.

Entry on      June 22 at $34.92 
Change since picked:     + 0.15   			
Earnings Date          00/00/00 
Average Daily Volume:       3.9 million 
Listed on  June 22, 2009    


Fastenal Co. - FAST - close: 30.56 change: -0.88 stop: 34.05

FAST continues to breakdown with another -2.8% but shares are nearing potential round-number support at $30.00. Our first target is $30.15. Our second target is $28.05.

Entry on      July 04 at $31.90 
Change since picked:     - 1.34   			
Earnings Date          07/13/09 (unconfirmed)    
Average Daily Volume:       1.8 million 
Listed on  July 04, 2009    


Gamestop - GME - close: 20.46 change: -0.58 stop: 23.25 *new*

GME is nearing the late June low and potential round-number support at $20.00. I would expect another bounce from $20.00 but GME should find new resistance near $22.00. I am lowering the stop loss to $23.25.

If you haven't taken any profits yet you may want to do so now. 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:     - 3.80
                              /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: 40.65 change: -0.96 stop: 44.05

GPRO is finally starting to breakdown from its multi-week consolidation. The next challenge for the bears is potential round-number support at $40.00. Look for a break under $40.00 if you're looking for a new entry point. Our first target is $38.05. Our second target is $35.25. FYI: The P&F chart is bearish with a $32.00 target.

Entry on      June 23 at $42.03 /gap higher entry
                             /originally listed at $41.64
Change since picked:     - 1.38   			
Earnings Date          07/30/09 (unconfirmed)    
Average Daily Volume:       449 thousand
Listed on  June 23, 2009    


McDermott Intl. - MDR - close: 17.44 change: -0.74 stop: 21.25

MDR lost another 4% and is very close to our first target. Readers can prepare to take profits. I'm not suggesting new positions at this time. Our first target is $17.25. Our second target is $16.05.

Entry on      July 04 at $18.83 /gap down entry
                              /originally listed at $19.34
Change since picked:     - 1.39   			
Earnings Date          08/11/09 (unconfirmed)    
Average Daily Volume:       3.2 million 
Listed on  July 04, 2009    


iShares Materials - MXI - close: 43.47 change: -1.27 stop: 48.05

Material stocks were real under performers today and MXI lost 2.8%. I am not suggesting new positions at this time. Please note that we're making a minor adjustment on our second target to exit from $41.00 to $41.25.

Entry on      June 16 at $47.55 
Change since picked:     - 4.08
                              /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: 42.08 change: -1.24 stop: 45.75

Defense stocks were accelerating lower today and RTN broke down under its 100-dma. 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:     - 2.14  			
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       3.5 million 
Listed on  June 24, 2009    


Steel Index - SLX - close: 38.40 change: -1.06 stop: 44.05

I was expecting a little oversold bounce in the SLX today but it failed to show up. What did show up was volume. Volume was very strong two days in a row. Aggressive traders may want to consider new positions now. I'm sticking with the plan to short SLX in the $41.50-42.50 zone. Our first target is $35.50. FYI: The Point & Figure chart is bearish with a $30.00 target.

Entry on      July xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       297 thousand
Listed on  July 06, 2009    


Homebuilders ETF - XHB - close: 10.86 change: -0.31 stop: 12.55

The XHB is sinking to new two-month lows. More conservative traders might want to consider a tighter stop near last week's high of $12.08.

Our target is $10.10. I am setting a secondary target at $9.10 but I strongly suggest readers take some money off the table at $10.10.

Entry on       May 23 at $11.96 
Change since picked:     - 1.10   			
Earnings Date          00/00/00
Average Daily Volume:        10 million 
Listed on   May 23, 2009    


CLOSED BULLISH PLAYS

Bally Tech. - BYI - close: 28.44 change: -0.61 stop: 27.95

I'm suggesting we cut our losses in BYI. The stock continues to have a bullish trend of higher lows but gambling is a weak sector right now. I'd rather cut our losses here and move BYI to a watch list.

chart:

Entry on      June 26 at $30.10 *triggered       
Change since picked:     - 1.66<-- early exit @ 28.44 (-5.5%)
Earnings Date          08/19/09 (unconfirmed)    
Average Daily Volume:       859 thousand
Listed on  June 24, 2009    


Energizer Holdings - ENR - close: 51.80 change: -0.42 stop: 49.90

I'm pulling the plug on ENR. Shares are still consolidating sideways, which might be considered relative strength. My larger concern is the action in the S&P 500. Let's exit early and look for stocks that are actually moving!

chart:

Entry on      July 02 at $52.75 *triggered       
Change since picked:     - 0.95 <-- exit early @ 51.80 (-1.8%)
Earnings Date          07/28/09 (unconfirmed)    
Average Daily Volume:       781 thousand
Listed on  July 01, 2009