Editor's Note:

Good evening. As the markets have been chopping around this week so has our portfolio. We are now firmly positioned to the downside with four short positions (including our play released tonight). IWM and USG performed well for us today but we had a scare with SINA in early trading before the stock reversed, closing at its lows. If the market does in fact decline from here I like our two long positions waiting to be triggered and want to take advantage of any weakness in these stocks. I plan to release 3 to 5 more plays this weekend to get our portfolio ramped back up. Last week's plunge and snap back up is about enough to make traders crazy. I think we may revisit those lows in the coming weeks. Good luck stay nimble.

Current Portfolio:


BULLISH Play Updates

Dr. Pepper Snapple Group - DPS - close 37.89 change +0.02 stop 32.49

Target(s): 36.80, 38.80
Key Support Areas: 35.75, 34.75, 32.70
Key Resistance Areas: 36.80, 37.45
Current Gain/Loss: N/A
Time Frame: Several weeks
New Positions: Waiting for trigger

Comments:
DPS is exhibiting great strength and made new 52-week highs todays again. But it may be forming a red candle high with today's price action. This is a bearish signal I've learned that usually signals more downside to come. So we will wait patiently for the pullback to our trigger near $35. If there is significant weakness in the market DPS should make it down here and I want to be ready to take advantage of it. $35 is just above its 50-day and 20-day SMA. After several weeks of slowly consolidating lower and sideways DPS broke to the upside and now we must wait until it turns back to retest the broken resistance which should now act as support, along with the aforementioned SMA's. We think DPS will pull back to the $35.00-34.50 zone before moving higher. Therefore we are suggesting a trigger to open positions if the stock pulls back near the $35.00 area with a stop loss at $32.49. Please keep your position size small since the market has been so volatile.

Suggested Position: Long DPS stock if it trades near $35.00

Entry on: May xx
Earnings Date: More than 2 months (unconfirmed)
Average Daily Volume: 1.9 million
Listed on: May 8, 2010


Titanium Metals - TIE - close 17.41 change +0.34 stop 14.70

Target(s): 16.95, 18.00
Key Support Areas: 16.00, 15.50, 15.00
Key Resistance Areas: 16.00, 16.70, 17.25
Current Gain/Loss: Unopened
Time Frame: Several weeks
New Positions: Waiting for trigger

Comments:
TIE was up another +1.99% today but I still suggest patience as we stalk it. I expect TIE to eventually make a trip down to its 50-day SMA and 20-day SMA which are near each other. Our trigger is now $15.75 which is between the two SMA's. If TIE gets down here it would also create a bullish inverse head and shoulders pattern on the daily chart. I'll leave my comments from the new play that was released. TIE reported earnings on May 5th of 9 cents versus about 3 cents estimates. The stock reacted favorably even though the overall market plunged late last week. The stock has been consolidating in a bull flag for the past month and I suggest readers take advantage of any pullback in the stock to the $15.60 area. This is just above the 50-day SMA and the midpoint of the bull flag, which I think TIE will eventually break out of to the upside. This sets up a good risk reward trade: we are risking $1.05 to make $1.20. If triggered we our looking for the stock to trade back up $16.95, which would garner a nice +7.6% gain. Our second more aggressive target is $18.00 which is near highs from May 2008. Note, it may take several days to a week to get filled on this trade but I wanted to list the trade in case there is significant weakness in the coming days.

Suggested Position: Long TIE Stock if it trades down near the $15.75 area

Entry on xx at xx
Earnings Date 8/4/2010 (unconfirmed)
Average Daily Volume: 3.8 million
Listed on 5/10/10, 2010


BEARISH Play Updates

iShares Russell 2000 - IWM - close 70.93 change -0.69 stop 73.10

Target(s): 69.05, 68.05
Key Support Areas: 70.25, 69.75
Key Resistance Areas: 72.10, 72.60
Current Gain/Loss: +1.14% Time Frame: About 2 weeks

New Positions: Yes

Comments:
IWM rallied right up to $72.15 this morning and failed. Per the new play release we are short IWM at $71.75. $70.60 is intraday support and if it breaks IWM should trade down to $69.50. If that breaks we should be well on our way to our first target. I'll leave my comments from the new play release. The snap back rally from last week's plunge has been nothing short of incredible. But I believe it is time for a snap back down and I suggest readers take advantage of it by initiating short positions in IWM. The ETF is has already made it back up to its 20-day SMA from below and has also retraced over 61.8% of the decline from the April 26 highs of $74.66 to the May 7 low of $64.64. I threw out the long bottom wick from Thursday's plunge because it may or may not have been "real." In any event, anyone who has held positions throughout the past couple of weeks has to be thinking about selling positions now that the retracement back up has come so far. And if they were stopped out they are probably hesitant to jump back in the market right now. In addition, IWM is approaching a primary downward trend line and for options traders volatility has been sucked out of the option premium over the last several days. An increase in volatility will be good for option traders. I believe now is a good time to initiate PUT positions at current levels or a failed rally into the $72 area just overhead. This also gives us a good reference point to place a stop at $73.10 which is above the downtrend line and the 20-day SMA. I will be surprised if IWM can break through this congestion but if it does we will have a relatively small loss. The trade also set up a good 2:1 risk reward ratio. We are risking about $1.30 to make $2.60. Our stop is $73.10.

Current Position: Short IWM stock at $71.75

Option Traders:
Suggested Position: Buy JUNE $72.00 PUT

Entry on May xx
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 79 million
Listed on May 12, 2010


Sina Corporation - SINA - close 35.41 change +0.30 stop $37.05 *NEW*

Target(s): 33.25 (hit), $33.50, 32.50, 30.50
Key Support Areas: $33.40 32.50, 30.50
Key Resistance Areas: 35.40, 36.00, 36.80
Current Gain/Loss: -1.32%
Time Frame: 1 week
New Positions: Yes, but only as a quick trade

Comments:
SINA gave us a scare today when it rocketed higher at the open towards our stop. However, the stock immediately reversed and closed the day at its lows and below its 20-day SMA. This signals to me that shorts were covering and taking some profits but the sellers stepped in and the stock sold off the remainder of the day. My biggest concern at this point is that SINA is right at a key pivot level at $35.30. If it stays above here buyers may step in but I think the overall market is going to be weak in the coming days which should push price back down. I expect the overhead resistance, congestion, and SMA's to hold. Our first target of $33.25 was hit last week. SINA is approaching earnings on May 17th so we plan to be officially out of the trade on or before this date. I urge readers to book gains or tighten stops as SINA approaches $33.50. This target is just above the low from Tuesday and is probably a good place to tighten stops or take profits. The stock remains below all of its major daily and weekly SMA's. The 50-day SMA crossed below the 200-day SMA which is a bearish signal that confirms our outlook for this stock.

Current Position: Short SINA stock at $34.95

Option Traders:
Suggested Position: JUNE $35.00 PUT

Entry on May 4,2010 at $34.95
Earnings Date May 17, 2010 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on May 1, 2010


USG Corp. - USG - close 22.24 change -0.22 stop 23.25

Target(s): 19.25, 18.25
Key Support Areas: 21.75, 20.75, 20.00, 19.25
Key Resistance Areas: 22.25, 23.00
Current Gain/Loss: -2.55%
Time Frame: About 2 weeks
New Positions: Yes

Comments:
USG traded in wild fashion today but ultimately ended up closing down -0.98%. I am expecting further downside from here. I'll leave my technical comments from last night as they have not changed. When looking at the daily chart USG has rallied into a downtrend line from the April 30th high and is approaching resistance. USG has also retraced just about 61.8% of the plunge from last week. USG traded up to $22.75 yesterday and the 61.8% retracement is $22.88. I like to use 50% retracements (which is where USG reversed on Tuesday and my basis for releasing the play) and 61.8% retracement levels as potential turning points in stocks after large moves. This is the thesis for shorting this stock. Nothing always works in our set-ups, but these are some of the indicators we look for when entering trades and that have been successful in the past. If it fails we will step aside and look for better opportunities. *NOTE: Please use small position due to the volatility in this stock and to limit risk.

Current Position: Short USG stock at $21.90

Option Traders:
Suggested Position: Buy JUNE $20.00 PUT

Entry on May 12, 2010
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 7.5 million
Listed on May 11, 2010