Editor's Note:

Good evening. Boy, what a day. I have to say the gap down in the market today caught me off guard and our long positions in the model portfolio suffered from it. We closed 5 positions today as 3 were stopped out and 2 targets were hit for nice gains. The net percentage gain/loss on the closed positions is -6.34%. Our portfolio is narrow going into Friday options expiration and we will group this weekend with several more new plays. Trying to predict what happens tomorrow is simply a guess.

Our short positions have saved us on our long positions with losses. With all of the geopolitical events happening right now cash is a position and probably the best place to be until things get sorted out, especially if you are holding positions for any length of time. There has to be some sort of bounce in the markets and we still have a couple of longs to take advantage of it. My S&P 500 range is getting lower by the day and I expect more volatility, so staying on your toes is extremely important. Please feel free to email me with any questions.

Current Portfolio:


BULLISH Play Updates

EMC Corp. - EMC - close 17.68 change -0.52 stop 16.95 *NEW*

Target(s): 18.20, 19.00, 19.50
Key Support Areas: 17.65, 17.55, 17.44, 17.10
Key Resistance Areas: 17.80, 18.00, 18.50, 18.85
Current Gain/Loss: -0.39%
Time Frame: 1 to 2 weeks
New Positions: Yes, on weakness with a tight stop

Comments:
We were able to initiate long positions in EMC on the gap down today at $17.75. The stock bounced around and closed off of its lows but the market did not which is an encouraging sign. EMC is now below a long term pivot level dating back to June of 2007 at $18.00. The stock also broke through its upward trend line that began in May 2009. EMC is still above its 200-day SMA which should offer support below. I am playing this stock for a bounce and believe that we will get it but there could be another flush first. Since we entered at a better price this morning I want to move the stop down to $16.95 which is below the 200-day SMA and the plunge low of May 6th. There is no doubt this is aggressive so readers who want to avoid risk should exit the position to preserve capital. You can still exit for almost breakeven. I like the specific technology sector of EMC's business and I believe the stock is poised to bounce here with the overall market. EMC closed above the May 7 low of $17.66 which makes me want to give this some time to work. In light of the overall bearish tone in the market I would also like to offer a new lowered target of $18.20 which is near its 100-day SMA.

Current Position: Long EMC Stock, entry at $17.75.

Entry on May 20, 2010
Earnings Date: More than 2 months (unconfirmed)
Average Daily Volume: 25 million
Listed on 5/19/10


Dr. Pepper Snapple Group - DPS - close 36.27 change -1.80 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:
We may get our entry in DPS after all as the stock is finally selling off. So we still wait patiently for the pullback to our trigger near $35.50. If there is more weakness in the market DPS should make it down here and I want to be ready to take advantage of it. If triggered our stop is $32.49. I view this as an aggressive trade so please keep your position size small since the market has been so volatile.

Suggested Position: Long DPS stock if it trades near $35.50

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


General Electric - GE - close 16.26 change -1.00 stop 15.94 *NEW*

Target(s): 17.00, 17.45, 18.25
Key Support Areas: 16.25, 16.00
Key Resistance Areas: 16.80, 17.20, 17.80, 18.00
Current Gain/Loss: -4.35% Time Frame: Several weeks

New Positions: Yes, on weakness with a tight stop

Comments:
GE closed on its 200-day SMA and avoided our stop just below. The stock is also just below its upward trend line that began in November and the pivot level of $17.00 dating back to September 2008. It is basically do or die time here for GE and the market in general. I'm looking for a bounce but I urge readers to be careful. I am making adjustments to the stop and targets as listed above to account for volatility tomorrow. This is an aggressive move so more conservative readers may want to simply exit GE, especially if there is any strength in the market tomorrow. I'm viewing the pullback in GE as opportunity to enter a quality name that may catch a bid as investors flee from more speculative names.

Suggested Position: Long GE Stock, entry at $17.00.

Entry on May 19, 2010
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 88 million
Listed on 5/18/10, 2010


BEARISH Play Updates

NONE. ALL SHORT POSITIONS CLOSED DURING TODAY'S MARKET WEAKNESS.


CLOSED BULLISH PLAYS

AMR Corp. - AMR - close 6.53 change -0.48 stop 6.60

Target(s): 7.95, 8.25, 8.65
Key Support Areas: 6.44, 6.30, 6.00
Key Resistance Areas: 6.85, 7.00, 20-day SMA
Current Gain/Loss: -8.59%
Time Frame: Several weeks
New Positions: Closed

Comments:
Our thesis for taking this trade was a converging trend line and horizontal support near the $7.00 level. This thesis was still valid as of yesterday's close but today proved too much for the stock to overcome and the set-up failed. I also expected lower oil prices to bode well for the airlines but it wasn't meant to be, so we have taken a loss on the position at our stop. For readers who may still have positions there isn't much more support until $6.00 which is prior resistance from August and November 2009, so please be careful. There is some support at $6.45 and then a gap fill from early December at $6.30, but that's about it. If the overall market can muster a rally AMR may catch a bid here.

Closed Position: Long AMR stock at $6.60, entry was at $7.22

Annotated chart:

Entry on May 18, 2010
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 19 million
Listed on 5/15/10, 2010


Broadridge Financial Solutions - BR - close 19.92 change -0.80 stop 20.36

Target(s): 21.95, 22.40, 22.75
Key Support Areas: 19.78
Key Resistance Areas: 20.70, 21.00, 22.00
Current Gain/Loss: -4.19%
Time Frame: Several weeks
New Positions: Closed

Comments:
Our thesis for taking this trade is basically the same as AMR, horizontal support and an upward trend line converging near the $21 level, along with good fundamentals as the stock trades below a 13 PE. However, the market has simply been too much for BR to overcome and the stock has been punished. So we have stepped aside at $20.36 as our stop was hit. For readers who may still have positions BR my line in the sand would be $19.50 as this was prior highs from April 2009 and lows from September 2009. If it breaks down from here the next stop is most likely $15.50 so I urge you to be careful.

Closed Position: Long BR Stock at $20.36, entry was at $21.25

Annotated weekly chart:

Entry on May xx
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 1.2 million
Listed on 5/15/10, 2010


Quicksilver Resources, Inc. - KWK - close 12.22 change -0.25 stop 11.75

Target(s): 13.30, 14.25
Key Support Areas: 10.80, 10.10
Key Resistance Areas: 12.00, 12.25, 12.80
Current Gain/Loss: -7.48%
Time Frame: Several weeks
New Positions: Yes

Comments:
Our thesis for taking this trade was the sideways channel KWK has been trading in for the past 9 months, the double bottom it formed in November and May, and the fact that natural gas looks to be forming a solid base. It just goes to show you that none of these things really matter when global markets ware under severe pressure acting in unison. In any event, KWK broke down out of the sideways channel and we were stopped out of the position. Readers need to be cautious with positions here as I see limited support down to $10.80 and then $10.10 which is far below current levels. You could place stop under today's low if you want to give it some time and if you do I would be selling into strength in the coming days.

Closed Position: Long KWK Stock at $11.75, entry was at $12.70.

Annotated chart:

Entry on May 17, 2010
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 3.0 million
Listed on 5/15/10, 2010


CLOSED BEARISH PLAYS

Baidu, Inc. ADR - BIDU - close 67.58 change -2.55 stop 72.75 *NEW*

Target(s): 71.50 (hit), 69.10 (hit on gap at $67.25), 65.10
Key Support Areas: 67.00, 65.00
Key Resistance Areas: 69.69, 71.00.
Current Gain/Loss: +9.43%
Time Frame: Several Weeks
New Positions: Closed

Comments:
BIDU gapped below our second target so per last night's updates we are flat on the position for a +9.43% gain. For readers who still have positions I would take profits here and book the gain. Use the above support/resistance areas as a guide. Unless we crash, which is a possibility, stocks should get some relief soon and I would not want to sit through a bounce.

Closed Position: Short BIDU stock at $67.25, entry was at $74.25

Annotated chart:

Entry on May 14, 2010
Earnings July 15, 2010 (unconfirmed)
Average Daily Volume: 68 million
Listed on May 13, 2010


Leggett & Platt, Inc. - LEG - close 22.54 change -1.06 stop 24.25

Target(s): 23.35 (hit), 23.00 (hit), 22.25
Key Support Areas: 22.50, 22.00
Key Resistance Areas: 23.25, 23.65
Current Gain/Loss: +4.49%
Time Frame: Several Weeks
New Positions: Closed

Comments:
LEG gapped open lower and quickly traded below our second target so per last night's updates we are flat on the position for a +4.49% gain. For readers who still have positions I would take profits here and book the gain. Use the above support/resistance areas as a guide. Unless we crash, stocks should get some relief soon.

Closed Position: Short LEG stock at $23.00, entry was $24.08

Annotated chart:

Entry on May 17, 2010
Earnings More than 2 months (unconfirmed)
Average Daily Volume: 2 million
Listed on May 15, 2010