Editor's Note: Good Evening. Thursday was a difficult trading day. We got picked off on our long NYX play only to see it reverse. However, we did close EBAY for a +5.77% gain which outweighed the loss on NYX. LOPE was closed at the open for small loss. The market seemed on the verge of collapse again before sellers disappeared and buyers showed up. I have been calling for a relief rally for several days and have been dead wrong. We will get it and if tomorrow's non-farm payrolls report is already priced into the market it could create a "buy the news" event. There is no way to predict what will happen until 8:30 AM tomorrow so initiating new plays without being able to manage them intraday is not advised. We have one new short position waiting to be triggered in the retail sector. Please email me with any questions.

Current Portfolio:


CLOSED BULLISH PLAYS

NYSE Euronext - NYX - close 27.57 change -0.06 stop 26.69

Target(s): 28.40, 29.35, 29.80
Key Support/Resistance Areas: 30.50, 29.40, 27.50, 26.80
Final Gain/Loss: -21.95%
Time Frame: 1 week
New Positions: Closed

Comments:
7/1: Ouch! This is a tough loss to take. That about sums it up. NYX broke down this morning and traded right down to our stop before immediately reversing, regaining all of the early losses very quickly. The stock collapsed at 10:00 AM and was back to its opening price by 12:30 PM. I've provided a 30-minute chart below to illustrate. I placed the stop below all of NYX's closing prices since February which I honestly though would be enough if the stock was weak today. However, there was a wick below our stop on June 8 but I threw it out which proved to be the wrong choice. When I saw this happening I could not believe my eyes. The market has a way of humbling traders and this time it was brutal for me. For readers who still have positions, I'm still a believer in this trade. I suggest sticking with the set-up and trailing stops up if NYX starts moving higher. For those interested, I've shared a stop rule below that I sometimes enforce on my swing trades.

For traders that can trade intraday, I have a stop rule that I sometimes use if my swing trades are moving against me and are nearing stops. First, I typically use 15 or 30 minute candlestick charts for monitoring swing trades and I do not use GTC stops. Rather I place new stops everyday and change them frequently on open positions. If my position is nearing a stop I want to see the candlestick close below my stop. If it does, then I reconsider the circumstances and place a new stop below that candlestick or just exit the position if it is moving too fast. Often times this saves me from getting stopped out and looking for a better exit. The volatility in this market environment is extremely tough to deal with, especially if you can not make these decisions intraday.

6/30: NYX Broke out of a steep downtrend line, rallied to test its 50-day SMA and has now to a key support level near $27.50. The stock has upward trend line from the its 2/5 lows to its 6/8 lows. This has outperformed the overall market by a mile. NYX should also benefit from the FinReg bill and I suggest we play this stock for a bounce. Our stop is below the trend line and our targets are fairy tight and achievable. $29.35 is +6% from current levels.

Closed Position: Long NYX stock at $26.69, entry was at $27.62

Annotated 30-minute Chart:

Entry on July xx
Earnings Date 8/3/10 (unconfirmed)
Average Daily Volume: 3 million
Listed on 6/30/10


CLOSED BEARISH PLAYS

eBay, Inc - EBAY - close 19.64 change -0.03 stop 20.80 *NEW*

Target(s): 19.10 (hit), 18.40, 17.75
Key Support/Resistance Areas: 22.90, 21.50, 20.43, 20.30, 18.90, 18.39
Final Gain/Loss: +5.77%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
7/1: We are flat EBAY at $19.10 per my comments from last night. Our gain is +5.77%. I am expecting a broader market rally from here and taking profits on the weakness was the right thing to do. I believe EBAY can be shorted on bounces but how far the stock can rally from current levels is an unknown at this point. There is strong resistance up in the $20.50 to $21.50 area so you may be seeing this trade again.

6/30: It appears EBAY is headed to our first target but we may have to endure a bounce if the broader market gives us a relief rally. I want to tighten the stop to $20.80 which would be above the gap fill from 6/28 to 6/29. I doubt EBAY will trade up to this level but if it does it means the stock is strong and will limit our losses. EBAY has declined -5% since Monday's close so if the stock trades down to our $19.10 target prior to bouncing I suggest being quick to take profits.

6/29: EBAY traded below our trigger to enter short positions at $20.27 so we are short the stock. Our position is currently up almost +3%. Other than the 100-day SMA, I do not see support for EBAY until $18.90, but the stock should trend with the overall market, or possibly on news. Since conditions are oversold we may experience a bounce in EBAY. I've adjusted our first target to $19.10 which is above the next support level. If EBAY trades down there prior to bouncing I would take profits on this trade. If it bounces first and then goes lower we may be able to get more downside.

Closed Position: Short EBAY stock at 19.10, entry was at $20.27

Annotated Weekly Chart:

Entry on June 29, 2010
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 19.8 million
Listed on June 28, 2010