Editor's Note:
Good evening. Friday's employment report has the potential to be the catalyst for a continued move higher or the healthy correction we have all been waiting for. I think the latter will occur unless the number blows away expectations which certainly must be considered. There will be a lot position jockeying prior to the report. If you are not comfortable holding positions they must be closed tomorrow before the bell, otherwise you could wake up to big gap on Friday morning. Please email me with any questions/comments.

Current Portfolio:


BULLISH Play Updates

Itron, Inc - ITRI - close 61.90 change +1.04 stop 55.80

Target(s): 63.75, 65.00
Key Support/Resistance Areas: 42.00, 40.75, 39.50, 37.38, 34.70
Time Frame: 1 to 3 weeks

Comments:
10/6: ITRI was a strong performer today as the stock gained +1.71% when the broader market struggled. I think we will get the pullback and suggest using the weakness to enter long positions. I'm going to raise the trigger to $59.75 which is near Tuesday's low as I don't see ITRI trading much lower unless a broader market correction is more severe than I anticipate.

10/5: Let's remain patient and wait for the pullback in ITRI to enter long positions. I want to raise the trigger 15 cents to $59.50.

10/4: We are adding a long candidate engaged in the smart grid technology industry. This will also provide more balance in our portfolio as we currently have a firm short bias. ITRI has broken a downtrend line from its April highs and looks poised to make a run higher. The stock is consolidating above its 50-day and rising 20-day SMA's which should also provide support. ITRI has solid support near $59.00 so let's use a trigger of $59.50 (updated) to enter long positions. More nimble traders may want to consider a deeper pullback to the $58.00 area but I'm not convinced the stock will trade there prior to moving higher. If triggered our profit targets are +7% and +9.5% higher.

Suggested Position: Long ITRI stock if it trades up to $59.50

Options Traders: Buy November $60.00 CALL, current ask $1.60

Entry on October XX
Earnings 10/28/2010 (unconfirmed)
Average Daily Volume: 412,000
Listed on October 4, 2010


Logitech Intl. - LOGI - close: 17.41 change: +0.02 stop: 15.75

Target(s): 18.50, 19.50
Key Support/Resistance Areas: about every 50-cents (17.50, 17.00, 16.50)
Current Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
10/6: LOGI is consolidating near its highs and not providing much of a pullback. A retracement back towards the stock's converging moving averages is the ideal entry point. $16.60 is above the rising 20-day SMA. Let's remain patient.

10/5: The market is not following through on any dips. Buying LOGI at this level is a higher risk situation so I suggest we remain patient. Our trigger of $16.60 remains the same.

10/2: LOGI spent the better part of a year consolidating lower in a long, slow trend of lower highs and lower lows. It looks like the momentum has changed in the last couple of months. More recently LOGI has surged from $16.00 and created a new higher-high this past week. The move was fueled by short covering. LOGI has about 16% short interest. I believe there is more upside in store but we don't want to chase LOGI at current levels. Wait for a little dip and use a trigger to launch bullish positions at $16.60. We'll put the stop loss near the 50-dma. Our targets are $18.50 and $19.50. FYI: The recent rally has created a new point and figure chart buy signal with a $23 target.

Trigger to open positions @ $16.60

Suggested Position: Buy LOGI stock @ $16.60, stop $ 15.75

Entry on October xx
Earnings Date 10/27/10 (unconfirmed)
Average Daily Volume: 1.6 million
Listed on October 2nd, 2010


Noble Corp - NE - close 33.59 change -0.17 stop 32.85

Target(s): 33.88, 34.40, 34.95
Key Support/Resistance Areas: 36.95, 38.50, 33.50
Current Gain/Loss: -2.92%
Time Frame: 1 to 3 weeks
New Positions: No

Comments:
10/6: My comments below have not changed. NE is consolidating above its 50-day SMA. I suggest readers begin to look for an exit to preserve capital. The stock came with 5 cents of our first target so this has been adjusted slightly lower.

10/5: I believe there is more selling to come in NE and think the stock trades lower before going much higher. I suggest readers remain cautious. Honor stops or use bounces as opportunities to exit positions. 33.95 and 34.70 are the immediate exit targets to consider.

10/2: Ouch! NE was downgraded again. That's the second time in two days. The early morning bounce failed at its 10-dma overhead but so far traders are still buying the dip at its rising 50-dma. Short-term indicators are suggesting the stock is rolling over. I'm worried that NE is headed for $32, which would means we would get stopped out at $32.85. Since we're already looking for a market pull back I'm not suggesting new bullish positions in NE at this time.

Current Position: Long NE stock, entry was at $34.60

Entry on September 15, 2010
Earnings 10/20/10 (unconfirmed)
Average Daily Volume: 3.7 million
Listed on September 11, 2010


BEARISH Play Updates

FLIR Systems - FLIR - close 24.99 change -0.29 stop 27.55

Target(s): 24.25, 21.00
Key Support/Resistance Areas: 28.00, 27.00, 26.50, 25.50, 24.00
Current Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
10/6: FLIR underperformed again today. If FLIR can manage to bounce up towards $26.00 I like the short set-up. Let's lower the trigger to $25.90 to enter short positions. If we don't get filled in the coming days we will most likely drop the play.

10/5: FLIR was downgraded today to Outperform from Strong Buy at Raymond James and the stock was a big underperformer compared to its peers and the broader market. There is resistance at $25.50. If FLIR breaks through this level it should trade up towards our trigger of $26.20 fairly quick. More nimble traders may want to try a short trade at current levels.

10/4: The stock got hit hard today closing down -2.64%. I suggest we lower the trigger to enter short positions to $26.20 which should act as a brick wall. If we are patient the trade should pay off.

10/2: In August shares of FLIR broke down from a huge consolidation pattern. The market's widespread rally in September lifted FLIR toward resistance but the stock couldn't breakout. Now shares are under performing their peers and the major indices. Aggressive traders could launch positions now. I think we'll get a better entry point if we wait for a bounce. I'm suggesting a trigger to launch bearish positions at $26.50. If triggered we'll use a stop loss at $27.55. Our first target is $24.25. Our longer, more aggressive target is $21.00 although you may not want to hold over the earnings report! FYI: The point and figure chart is bearish with a $17 target.

Trigger to open positions @ $25.90

Suggested Position: Short FLIR stock @ $25.90, stop loss @ $27.55

Entry on October xx
Earnings Date 10/21/10 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on October 2nd, 2010


Microsoft - MSFT - close 24.43 change +0.08 stop 25.60

Target(s): 23.50, 23.10
Key Support/Resistance Areas: 25.50, 24.75, 23.75, 23.00
Time Frame: 1 to 2 weeks

Comments:
10/6: MSFT came within 10 cents of reaching our trigger to enter short positions. I continue to like the short set-up and suggest we lower the trigger to $24.50 which is just below today's highs.

10/5: Microsoft was downgraded by Goldman Sachs yesterday and Janney today from Buy to Neutral, citing limited upside in share value due to an elongated PC refresh cycle and a newer threat from tablets where windows does not have a presence. The stock has been underperforming the broader market for months and I view today's bounce as a shorting opportunity. Let's use a trigger of $24.65 to initiate short positions. Our targets are -4.5% and -6% lower than our entry.

Suggested Position: Short MSFT stock if it trades to $24.65

Options Traders: Buy November $24.00 PUT, current ask $0.81

Entry on October xx
Earnings: 10/28/10 (unconfirmed)
Average Daily Volume: 60 million
Listed on October 5, 2010


PowerShares QQQ Trust - QQQQ - close 49.23 change -0.43 stop 50.05

Target(s): 47.25
Key Support/Resistance Areas: 49.75-50.00, 47.25
Current Gain/Loss: -0.65%
Time Frame: 1 to 2 weeks
New Positions: Yes, with tight stops

Comments:
10/6: Tech stocks were a big underperformer today but we need follow through in the coming days. If we are wrong about the correction we have a tight stop to keep losses under control.

10/5: The Q's surged more than +2% higher today. Our stop is just overhead so our loss will be limited if it is hit. If we are taken out watch $50.65 as another possible shorting opportunity with a double top bearish set-up.

10/2: Over the next three months I'm actually bullish on the market and the NDX (and QQQQ). Yet short-term this tech-heavy index (ETF) is very overbought and due for a correction. Normally trying to call tops and bottoms can be very dangerous but after a week of moving sideways it looks like the upward momentum is gone. I'm suggesting small bearish positions now. We'll use a stop loss at $50.05. Our short-term target is $47.25 (near the 38.2% Fib retracement). Once the QQQQ has reached our target I would switch directions and start looking for a bullish entry point somewhere in the $47-46 zone. My time frame for this pull back is less than two weeks. Readers may want to consider trading the options instead of the ETF.

Current Position: Short QQQQ stock, entry was at $49.01
Options Traders: Long November 47.00 PUT

Entry on October 4, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 77.6 million
Listed on October 2, 2010


CLOSED BULLISH PLAYS

iPath S&P 500 VIX ST Futures - VXX - close 16.24 change -0.19 stop 16.23

Target(s): 17.55, 18.45, 19.25
Key Support/Resistance Areas: 17.50, 19.75, 20.60
Final Gain/Loss: -8.31%
Time Frame: 1 to 2 weeks
New positions: Yes

Comments:
NOTE: I view this as an aggressive trade so small position size is recommended. Long VXX is a bearish play on equities, however, it is listed as long play because we are long the underlying instrument.

10/6: We were taken of VXX by a few pennies in early trading so we are flat the position for a loss. The good news is our loss was kept under control. On Monday positions in volatility looked promising but yesterday's announcement by the BOJ put a wrinkle in the plan. Personally, I still like buying VXX at these depressed levels and selling on spikes. You just need to have your sell order placed and be prepared to closed positions.

10/4: VXX is moving in our direction as the market sold off today. I suggest picking your exit and sticking with it. My primary targets are $18.45 and $19.25. If a market correction gains momentum VXX may surge higher than these targets but tightening stops and protecting profits at these levels is suggested. 10/2: The stock market posted +10% gains in September but upward momentum has stalled. Odds of a market pull back on the back of some disappointing Q3 earnings are pretty high and thus the VXX has a lot of potential to move higher. I don't see any changes from our previous comments, although I would be tempted to aim higher and set my first target at $18.75 and my second target at $19.90.

Closed Position: Long VXX stock at $16.23, entry was at 17.70

Annotated chart:

Entry on September 14, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 21 million
Listed on September 13, 2010