Editor's Note:
The major averages are correcting lower. The S&P 500 tested support near 1250 and the NASDAQ came close to hitting the 2600 level. Is this the bottom? At the moment futures are trading lower in after hours so this may not be the bottom yet. Traders will want to stay defensive, if you trade, keep your position size small.

I wouldn't be surprised to see the S&P 500 correct toward the 1225 area. This would be a normal 38.2% Fibonacci retracement of the rally from late August through February. This area (near 1225) also lines up nicely with the old highs from November 2010 and April 2010. Broken resistance typically offers some support.

The 1275 level and 1300 area is now overhead resistance and I would expect traders to sell the first bounce at these levels. If you're looking for a bearish entry point then consider waiting for the next failed rally. Otherwise, I would be waiting for that dip near the 1225 zone as our next buy the dip entry point. FYI: If you were wondering a -10% correction from the 1344 high would be 1209. We are currently at a -6.5% correction in the S&P 500.

Don't forget - March options expire after Friday.

-James

Current Portfolio:


BULLISH Play Updates

ACI Worldwide Inc. - ACIW - close: 30.61 change: +0.65

Stop Loss: 27.80
Target(s): 33.00, 34.75
Current Gain/Loss: + 3.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/16 update: Shares of ACIW were upgraded this morning, The stock reacted by gapping higher at the open and appears to have broken the short-term bearish trend of lower highs. Unfortunately if the market continues to sink ACIW will likely follow it lower. I would be hesitant to launch new bullish positions. Our bullish targets are $33.00 and $34.75.

FYI: ACIW does have options but the spreads are very wide, which puts us at a significant disadvantage.

SMALL bullish positions

Current Position: Long ACIW stock @ $29.63

Entry on February 25 at $29.63
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume: 122 thousand
Listed on February 24th, 2010


Ford Motor Co. - F - close: 14.18 change: -0.49

Stop Loss: 14.19
Target(s): 16.45, 17.45
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
03/16 update: Hmm... there was no follow through on yesterday's bullish reversal in Ford. The stock failed at $14.79 near its 20-dma. Now Ford is once again testing the $14 area and its 200-dma.

Currently our plan is to open bullish positions at $15.05. If we see Ford close under Tuesday's low ($14.20) then I'll probably drop it as a bullish candidate. Should we get triggered at $15.05 we'll use a stop at $14.19. Our targets are $16.45 and $17.45.

Trigger @ $15.05

Suggested Position: Buy F stock @ $15.05

- or -

Buy the April $15 calls (F1116D15) current ask $0.50

Entry on March x at $xx.xx
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume: 82 million
Listed on March 15th, 2010


Gildan Activewear - GIL - close: 31.09 change: +0.13

Stop Loss: 28.99
Target(s): 34.85, 38.00
Current Gain/Loss: + 2.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/16 update: Shares of GIL are still showing relative strength and posted another gain. I don't see any changes from my prior comments. I'm suggesting readers stay cautious. More conservative traders might want to raise their stops toward the $29.50 or $29.90 levels to reduce their risks. Currently our stop is at $28.99.

Current Position: long GIL stock @ 30.35

- or -

Long the April $30 call (GIL1116D30) Entry @ $1.60

03/08 Triggered $ 30.35
03/01 Adjusted buy-the-dip trigger to $30.35
03/01 Adjusted stop loss to $28.99

Entry on March 8 at $30.35
Earnings Date 05/12/11 (unconfirmed)
Average Daily Volume: 634 thousand
Listed on February 28th, 2010


Jos. A Bank Clothiers Inc. - JOSB - close: 46.46 change: -0.20

Stop Loss: 44.75
Target(s): 49.85, 52.25
Current Gain/Loss: + 1.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/16 update: JOSB spent the day in a tight range. Odds are good the stock will retest support near $45.00 again. Nimble traders could buy a dip or bounce near $45.00 but if the market continues to sink I would expect JOSB to breakdown.

FYI: The most recent data listed short interest at almost 25% of JOSB's 27.3 million-share float. There is definitely room for some short covering here. Plus, the Point & Figure chart for JOSB is bullish with a $62 target.

- Small Bullish Positions -

Current Position: Long JOSB stock @ $45.99

- or -

Long the April $50 calls (JOSB1116D50) Entry @ $0.95

Entry on March 7 at $45.99
Earnings Date 03/30/11 (unconfirmed)
Average Daily Volume: 355 thousand
Listed on March 5th, 2010


NVIDIA Corp. - NVDA - close: 17.53 change: -0.13

Stop Loss: 16.85
Target(s): 19.95, 21.75
Current Gain/Loss: - 3.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/16 update: NVDA tried to bounce this morning but the rally failed once the stock filled the gap from Tuesday morning. The action today looks bearish and reaffirms the bearish down trend. I'd probably wait for a move past today's high (at $18.35) before considering new bullish positions.

Prior Comments:
This is a very speculative, higher-risk trade. Our upside targets to take profits are at $19.95 and $21.75. Remember to keep your positions small to limit your risk.

- small bullish positions -

Current Position: long NVDA stock @ $18.19

- or -

Long the April $20 calls (NVDA1116D20) Entry @ $0.72

Entry on March 14 at $18.19
Earnings Date 05/12/11 (unconfirmed)
Average Daily Volume: 35 million
Listed on March 12th, 2010


Weyerhaeuser Co. - WY - close: 23.98 change: -0.72

Stop Loss: 22.95
Target(s): 27.25, 29.25
Current Gain/Loss: - 2.8%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
03/16 update: Ouch! WY underperformed the market today, which is not a good sign. The S&P 500 lost -1.9% but WY gave up -2.9%. Shares opened at $24.68 and closed on its low for the session, which doesn't bode well for tomorrow. I am expecting WY to test technical support at its rising 50-dma near $23.20. Wait for the dip or a bounce from this level before considering new bullish positions.

Prior Comments:
Keep your positions small to limit your risk.

Suggested Position: long WY stock @ $24.68

- or -

Long the July $25 calls (WY1116G25) Entry @ $1.64

Entry on March 16 at $24.68
Earnings Date 04/29/11 (unconfirmed)
Average Daily Volume: 6.4 million
Listed on March 15th, 2010


BEARISH Play Updates

Overseas Shipholding Group - OSG - close: 30.32 change: -1.30

Stop Loss: 34.25
Target(s): 27.75, 25.25
Current Gain/Loss: + 5.8%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
03/16 update: The sell-off in OSG is pick up speed. Today appears to be a pivotal breakdown in OSG with the stock falling under its 2011 and 2010 lows. OSG gave up -4.1% on big volume today. The $30.00 level could be round-number support so don't be surprised to see a bounce but broke support near $32 should be new resistance. Readers could add to positions here or wait for a bounce into the $31-32 zone to add to our bearish positions. I am lowering our stop loss to $33.55.

Our plan was to use small positions to limit our risk. The P&F chart is forecasting a $25 target.

- Small Bearish Positions -

Current Position: Short OSG stock @ $32.20

- or -

Long the April $30 PUTS (OSG1116P30) Entry @ $0.75

03/16 New stop loss @ 33.55

Entry on March 11 at $32.20
Earnings Date 05/04/11 (unconfirmed)
Average Daily Volume: 705 thousand
Listed on March 10th, 2010


CLOSED BULLISH PLAYS

Baxter Intl. - BAX - close: 50.22 change: -1.02

Stop Loss: 50.75
Target(s): 54.90, 57.50
Current Gain/Loss: - 2.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/16 update: BAX fell toward technical support yesterday but the sell-off continued on Wednesday. The stock gave up almost -2% with a drop toward the $50.00 mark. Our stop loss was hit at $50.75.

Prior Comments:
The plan was to keep our position size small to limit our risk.

(small positions only)

Closed Position: Long BAX stock @ 52.00, Exit @ 50.75 (-2.4%)

- or -

May $55 call (BAX1121E55) Entry @ $1.05, Exit @ 0.65 (-38%)

03/16 Stopped out. BAX -2.4%, Options @ -38%
03/14 Adjust stop back to $50.75
03/05 New stop loss @ 50.90

chart:

Entry on February 22 at $52.00
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume: 5.8 million
Listed on February 19th, 2010