Editor's Note:
The homebuilders declined for the second day in a row and our bullish trade in this space has been closed. Overall the market still looks weak but traders were probably waiting to see the May jobs numbers due out Friday morning.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 30.56 change: -0.19

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 3.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
06/02 update: CAKE is getting closer to our next entry point near the $30.00 level. Wait for a dip or a bounce from the $30 area before considering new positions.

Earlier Comments:
Keep in mind that CAKE doesn't move very fast (at least not normally) so we'll need some patience for this trade to work. FYI: The Point & Figure chart for CAKE is bullish with a $59 target.

Current Position: Long CAKE stock @ $31.53

- or -

Long the July $33 call (CAKE1116G33) Entry @ $0.75

Entry on May 20 at $31.53
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on May 19th, 2011


Capital One Financial - COF - close: 52.52 change: -0.23

Stop Loss: 51.75
Target(s): 57.00, 59.50
Current Gain/Loss: - 1.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/02 update: There is little change from my prior comments. If we don't see COF bounce soon we may want to abandon ship. The stock seems to be forming a bearish head-and-shoulders pattern with the neckline near the $52 level. I am not suggesting new positions at this time.

Current Position: Long COF stock @ $53.07

- or -

Long the June $55 calls (COF1118F55) Entry @ $0.96

05/17 New stop loss @ 51.75

Entry on May 5 at $53.07
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 3.7 million
Listed on May 4th, 2011


Corn Products Intl. - CPO - close: 56.00 change: -0.02

Stop Loss: 53.60
Target(s): 59.90
Current Gain/Loss: - 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: CPO dipped to $55.36 and bounced. If the market didn't look so vulnerable here I would be tempted to launch new positions on CPO's rebound today. Instead I would wait and see if shares trade closer to $55 or its 40-dma near $54.00 before we consider new bullish positions.

Current Position: Long CPO stock @ 56.28

- or -

Long June $55 call (CPO1118F55) Entry @ $2.10

Entry on May 27 at $56.28
Earnings Date 07/25/11 (unconfirmed)
Average Daily Volume: 688 thousand
Listed on May 26th, 2011


Dr. Pepper Snapple Group - DPS - close: 40.76 change: -0.18

Stop Loss: 37.90
Target(s): 44.90
Current Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
06/02 update: Slow and steady DPS continues to correct lower. There is no change from my prior comments. Our plan is to launch bullish positions on a dip at $40.25. If triggered we'll use a stop loss at $37.90. Our target is $44.90.

buy-the-dip Trigger @ $40.25

Suggested Position: buy DPS stock @ $40.25

- or -

Buy the August $45 call (DPS1120H45) current ask $0.80

Entry on May x at $xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 2.1 million
Listed on May 14th, 2011


Ecolab Inc. - ECL - close: 54.33 change: +0.05

Stop Loss: 50.95
Target(s): 57.00, 59.90
Current Gain/Loss: + 1.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: ECL is holding up reasonably well. I would still expect a dip toward $53.00. Wait for the dip or a bounce near this level before initiating new positions.

Current Position: Long ECL stock @ 53.35

- or -

Long July $55 call (ECL1116G55) Entry @ $0.60

Entry on May 26 at $53.35
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on May 18th, 2011


EMC Corp. - EMC - close: 28.36 change: +0.30

Stop Loss: 26.90
Target(s): 29.95, 32.25
Current Gain/Loss: + 2.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: EMC outperformed the NASDAQ with a +1.0% gain. Traders bought the dip near $28.00. I am still not suggesting new positions. EMC currently has resistance near $28.70.

Current Position: Long EMC stock @ $27.55

- or -

Long the June $27.00 calls (EMC1118F27) Entry @ $1.35

Second Option Position (listed 05/12/11)

Long the June $29.00 calls (EMC1118F29) Entry @ $0.45

06/01 new stop loss @ 26.90
05/12 New entry point. Added second option position.

Entry on May 3 at $27.55
Earnings Date 04/20/11
Average Daily Volume: 21.4 million
Listed on April 27th, 2011


Electronic Arts Inc. - ERTS - close: 24.24 change: -0.19

Stop Loss: 23.25
Target(s): 26.25, 28.00
Current Gain/Loss: - 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: ERTS gave up -0.75% on Thursday. I don't see any changes from my prior comments. Look for a dip or a bounce near $24.00 before considering new bullish positions.

I am suggesting that we keep our position size small to limit our risk. We'll start with a stop loss at $23.25. Our targets are $26.25 and $27.00.

- Small Positions -

Current Position: Long ERTS stock @ $24.44

- or -

Long July $25 call (ERTS1116G25) Entry @ $0.90

Entry on June 1 at $24.44
Earnings Date 08/02/11 (unconfirmed)
Average Daily Volume: 5.8 million
Listed on May 31st, 2011


Expedia Inc. - EXPE - close: 27.92 change: +0.12

Stop Loss: 26.70
Target(s): 27.75, 29.75
Current Gain/Loss: + 8.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: EXPE continues to churn sideways under resistance near $28.00. There is no change from my prior comments. Readers are strongly encouraged to consider taking profits right here and exiting early. I am not suggesting new positions at this time.

Current Position: Long EXPE stock @ 25.85

- or -

Long the June $25 call (EXPE1118F25) Entry @ $1.20

- or -

Long the July $27 call(EXPE1116G27) Entry @ $0.95

06/01 new stop loss @ 26.70
05/31 new stop loss @ 26.25
05/21 New stop loss @ 25.40
05/20 1st Target Hit @ 27.75 (+7.3%), June $25 call @ $2.70 (+125%), July $27 call @ $1.40 (+47.3%)

Entry on May 18 at $25.85
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 5.5 million
Listed on May 17th, 2011


Jabil Circuit Inc. - JBL - close: 20.78 change: +0.29

Stop Loss: 19.90
Target(s): 22.95, 24.75
Current Gain/Loss: - 3.0%
Time Frame: until June 21st, 2011
New Positions: see below

Comments:
06/02 update: JBL managed a bounce from its six-week trendline of higher lows. I remain cautious here and I'm not suggesting new positions at this time.

We only have a few weeks for this trade to work as JBL reports earnings on June 21st and we don't want to hold over the announcement.

- Use Small Positions -

Current Position: Long JBL stock @ $21.44

- or -

Long July $22 call (JBL1116G22) Entry @ $1.05

Entry on May 31 at $21.44
Earnings Date 06/21/11 (confirmed)
Average Daily Volume: 3.6 million
Listed on May 28th, 2011


Kansas City Southern - KSU - close: 58.03 change: +1.66

Stop Loss: 54.70
Target(s): 59.75, 62.50
Current Gain/Loss: + 2.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: Yesterday railroad stocks were big underperformers. Today they were outperforming the major indices. KSU added +2.9%. Yet in spite of this move today's gain has produced an "inside day", which is a sign of indecision. I would wait to see how stocks react to the jobs data tomorrow before considering new positions in KSU. Our upside targets are $59.75 and $62.50.

Current Position: Long KSU stock @ $56.39

- or -

Long the June $60 call (KSU1118F60) Entry @ $0.53

06/01 New stop loss @ 54.70

Entry on May 19 at $56.39
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on May 18th, 2011


Rosetta Resources - ROSE - close: $47.08 change: +0.64

Stop Loss: 43.90
Target(s): 54.00
Current Gain/Loss: - 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: ROSE dipped to its 50-dma and bounced. I remain very cautious following Wednesday's bearish engulfing candlestick. Let's wait and see how stocks react to the jobs data tomorrow before considering new positions. More conservative traders might want to up their stops closer to the $45 area.

-Small Bullish Positions-

Current Position: Long ROSE stock @ $47.35

- or -

Long July $50 call (ROSE1116G50) Entry @ $1.95

Entry on May 26 at $47.35
Earnings Date 08/08/11 (unconfirmed)
Average Daily Volume: 967 thousand
Listed on May 25th, 2011


Riverbed Technology, Inc. - RVBD - close: 37.94 change: +0.69

Stop Loss: 34.95
Target(s): 39.90, 43.00
Current Gain/Loss: + 1.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: RVBD saw a sharp rally this morning and hit a new two-month high. Unfortunately the rally failed under the $40.00 level. More conservative traders may want to consider a stop loss closer to the $36 level instead. I am not suggesting new positions at this time.

Current Position: Long RVBD stock @ $37.25

- or -

Long the June $40 call (RVBD1118F40) Entry @ $1.15

Entry on May 12 at $37.25
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 5.1 million
Listed on May 11th, 2011


DENTSPLY Intl. - XRAY - close: 38.37 change: -0.04

Stop Loss: 37.30
Target(s): 42.00, 44.50
Current Gain/Loss: - 1.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: We have been expecting a dip toward the $38.00 level and XRAY finally got there today. Aggressive traders may want to buy this late afternoon bounce. I would rather wait and see how XRAY performers after Friday and the market's reaction to the jobs data.

NOTE: Readers may want to avoid the options. XRAY doesn't have a lot of option volume and the spreads are wide, which puts traders at a disadvantage.

Current Position: Long XRAY stock @ 39.00

- or -

Long the June $40 call (XRAY1118F40) Entry @ 0.60

Entry on May 12 at $39.00
Earnings Date 07/25/11 (unconfirmed)
Average Daily Volume: 904 thousand
Listed on May 7th, 2011


BEARISH Play Updates

Aon Corp. - AON - close: 51.56 change: +0.09

Stop Loss: 52.75
Target(s): 46.50
Current Gain/Loss: + 0.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: AON is still consolidating sideways. I would wait to see how the market reacts to the economic data on Friday before launching new positions.

Earlier Comments:
Our target is the $46.50 level. I would expect some support near $50.00 and the 100-dma so don't be surprised to see an initial bounce near this area. NOTE: The option spreads on AON are a little wide. Conservative traders may not want to play the options.

(small positions only)

Current Position: short AON stock @ 51.61

- or -

Long the June $50 PUT (AON1118R50) entry @ $0.45

05/31 New stop loss @ 52.75
05/23 gap down entry @ 51.61

Entry on May 23 at $51.61
Earnings Date 07/29/11 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on May 21st, 2011


Ford Motor Co. - F - close: 14.18 change: -0.05

Stop Loss: 15.15
Target(s): 13.25
Current Gain/Loss: + 1.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: Ford sank to new two-month lows on Thursday. Shares look headed for their March lows. Currently our target is $13.25. Do not be surprised if Ford produces a short-term bounce near its March lows near $13.75. I would keep our position size small to limit our risk.

Small Positions!

Current Position: Short F stock @ $14.40

- or -

Long July $15 PUT (F1116S15) Entry @ $0.90

Entry on May 25 at $14.40
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 57 million
Listed on May 24th, 2011


Honeywell Intl. - HON - close: 57.95 change: +0.42

Stop Loss: 60.15
Target(s): 54.00 & 200-dma
Current Gain/Loss: - 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: HON did not see very much follow through on yesterday's sell-off. Shares just sat there and hovered near their 100-dma. I would keep an eye on the $59.00 and $60.00 levels. If HON bounces tomorrow we can use a failed rally at these levels as a potential entry point.

Earlier Comments:
We do want to keep our position size small to limit our risk. Our targets are $54.00 and the simple 200-dma.

- Small Positions -

Current Position: short HON stock @ 57.65

- or -

Long July $55 PUT (HON1116S55) Entry @ $0.75

Entry on June 2 at $57.65
Earnings Date 07/22/11 (unconfirmed)
Average Daily Volume: 4.1 million
Listed on June 1st, 2011


H&R Block - HRB - close: 16.15 change: -0.08

Stop Loss: 16.55
Target(s): 14.10
Current Gain/Loss: unopened
Time Frame: until June 23rd, 2011
New Positions: Yes, see trigger

Comments:
06/02 update: HRB is still drifting sideways. There is no change from my prior comments. We are waiting for a breakdown to launch positions but if HRB doesn't show some weakness soon we'll drop it.

I am suggesting a trigger to open bearish positions at $15.60, which is under last week's low. More conservative traders may want to wait for a breakdown under the rising 100-dma, which could act as possible support. If we are triggered at $15.60 our target is $14.15 near the 200-dma.

Trigger @ 15.60

Suggested Position: Short HRB stock @ $15.60

- or -

buy the July $15.00 PUT (HRB1116S15) current ask $0.65

Entry on May x at $xx.xx
Earnings Date 06/23/11 (confirmed)
Average Daily Volume: 5.8 million
Listed on May 28th, 2011


St. Jude Medical - STJ - close: 48.95 change: -0.82

Stop Loss: 52.26
Target(s): 47.00
Current Gain/Loss: + 4.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/02 update: The sell-off in STJ continues and shares are now testing technical support at their 100-dma. Do not be surprised to see a bounce from this level but the $51 area should be overhead resistance. I am not suggesting new positions at this time. We'll wait and see how STJ reacts to Friday's market headlines.

Earlier Comments:
We wanted to keep our position size small (about half or less than a normal trade) to limit our risk.

(Small Positions)

Current Position: Short STJ stock @ 51.00

- or -

Long the June $50 PUT (SJT1118R50) Entry @ $1.00

05/23 New stop loss @ 52.26

Entry on May 20 at $51.00
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 2.6 million
Listed on May 16th, 2011


CLOSED BULLISH PLAYS

Lennar Corp. - LEN - close: 18.18 change: -0.37

Stop Loss: 18.15
Target(s): 21.00
Current Gain/Loss: - 3.9%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
06/02 update: Our aggressive trade on LEN has been stopped out. The sell-off continued and shares hit our stop loss at $18.15. The breakout past resistance last week now looks like a bull trap pattern.

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

- Small Positions -

closed Position: Long LEN stock @ $18.90, Exit 18.15 (-3.9%)

- or -

July $20 call (LEN1116G20) entry @ $0.39, exit $0.25 (-35.8%)

06/02 Stopped out @ 18.15

chart:

Entry on June 1 at $18.90
Earnings Date 06/23/11 (unconfirmed)
Average Daily Volume: 3.4 million
Listed on May 31st, 2011