Editor's Note:
Sooner or later the market was going to bounce. The question is, "now what?" The market's intermediate trend is still down. This is probably just a speed bump on the way lower and the bounce may not be over yet. Wait for your entry point and then launch new bearish positions.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 30.21 change: -0.32

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 4.1%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
06/09 update: CAKE got some help with an up day in the market but shares are bouncing from support near $29 and its 200-dma. The close over $30.00 looks like a new entry point to launch bullish positions but I would keep your position size small. The market's intermediate trend is still down!

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

06/09 CAKE is bouncing from the 200-dma as expected.
06/04 More conservative traders may want to exit early. We are expecting a drop to the 200-dma.

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


Dr. Pepper Snapple Group - DPS - close: 39.91 change: +0.17

Stop Loss: 38.95
Target(s): 44.90
Current Gain/Loss: - 0.8%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
06/09 update: DPS produced a minor bounce from its 50-dma but it failed to close over the $40.00 level. The three-week trend is still down. I am not suggesting new positions at this time. We'll wait for a stronger bounce and then re-evaluate.

Current Position: Long DPS stock @ $40.25

- or -

Long Aug $45 call (DPS1120H45) Entry @ $0.30

06/04 new stop loss @ 38.95

Entry on June 3 at $40.25
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 2.1 million
Listed on May 14th, 2011


Ecolab Inc. - ECL - close: 54.39 change: +0.81

Stop Loss: 51.90
Target(s): 57.00, 59.90
Current Gain/Loss: + 1.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: ECL displayed some relative strength with a +1.5% gain. If the major indices looked healthier I would be tempted to buy ECL here. Since the market's trend is still down I'd wait for a dip near support at $53.00 before considering new positions.

Current Position: Long ECL stock @ 53.35

- or -

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

06/04 new stop loss @ 51.90

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


Rosetta Resources - ROSE - close: $47.00 change: +1.68

Stop Loss: 44.75
Target(s): 54.00
Current Gain/Loss: - 0.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: Yesterday I was about ready to give up on ROSE. Today's +3.7% rebound has alleviated some concerns but I would still hesitate to launch new positions.

-Small Bullish Positions-

Current Position: Long ROSE stock @ $47.35

- or -

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

06/08 consider an early exit!
06/04 new stop loss @ 44.75

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


BEARISH Play Updates

Aon Corp. - AON - close: 50.80 change: +0.25

Stop Loss: 52.75
Target(s): 46.50
Current Gain/Loss: + 1.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: The bounce in AON today was pretty mild. The path of least resistance appears to be lower. We can launch new positions now or wait for a new failed rally near the $51.50 or $52.00 levels. Keep in mind that the $50.00 level might offer some support but the trend is down.

Earlier Comments:
Our target is the $46.50 level. 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


AO Smith Corp. - AOS - close: 39.71 change: +0.19

Stop Loss: 42.05
Target(s): 36.00, 33.00
Current Gain/Loss: + 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: The early morning rebound in AOS failed at resistance near its 20 and 200-dma. AOS trimmed its gains and essentially erased yesterday's loss. I would still consider new bearish positions at current levels or you can wait for a drop under $39.00 as your entry point.

FYI: The Point & Figure chart for AOS is bearish with a $33 target. Traders should also note that the most recent data listed short interest at 5% of the relatively small 38.2 million share float. That does raise the risk for a possible short squeeze and explains the volatile rallies in this stock.

NOTE: AOS does have options but the spreads appear too wide for us to trade them.

Current Position: short AOS stock @ $39.92

Entry on June 6 at $39.92
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume: 312 thousand
Listed on June 4th, 2011


Ford Motor Co. - F - close: 13.80 change: +0.10

Stop Loss: 15.01
Target(s): 13.25
Current Gain/Loss: + 4.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: Ford's bounce today kept pace with the market's major indices so nothing out of the ordinary. Shares do look a little oversold here. Don't be surprised to see a multi-day oversold bounce. There is no change from my prior comments. More conservative traders may want to consider a stop somewhere in the $14.75-14.50 zone instead. The plan was to 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

06/08 new stop loss @ 15.01

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: 56.46 change: +0.39

Stop Loss: 60.15
Target(s): 54.00
Current Gain/Loss: + 2.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: The bounce in HON mirrored the move in the S&P 500. If you are looking for a new entry point consider waiting for a bounce or a failed rally near resistance at $58.00 and its 100-dma. More conservative traders may want to take profits early near $55.00. Currently our target is $54.00.

Earlier Comments:
We do want to keep our position size small to limit our risk.

- 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


Marriott Intl. Inc. - MAR - close: 34.60 change: -0.18

Stop Loss: 37.55
Target(s): 30.50
Current Gain/Loss: + 2.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/09 update: MAR underperformed the market today with another decline. Shares are starting to look a little oversold here. Readers may want to wait for a bounce or failed rally near resistance at $36.00 before initiating new positions.

The April lows near $33.50 might offer some support but we're aiming for the $30.00 area. I'll set our exit target at $30.50. FYI: The Point & Figure chart for MAR is bearish with a $25 target.

Current Position: Short MAR stock @ $35.39

- or -

Long July $33 PUT (MAR1116S33) Entry @ $0.60

Entry on June 8 at $35.39
Earnings Date 07/13/11 (unconfirmed)
Average Daily Volume: 3.7 million
Listed on June 7th, 2011


St. Jude Medical - STJ - close: 49.54 change: +0.83

Stop Loss: 51.05
Target(s): 47.00, 45.75
Current Gain/Loss: + 2.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: The rebound in STJ has left the stock above resistance at its 10-dma and above its 100-dma. This is short-term bullish but the trend is still down. We can look for overhead resistance near $51.00 and near its 50-dma.

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

06/04 New stop loss @ 51.05, added second target at $45.75
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


Target Corp. - TGT - close: 47.16 change: +0.30

Stop Loss: 50.15
Target(s): 45.15
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
06/09 update: There is no change from my prior comments. We are waiting for an oversold bounce back toward resistance. The plan is to launch bearish positions at $48.50. If triggered we'll use a stop loss at $50.15. Our first target is $45.15. FYI: The Point & Figure chart for TGT is bearish with a $43 target.

Trigger @ 48.50

Suggested Position: short TGT stock @ 48.50

- or -

buy the July $47 PUT (TGT1116S47) current ask $1.24

Entry on June x at $xx.xx
Earnings Date 08/18/11 (unconfirmed)
Average Daily Volume: 7.1 million
Listed on June 4th, 2011