Editor's Note:
Our plan was to exit our June options today at the closing bell since they expire after tomorrow's close. We closed our June puts in AON and STJ. I've also dropped CCMP since shares are unlikely to hit our trigger to open positions any time soon. Readers may want to take profits in Ford soon.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 29.99 change: -0.26

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 4.8%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
06/16 update: CAKE is hovering near the $30.00 level and I don't expect it to move much tomorrow. The stock will likely close near the $30 strike price thanks to Friday being options expiration. Let's wait for a bounce from $30 before considering new bullish 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

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: 40.68 change: -0.04

Stop Loss: 39.40
Target(s): 44.90
Current Gain/Loss: + 1.0%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
06/16 update: DPS bounced from its afternoon lows but it couldn't quite close above its 30-dma or 10-dma, which could act as overhead resistance. We can still buy DPS on the bounce but I'd prefer to wait for a dip or bounce closer to the $40.00 mark and its 50-dma.

Current Position: Long DPS stock @ $40.25

- or -

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

06/14 new stop loss @ 39.40
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: 54.49 change: -0.41

Stop Loss: 51.90
Target(s): 57.00, 59.90
Current Gain/Loss: + 2.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/16 update: ECL filled the gap from Tuesday and then bounced from its rising 20-dma. This intraday rebound looks like a new bullish entry point to launch positions. More conservative traders may want to raise their stops closer to the $53.00 level.

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


Nanometrics Inc. - NANO - close: 16.64 change: -0.17

Stop Loss: 15.85
Target(s): 19.25, 22.00
Current Gain/Loss: - 1.0%
Time Frame: 6 to 8 weeks or more
New Positions: see below

Comments:
06/16 update: NANO dipped to the $16.50 area and stalled. I would be tempted to buy NANO here or you can wait for a dip closer to the $16.00 level instead.

We'll start with multi-week targets at $19.25 and $22.00. FYI: NANO does have options but the spreads are so wide I wouldn't trade them.

Current Position: Long NANO stock @ $16.82

Entry on June 13 at $16.82
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume: 467 thousand
Listed on June 11th, 2011


BEARISH Play Updates

Aon Corp. - AON - close: 49.51 change: -0.61

Stop Loss: 52.05
Target(s): 46.50
Current Gain/Loss: + 4.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/16 update: AON displayed relative weakness with a -1.2% decline and a breakdown under round-number support at $50.00. Shares might see a bounce near its March lows at $49.36 but the trend is definitely down. I am lowering our stop loss to $52.05.

NOTE: It was our plan to exit our June $50 puts today at the closing bell. This option closed with a bid at $

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 -

June $50 PUT (AON1118R50) entry @ $0.45, exit $0.50 (+11.1%)

06/16 planned exit, June $50 put @ +11.1%
06/16 new stop loss @ 52.05
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: 39.22 change: +0.16

Stop Loss: 42.05
Target(s): 36.00, 33.00
Current Gain/Loss: + 1.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/16 update: AOS didn't see a lot of movement today and I wouldn't expect a lot of movement tomorrow either, not with Friday being options expiration. Readers may want to wait for a new relative low before initiating new positions.

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: 12.83 change: -0.32

Stop Loss: 13.85
Target(s): final target @ 12.55
Current Gain/Loss: +10.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/16 update: Ford continues to sink. Shares hit $12.68 intraday and closed down -2.4%. If there is any follow through lower Ford will likely hit our final target at $12.55 tomorrow. More aggressive traders may want to try and let this play run and just keep inching down your stop loss. If you try this approach you'll want a much tighter stop loss. While cautious traders may just want to exit now and book their gains. The July $15 put has a bid of $2.19 (+143%). Speaking of stops I am moving our stop down to $13.85.

I am not suggesting new positions at this time. 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

06/16 new stop loss @ 13.85
06/13 New stop loss @ 14.26. Final target at $12.55
06/13 Take Profits Now! Ford @ 13.14 (+8.75%), Option @ $1.89 (+110%)
06/11 new targets at $12.75 and TBD.
06/11 new stop loss @ 14.55
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: 56.35 change: +0.30

Stop Loss: 60.15
Target(s): 54.00
Current Gain/Loss: + 2.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/16 update: HON is drifting sideways near $56.00. I'm still bearish and would still consider new positions here. Or you could wait for a failed rally near resistance at $58.00 and the 100-dma.

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


Johnson Controls Inc. - JCI - close: 36.28 change: +0.02

Stop Loss: 38.25
Target(s): 33.75, 31.00
Current Gain/Loss: + 0.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/16 update: JCI spent Thursday's session moving sideways. The stock opened at $36.36 (our entry point) and closed virtually unchanged on the session. There are no changes from my Wednesday night comments. I am suggesting we keep our position size small to limit our risk. Our first target is $33.75. FYI: The Point & Figure chart for JCI is bearish with a $33 target.

-Small Positions Only-

Current Position: Short JCI stock @ $36.36

- or -

Long July $35 PUT (JCI1116S35) Entry @ $0.90

Entry on June 16 at $36.36
Earnings Date 07/25/11 (unconfirmed)
Average Daily Volume: 4.4 million
Listed on June 15th, 2011


Kohl's Corp. - KSS - close: 49.98 change: +0.21

Stop Loss: 51.75
Target(s): 47.50, 45.25
Current Gain/Loss: - 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/16 update: KSS is hugging the $50.00 level and will probably due the same tomorrow due to Friday being options expiration. I would still consider new positions here or you can wait for a new relative low.

The plan was to keep our position size small to limit our risk. FYI: The Point & Figure chart for KSS is bearish with a $43 target.

- Small Positions-

Current Position: short KSS stock @ $49.80

- or -

Long July $47.50 put (KSS1116S47.5) Entry @ $0.75

Entry on June 13 at $49.80
Earnings Date 08/11/11 (unconfirmed)
Average Daily Volume: 4.1 million
Listed on June 11th, 2011


Marriott Intl. Inc. - MAR - close: 33.35 change: -0.13

Stop Loss: 36.55
Target(s): 33.65, and 30.50
Current Gain/Loss: + 5.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/16 update: MAR sank to $32.95 intraday. Shares remain oversold and due for a bounce. I am not suggesting new positions at this time.

Current Position: Short MAR stock @ $35.39

- or -

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

06/13 1st Target Hit @ $33.65 (+4.9%), Option @ 0.90 (+50%)
06/13 New stop loss @ 36.55
06/11 Adjusted exit targets to $33.65 and 30.50

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


Charles Schwab - SCHW - close: 15.90 change: -0.17

Stop Loss: 17.55
Target(s): 15.25
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
06/16 update: There is no change from my prior comments on SCHW. More aggressive traders might want to consider new bearish positions now. I'm willing to wait.

I am suggesting we use a trigger to launch bearish positions at $16.75. More conservative traders could wait for a failed rally under $17.00 instead before launching positions. If triggered we'll use a stop loss at $17.55 and aim for a drop to $15.25. This could take several weeks but we do not want to hold over the mid July earnings report.

Trigger @ 16.75

Suggested Position: short SCHW stock @ $16.75

- or -

Buy the July $17.00 PUT (SCHW1116S17)

Entry on June x at $xx.xx
Earnings Date 07/18/11 (unconfirmed)
Average Daily Volume: 10.2 million
Listed on June 13th, 2011


St. Jude Medical - STJ - close: 47.98 change: +0.24

Stop Loss: 51.05
Target(s): 47.00, 45.75
Current Gain/Loss: + 5.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/16 update: Thursday proved to be a quiet session for STJ. I am not suggesting new positions at this time. Our first target to take profits is at $47.00.

It was our plan to exit the June $50 puts today (Thursday) at the closing bell. The option closed with a bid at $

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 -

June $50 PUT (SJT1118R50) Entry @ $1.00, exit $1.95 (+95%)

06/16 exit June $50 put @ $1.95 (+95%)
06/15 prepare to exit our June $50 puts on Thursday at the close
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: 46.45 change: -0.26

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

Comments:
06/16 update: TGT is not cooperating and we're still waiting on an entry point. I will likely drop TGT as a candidate in the weekend newsletter. The plan has been to use a trigger to open 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


CLOSED BEARISH PLAYS

Cabot Microelectronics - CCMP - close: 44.25 change: -2.13

Stop Loss: 50.05
Target(s): 45.15 & 200-dma
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
06/16 update: Well, it was a good idea but we apparently missed the entry point in CCMP. The oversold bounce ended sooner than expected. The stock never hit our entry point to launch bearish positions. Now the stock is accelerating lower and has already exceeded our first target. I am removing CCMP as a candidate.

Our trade never opened!

chart:

Entry on June x at $xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 141 thousand
Listed on June 14th, 2011