Editor's Note:
As expected the market continued to drift higher. There were some significant rebounds today but financials continue to underperform.

We did not see any candidates get triggered or get stopped out today.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 30.04 change: +0.29

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 4.7%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
06/20 update: CAKE dipped to technical support at its simple 200-dma this morning and bounced. The rebound managed to erase Friday's decline. Technically this is a new entry point but I'm reluctant to launch 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

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: 40.90 change: +0.36

Stop Loss: 39.40
Target(s): 44.90
Current Gain/Loss: + 1.6%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
06/20 update: DPS produced a minor bounce from its 20-dma and closed up +0.88%. I would prefer to wait and launch new positions on a dip or bounce near $40.00 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: 54.22 change: +0.27

Stop Loss: 52.45
Target(s): 57.00, 59.90
Current Gain/Loss: + 1.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/20 update: There was no follow through on Friday's decline. Yet I would not launch new positions at this time. Should the market turn lower then ECL should find support near $53.00.

Current Position: Long ECL stock @ 53.35

- or -

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

06/18 new stop loss @ 52.45
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: 16.36 change: +0.03

Stop Loss: 15.85
Target(s): 19.25, 22.00
Current Gain/Loss: - 2.7%
Time Frame: 6 to 8 weeks or more
New Positions: see below

Comments:
06/20 update: The rebound in NANO today was not very encouraging. Shares dipped to support near $16.00 Monday morning and then barely made it back into positive territory. Technically this is another test of support and could be used as a new entry point but I'd rather see some follow through higher first.

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: 49.58 change: +0.19

Stop Loss: 52.05
Target(s): 47.00
Current Gain/Loss: + 3.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/20 update: AON saw a middy rally to $50.19 before paring its gains. While the lower high is encouraging I am not suggesting new positions at this time.

(small positions only)

Current Position: short AON stock @ 51.61

06/18 adjusted exit target to $47.00
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: 40.50 change: +0.46

Stop Loss: 42.05
Target(s): 36.00, 33.00
Current Gain/Loss: - 1.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/20 update: Hmm... our AOS trade might be at risk. Traders bought the dip again this morning near $40.00 and shares closed above their 200-dma. At this time I would anticipate a bounce toward the 50-dma or the $41.50 level.

I am not suggesting new positions at this time.

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


Allegheny Technologies - ATI - close: 60.00 change: +1.38

Stop Loss: 62.05
Target(s): 52.75, 50.50
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
06/20 update: ATI produced a strong bounce today (+2.3%) but it stalled near short-term resistance at $60.00 and its 200-ema. Aggressive traders may want to get ready to open positions on a failed rally near $62.00. Currently our plan calls for a breakdown trigger at $57.40 before entering bearish positions.

If ATI does hit our trigger at $57.40 I'm suggesting a stop loss at $62.05. Our targets are $52.75 and $50.50. We do not want to hold over the late July earnings report.

Trigger @ $57.40 (but keep watch for a failed rally near $62.00 as an alternative entry point).

Suggested Position: Short ATI stock @ $57.40

- or -

buy the July $55 PUT (ATI1116S55) current ask $1.60

Entry on June x at $xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume: 1.9 million
Listed on June 18th, 2011


Ford Motor Co. - F - close: 12.94 change: +0.17

Stop Loss: 13.85
Target(s): final target @ 12.55
Current Gain/Loss: +10.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/20 update: Once again Ford looks poised to bounce. Shares added +1.3% and almost produced a bullish engulfing candlestick pattern. There is no change from my prior comments. More conservative traders may want to exit now to lock in a gain or lower their stops.

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


F5 Networks - FFIV - close: 98.18 change: +0.98

Stop Loss: 108.05
Target(s): 95.75, 85.50
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
06/20 update: FFIV tagged a new relative low this morning before bouncing back into positive territory. We're expecting an oversold bounce back to resistance before FFIV rolls over again.

I am suggesting we launch positions at $103.00, just under technical resistance at the 50-dma. More conservative traders could wait for a bounce to $104.00 or even $105.00 as an alternative entry point. If triggered we'll use a stop loss at $108.05. Our targets are $95.75 and $85.50. However, we do not want to hold over the late July earnings report. FYI: The Point & Figure chart for FFIV is bearish with a $78 target.

Trigger @ $103.00

Suggested Position: Short FFIV stock @ 103.00

- or -

buy the July $100 PUT (FFIV1116S100)

Entry on June x at $xx.xx
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume: 2.3 million
Listed on June 18th, 2011


Honeywell Intl. - HON - close: 56.43 change: +0.58

Stop Loss: 59.05
Target(s): 54.00
Current Gain/Loss: + 2.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/20 update: The bounce in HON produced an inside day. This really doesn't tell us much except it's a sign of indecision by traders. I am not suggesting new positions at current levels. More conservative traders may want to lower their stops near the $58.00 level.

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

06/18 new stop @ 59.05

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: 37.39 change: +0.28

Stop Loss: 38.25
Target(s): 33.75, 31.00
Current Gain/Loss: - 2.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/20 update: JCI bounced again but the rebound failed to breakout past resistance at its 200-dma. If the market continues to rally it might be enough to lift JCI past $38.00, which would put our trade at risk of getting stopped out. I am not suggesting new positions tonight. We'll wait and see if this rebound rolls over. 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: 51.06 change: +0.93

Stop Loss: 51.75
Target(s): 47.50, 45.25
Current Gain/Loss: - 2.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/20 update: Relatively speaking KSS produced a pretty good bounce today (+1.8%). The close over its 10-dma and the $51.00 level is short-term bullish. We have a pretty tight stop at $51.75 so if this rebound sees any follow through we could get stopped out tomorrow.

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: 33.12 change: -0.03

Stop Loss: 36.05
Target(s): 33.65, and 30.50
Current Gain/Loss: + 6.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/20 update: MAR continues to underperform. Shares tried to bounce from the $33.00 level but eventually rolled back over into negative territory. There is no change from my weekend comments.

The stock looks oversold and due for a bounce. More conservative traders may want to just take profits now and exit completely. I suspect the oversold bounce could reach the $35 level or the 50-dma. 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

06/18 new stop loss @ 36.05
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: 16.10 change: +0.19

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

Comments:
06/20 update: SCHW is trying to rebound but it didn't make it very far. I don't see any changes from my weekend comments.

Aggressive traders may want to launch positions now or use a trigger $15.70 as an entry point for bearish positions. I am suggesting we wait for a bounce back toward overhead resistance and launch positions at $16.75 instead. 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: 49.30 change: +1.11

Stop Loss: 51.05
Target(s): 47.00, 45.75
Current Gain/Loss: + 3.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/20 update: STJ rebound today (+2.3%) stalled at its 100-dma. I would not be surprised to see STJ rally back toward the $50 level or even its 50-dma but more conservative traders may want to lower their stops closer to $50.00 to reduce your risk. I am not suggesting new positions at this time. Our first target to take profits is at $47.00.

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

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