Editor's Note:
Right on schedule the market's oversold bounce has stalled following the FOMC meeting. Unfortunately a upgrade for FFIV this morning pushed the stock through our stop loss.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 30.32 change: +0.28

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 4.3%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
06/22 update: I am growing more cautious on our CAKE trade. The stock's long-term trend is still up but short-term shares have lost any momentum. At the moment CAKE is still respecting the simple 200-dma as technical support. However, I'm not suggesting new positions at this time. If investors are growing worried over a double dip recession in the U.S. then consumer discretionary stocks like restaurants may not fare very well.

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: 40.44 change: -0.37

Stop Loss: 39.65
Target(s): 44.90
Current Gain/Loss: + 0.4%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
06/22 update: There is no surprise here. We have been expecting DPS to pull back and retest the 50-dma and the $40.00 level again. That could happen soon. Readers may want to wait for the bounce instead of buying the dip.

Current Position: Long DPS stock @ $40.25

- or -

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

06/21 new stop loss @ 39.65
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: 54.54 change: -0.36

Stop Loss: 52.45
Target(s): 57.00, 59.90
Current Gain/Loss: + 2.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/22 update: ECL gave back over half of yesterday's gains and short-term technicals are starting to worsen. I am not suggesting new positions at this time.

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: 16.78 change: -0.11

Stop Loss: 15.85
Target(s): 19.25, 22.00
Current Gain/Loss: - 0.2%
Time Frame: 6 to 8 weeks or more
New Positions: see below

Comments:
06/22 update: NANO saw an afternoon spike to $17.40 on takeover rumors but the rally quickly reversed. At this time I would expect another dip toward $16.00. Unfortunately another drop toward $16.00 would look like the right shoulder to a bearish head-and-shoulders pattern forming over the last three weeks. A breakdown under $16.00 would signal a drop toward the $14.50 area (but there is still technical support at the 200-dma).

I am not suggesting new positions at this time. We have a stop loss at $15.85.

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: 49.56 change: -0.65

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

Comments:
06/22 update: The oversold bounce in AON is rolling over. Today's move could be used as a new entry point but if you do launch positions now I'd use a much tighter stop loss. Speaking of stops more conservative traders may want to lower theirs. I'm keeping the newsletter stop at $52.05, above the 50-dma.

(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: 40.77 change: -0.28

Stop Loss: 42.05
Target(s): 36.00, 33.00
Current Gain/Loss: - 2.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/22 update: AOS rallied toward its early June highs near $41.50 and reversed. Aggressive traders may want to use this move as a new entry point for bearish positions. Personally, I'd rather wait for AOS to trade back under its 200-dma and the $40.00 level before initiating new positions. We have a stop loss at $42.05. More conservative traders may want to inch that down toward $41.75 or closer to $41.50ish.

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: 59.91 change: -1.56

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:
06/22 update: Bingo! ATI produced a failed rally near $62 just as expected. Aggressive traders may want to launch bearish positions now. We will keep the newsletter's strategy unchanged and keep our entry point at $57.40.

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

Suggested Position: Short ATI stock @ $57.40

- or -

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

06/22 FYI: ATI did produce an alternative entry point with a failed rally near $62.00. Aggressive traders may want to launch positions now. The newsletter will keep our trigger at $57.40.

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: 13.36 change: +0.04

Stop Loss: 13.85
Target(s): final target @ 12.55
Current Gain/Loss: + 9.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/22 update: Ford was unable to rally past resistance at $13.50 today. Volume was very light since investors were waiting for the results from the FOMC meeting and the Fed chairman's press conference. I am not suggesting new positions at this time.

More conservative traders may want to exit now to lock in a gain or lower their stops. 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: 57.01 change: -0.80

Stop Loss: 59.05
Target(s): 54.00
Current Gain/Loss: + 1.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/22 update: HON's bounce is failing at resistance near $58.00 but I wouldn't launch new positions yet. 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


Kohl's Corp. - KSS - close: 50.82 change: -0.34

Stop Loss: 51.75
Target(s): 47.50, 45.25
Current Gain/Loss: - 2.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/22 update: KSS managed to climb to $51.55 before rolling over and fading lower. This looks like a failed rally near the simple 20-dma. If you're looking for a new entry point this could work.

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: 34.37 change: +0.06

Stop Loss: 36.05
Target(s): 33.65, and 30.50
Current Gain/Loss: + 2.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/22 update: The oversold bounce in MAR is already struggling but I would not open new positions at this time. The stock should see resistance in the $35-36 area.

Current Position: Short MAR stock @ $35.39

- or -

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

06/21 readers may want to exit July options now
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: 16.08 change: -0.34

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

Comments:
06/22 update: There is no change from my prior comments. Aggressive traders may want to launch positions now (and use a stop loss just over $16.50). The newsletter's strategy is still the same with a trigger to launch bearish positions at $16.85. An alternative entry point could be a drop under $15.75.

Trigger @ 16.85

Suggested Position: short SCHW stock @ $16.85

- 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: 48.67 change: -0.95

Stop Loss: 51.05
Target(s): 47.00, 45.75
Current Gain/Loss: + 4.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/22 update: STJ has produced a failed rally and bearish reversal under resistance at $50.00. Today's move looks like a new entry point for bearish positions. I am lowering our stop loss down to $50.25. Our first target to take profits is at $47.00. Our second target is $45.75.

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


CLOSED BEARISH PLAYS

F5 Networks - FFIV - close: 104.81 change: +1.81

Stop Loss: 108.05
Target(s): 95.75, 85.50
Current Gain/Loss: - 4.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/22 update: FFIV has already hit our stop loss at $108.05. The stock was upgraded before the bell. Bears must have panicked and shares gapped open higher at $105.65 and then quickly spiked to $108.40. Our stop loss was hit before shares reversed course and pared its gains. The stock has been very volatile with a move from $96 to over $108 in three days. Our play has been closed but more aggressive traders may want to reconsider bearish positions again if FFIV trades under $102 again.

closed Position: Short FFIV stock @ 103.00, exit $108.05 (-4.9%)

- or -

July $100 PUT (FFIV1116S100) entry @ $3.30, exit $1.80 (-45.4%)

06/22 Stopped out $108.05 (-4.9%), option @ -45.4%

chart:

Entry on June 21 at $103.00
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume: 2.3 million
Listed on June 18th, 2011