Editor's Note:
Many stocks saw almost no follow through on Thursday's intraday rebound. The S&P 500 also struggled and saw its rebound off the 200-dma from Thursday roll over again. A lot of investors are watching the 1260 and 1250 levels as key support on the S&P 500. A breakdown through these levels would be very bearish.

Don't forget that we only have three weeks left on our July calls.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 30.91 change: -0.01

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 1.9%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
06/25 update: CAKE held up pretty well on Friday and closed virtually unchanged on the session while most of the market declined. Shares still have a bullish trend of higher lows but if the market accelerates lower CAKE will likely follow. Aggressive traders could launch positions now. I'd prefer to wait for another dip near support at $30.00 and the 200-dma.

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.

chart:

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


Ecolab Inc. - ECL - close: 54.42 change: -0.10

Stop Loss: 52.45
Target(s): 57.00, 59.90
Current Gain/Loss: + 2.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/25 update: Not much has changed for ECL. The stock has spent the last three weeks consolidating sideways near its highs. Traders bought the dip near its 40-dma on Thursday, which is where ECL bounced back in May. While the larger trend is up I am hesitant to launch new positions here with the market sinking.

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

chart:

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: 16.86 change: +0.04

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:
06/25 update: Friday turned out to be a quiet session for NANO. Shares traded sideways near 16.50 most of the day but saw a last minute rally into positive territory. The larger trend is still up. I would be tempted to launch positions here.

FYI: NANO does have options but the spreads are so wide I wouldn't trade them.

Current Position: Long NANO stock @ $16.82

chart:

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


UnitedHealth Group Inc. - UNH - close: 51.15 change: -0.63

Stop Loss: 48.75
Target(s): 54.75
Current Gain/Loss: - 1.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/25 update: Hmm... UNH's lack of follow through on its intraday bounce from Thursday is a bit worrisome. The weekly chart now has a potential top forming. Shares opened at $51.25 on Friday and then slowly faded back toward psychological support near $50.00. The larger trend is still bullish. I am raising our risk on this trade and moving our stop loss to $48.75, placing it under the simple 50-dma, which has been consistent support for several months. At $48.75 our risk is less than 5% for the stock position.

Alternatively you could up your stop loss to $49.95 and if you get stopped out jump back in on a dip or bounce near the 50-dma.

Considering the market's recent weakness the healthcare stocks are likely to outperform as investors look for defensive names. Unfortunately that does not mean healthcare stocks are immune to a market correction lower. If the S&P 500 breaks down under support in the 1260-1250 area I would expect UNH to correct lower as well. We do not want to hold over the July 19th earnings report.

- small positions -

Suggested Position: Long UNH stock @ $51.25

- or -

Long July $50 call (UNH1116G50) Entry @ $2.07

chart:

Entry on June 24 at $51.25
Earnings Date 07/19/11 (confirmed)
Average Daily Volume: 7.9 million
Listed on June 23, 2011


BEARISH Play Updates

Aon Corp. - AON - close: 49.12 change: -0.15

Stop Loss: 52.05
Target(s): 47.00
Current Gain/Loss: + 4.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/25 update: AON dipped to a new four-month low on Friday. If the stock does manage a bounce it should find resistance at $50.00, $51.00, $52.00. More conservative traders may want to lower their stop loss. I'm trying to keep our stop above the 50-dma for now. The simple 200-dma will probably be technical support and has risen to $46.78. At the moment our target is $47.00 but we may have to adjust it down the road to stay above the 200-dma.

Don't be surprised to see another oversold bounce back toward the $50 area. 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

chart:

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


Allegheny Technologies - ATI - close: 60.76 change: +0.85

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:
06/25 update: ATI is still consolidating sideways between resistance near $62 and support near $58. If you look hard enough shares have a neutral trend of lower highs and higher lows. However, the prevailing trend is down so I'm expecting a breakdown. Aggressive traders may want to launch positions now. I am suggesting a trigger to launch positions at $57.40. 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.

chart:

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


Eaton Corp. - ETN - close: 48.19 change: -0.66

Stop Loss: 50.75
Target(s): 42.50
Current Gain/Loss: - 1.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/25 update: ETN did not see any follow through on Thursday's big intraday bounce. Resistance at the $49.00 level held for the fourth day in a row. Aggressive traders could launch positions here. I am suggesting we wait for a breakdown under the simple 10-dma (currently $47.55) or a drop under $47.00 before initiating positions.

Current Position: short ETN stock @ $47.62

- or -

Long July $47.50 PUT (ETN1116S47.5) Entry @ $1.40

- or -

Long Aug. $45 PUT (ETN1120T45) Entry @ $1.50

chart:

Entry on June 23 at $47.62
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume: 3.8 million
Listed on June 22, 2011


Ford Motor Co. - F - close: 13.24 change: -0.23

Stop Loss: 13.85
Target(s): final target @ 12.55
Current Gain/Loss: + 8.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/25 update: Ford briefly traded above resistance near $13.50 on Friday morning but quickly reversed. I'm still suggesting readers consider locking in gains now. 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

chart:

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: -0.15

Stop Loss: 59.05
Target(s): 54.00
Current Gain/Loss: + 2.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/25 update: Good news! HON did not see any follow through on Thursday's sharp intraday bounce. The recent consolidation is starting to look like a bear-flag pattern. I am not suggesting new positions. 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

chart:

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: 49.45 change: -1.45

Stop Loss: 51.75
Target(s): 47.50, 45.25
Current Gain/Loss: + 0.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/25 update: KSS was a significant underperformer on Friday. Investors may not be that convinced that the drop in oil is going to immediately help the retailers. The stock fell to a new multi-month low. I would be tempted to launch new bearish positions here.

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

chart:

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: 33.96 change: -0.28

Stop Loss: 36.05
Target(s): 33.65, and 30.50
Current Gain/Loss: + 4.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/25 update: MAR spent Friday consolidating sideways near the $34.00 level. Shares still look like they could see an oversold bounce toward $35 or the 50-dma so I'm not suggesting new positions at this time.

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

chart:

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: 15.78 change: -0.25

Stop Loss: 16.55
Target(s): 14.00
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
06/25 update: We are adjusting our strategy on SCHW. Originally the plan was to launch bearish positions on a bounce near resistance at the 200-dma. That is unlikely to happen any time soon and financials continue to weaken.

SCHW is currently flirting with a breakdown from its $15.75-16.50 trading range. The low on Thursday was $15.66. I am suggesting a trigger to open bearish positions at $15.60. If triggered we'll use a stop loss at $16.55. Our first target is $14.00 but we do not want to hold over the mid July earnings report.

Keep our position size small!

Trigger @ 15.60 -- new trigger (small positions)

Suggested Position: short SCHW stock @ $15.60

- or -

Buy the July $15.00 PUT (SCHW1116S15)

chart:

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: 46.30 change: -1.10

Stop Loss: 50.05
Target(s): 47.00, 45.25
Current Gain/Loss: + 9.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/25 update: STJ continues to underperform. The stock saw virtually no follow through on Thursday's intraday bounce. Shares closed on their lows for Friday's session with a -2.3% decline. Now the $46.00 level and the exponential 200-dma might be support so I'm not suggesting new positoins at this time. More conservative traders may want to exit early now or lower their stop loss.

I am adjusting our final target from $45.75 to $45.25. The simple 200-dma should be support (currently at $44.80).

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

06/25 Adjusted final target to $45.25
06/23 1st target exceeded. Gap down at $46.50 (+8.8%)
06/23 new stop loss @ 50.05
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

chart:

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