Editor's Note:
The U.S. markets are sinking under support levels and marking their third daily decline in a row.

Traders should be defensive here. It looks like the S&P 500 is headed for the next level of support near 1300.

-James

Current Portfolio:


BULLISH Play Updates

Alexion Pharma - ALXN - close: 50.41 change: +0.04

Stop Loss: 47.75
Target(s): 52.25
Current Gain/Loss: unopened
Time Frame: up to its earnings report
New Positions: Yes, see trigger

Comments:
07/12 update: ALXN is still showing relative strength and managed to post a gain. Shares look a little short-term overbought. I am suggesting we launch positions on a dip at $49.00 with a stop loss at $47.75. If triggered our target is $52.25. However, we don't have much time. Earnings are expected on July 21st and we do not want to hold over the announcement. FYI: The Point & Figure chart for ALXN is bullish with a $63 target.

Trigger @ $49.00

Suggested Position: buy ALXN @ $49.00

- or -

buy the AUG $50 call (ALXN1120H50)

Entry on July xx at $ xx.xx
Earnings Date 07/21/11 (confirmed)
Average Daily Volume = 1.1 million
Listed on July 11, 2011


American Express Co. - AXP - close: 52.40 change: +0.13

Stop Loss: 50.90
Target(s): 54.95
Current Gain/Loss: unopened
Time Frame: up to its earnings report
New Positions: Yes, see trigger

Comments:
07/12 update: Positive analyst comments on AXP helped boost the stock this morning but gains faded by the close. I am adjusting our strategy. We'll use a buy-the-dip entry at $51.75 and keep our stop at $50.90. Keep in mind that this trade may not get very far. We only have about seven trading days left since we do not want to hold over the earnings report. Please note the new stop loss at $50.90.

Trigger @ 51.75

Suggested Position: buy AXP stock @ 52.00

- or -

buy the Aug. $52.50 call (AXP1120H52.5)

07/12 new trigger @ 51.75
07/11 new stop loss @ 50.90

Entry on July x at $xx.xx
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume: 7.0 million
Listed on July 2, 2011


Cheesecake Factory Inc. - CAKE - close: 32.73 change: -0.29

Stop Loss: 31.90
Target(s): 33.60, 37.00
Current Gain/Loss: + 3.8%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
07/12 update: CAKE is still consolidating and looks poised to fall toward what should be support near $32.00. More conservative traders may want to exit early now. We do not want to hold over the July 20th earnings report.

Current Position: Long CAKE stock @ $31.53

- or -

July $33 call (CAKE1116G33) Entry @ $0.75, exit 0.80 (+6.6%)

07/09 new stop loss @ 31.90
07/07 Target hit @ 33.60. CAKE +6.5%, option @ $0.80 (+6.6%)
07/05 adjusted 1st target to $33.60
07/02 new stop loss @ 30.75
06/30 consider the opportunity cost of staying in CAKE. maybe you should exit early
06/28 New stop loss @ 29.65
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 07/20/11 (confirmed)
Average Daily Volume: 1.0 million
Listed on May 19th, 2011


Dr. Pepper Snapple - DPS - close: 41.46 change: +0.20

Stop Loss: 39.90
Target(s): 46.00
Current Gain/Loss: - 0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/12 update: DPS bucked the trend today and posted a gain. I remain bullish on DPS and would still consider new positions now or near $41.00. More conservative traders may want to hesitate on new positions. Normally I would avoid holding over earnings but I am tempted to hold over DPS' late July earnings report. Our multi-week target is $46.00.

Current Position: Long DPS stock @ $41.71

- or -

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

Entry on July 11 at $41.71
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 1.8 million
Listed on June 30, 2011


Ecolab Inc. - ECL - close: 55.80 change: -0.20

Stop Loss: 53.90
Target(s): --.--, 59.90
Current Gain/Loss: + 4.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/12 update: I don't see any changes from my prior comments on ECL. The stock is slowly consolidating lower. Look for support near $55 and near $54.

Current Position: Long ECL stock @ 53.35

- or -

July $55 call (ECL1116G55) Entry @ $0.60, exit $1.45 (+141.6%)

07/09 new stop loss @ 53.90
07/08 planned exit. July $55 call @ $1.45 (+141.6%)
07/07 Plan on exiting our July calls tomorrow at the close
07/02 Sell half. ECL @ 56.76 (+6.3%), Option @ $1.75 (+191.6%)
06/30 new stop loss @ 53.45
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


Kaiser Aluminum - KALU - close: 53.11 change: +0.01

Stop Loss: 51.90
Target(s): 59.75
Current Gain/Loss: - 0.8%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
07/12 update: Traders bought the dip again in KALU but shares failed at short-term resistance near $54.00. I would still consider new positions now or you could wait for a dip closer to $52.00. We have a stop at $51.90.

Earlier Comments:
Our target is the $59.75 mark since the $60 level looks like resistance. Investors could certainly aim higher. KALU has a high amount of short interest and the stock could experience a short squeeze. We do not want to hold over the early August earnings report but the date is not yet confirmed. FYI: Investors should note that the most recent data listed short interest at 9.9% of the very small 18.5 million share float.

- Small Positions -

Current Position: Long KALU @ $53.56

- or -

Long AUG $55 call (KALU1120H55) Entry @ $1.30

Entry on July 11 at $53.56
Earnings Date 08/01/11 (unconfirmed)
Average Daily Volume = 183 thousand
Listed on July 9, 2011


KLA-Tencor - KLAC - close: 41.31 change: -0.98

Stop Loss: 39.95
Target(s): 45.75
Current Gain/Loss: - 2.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/12 update: Bearish earnings and guidance from NVLS and MCHP last night made for a tough day in the semiconductors. The SOX index plunged -2.8%. KLAC gapped open lower at $41.38 and then churned violently between $40.60 and $43. The company did raise its quarterly cash dividend by 40% from 25 cents to 35 cents. Given the sharp sell-off in chip stocks more conservative traders may want to exit our KLAC play early. I am not suggesting new positions at this time.

We do not want to hold over the late July earnings report.

Current Position: Long KLAC @ $42.49

- or -

Long AUG $45 call (KLAC1120H45) Entry @ $1.20

Entry on July 11 at $42.49
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on July 9, 2011


Macy's Inc. - M - close: 29.66 change: +0.06

Stop Loss: 28.49
Target(s): 29.90, 32.25
Current Gain/Loss: + 4.8%
2nd Position Gain/Loss: - 0.6% Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/12 update: Macy's displayed some relative strength today with a gain. Yet shares were retreating lower into the closing bell. I would still prefer to wait for a bounce near $29.00 before launching new positions.

At the moment our final target is $32.25 but we might consider adjusting this target higher.

Earlier Comments:
Our plan was to keep positions small to limit our risk.

- small positions -

Current Position: Long M stock @ $28.30

- or -

Long Aug. $30 call (M1120H30) Entry @ $0.85

- 2nd Position, entry 7/11/11 -

suggested position: Long M stock @ $29.86

Long Aug. $32 call (M1120H32) Entry @ $0.63

07/09 new stop loss @ 28.49
07/09 Add 2nd position, buy stock/calls now
07/08 Planned exit. July $29 call @ $1.50 (+167.8%)
07/07 plan on exiting July calls tomorrow at the close
07/02 new stop loss @ 27.90
07/01 1st Target Hit @ 29.90 (+5.6%), options @ +107.1% (July) & +52.9% (Aug)

Entry on June 28 at $28.30
Earnings Date 08/10/11 (unconfirmed)
Average Daily Volume: 8.6 million
Listed on June 27, 2011


UnitedHealth Group Inc. - UNH - close: 51.41 change: +0.47

Stop Loss: 49.85
Target(s): 54.75
Current Gain/Loss: + 0.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/12 update: UNH rallied off its lows this morning but the rebound struggled with short-term resistance near $52.00. This doesn't bode well. I am still expecting a dip toward support near $50.00. Keep in mind that we don't have a lot of time left. 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

07/02 new stop loss @ 49.85

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


Western Refining Inc. - WNR - close: 19.54 change: -0.02

Stop Loss: 18.45
Target(s): 24.00, 27.50
Current Gain/Loss: + 0.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/12 update: WNR tried to rebound this morning but stalled at the $20.00 level. I would still consider new positions now or you could wait for a dip near $19.00 or the simple 10-dma instead. Aggressive traders may want to put their stop under support near the $18.00 level instead.

FYI: The Point & Figure chart for WNR is bullish with a $28.50 target. Plus, the most recent data listed short interest at 38% of the 54.2 million-share float.

Current Position: Long WNR stock @ 19.50

- or -

Long AUG. $22 call (WNR1120H22) Entry @ $0.65

Entry on July 11 at $19.50
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 4.0 million
Listed on July 9, 2011


CLOSED BULLISH PLAYS

AMBEV - ABV - close: 31.69 change: -0.38

Stop Loss: 31.65
Target(s): 35.75, 37.75
Current Gain/Loss: - 4.8%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
07/12 update: The correction in ABV continues. Shares broke down to new relative lows late in the day and hit our stop loss at $31.65.

closed Position: Long ABV stock @ $33.25, exit 31.65 (-4.8%)

- or -

Aug. $34 call (ABV1120H34) entry @ 0.90, exit 0.30 (-66.6%)

07/12 stopped out @ 31.65
07/11 new stop loss @ 31.65

chart:

Entry on July 8 at $33.25
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume: 2.0 million
Listed on July 5, 2011


Interpublic Group - IPG - close: 12.33 change: -0.03

Stop Loss: 12.20
Target(s): 13.20
Current Gain/Loss: + 0.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/12 update: IPG gapped open lower at $12.23 and quickly hit our stop loss at $12.20 before rebounding off its lows. Nimble traders may want to consider buying another dip or bounce near $12.00 with a relatively tight stop loss although I would not want to hold over the earnings report.

Our plan was to keep our position size small.

- small positions -

closed Position: Long IPG stock @ $12.17, exit 12.20 (+0.25%)

- or -

Aug $12.00 call (IPG1120H12) Entry @ $0.85, exit 0.70 (-17.6%)

07/12 stopped out @ 12.20
07/09 new stop loss @ 12.20
07/02 new stop loss @ 11.49

chart:

Entry on June 29 at $12.17
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 7.5 million
Listed on June 28, 2011


Marsh & McLennan Companies - MMC - close: 30.54 change: +0.05

Stop Loss: 30.39
Target(s): 34.00
Current Gain/Loss: - 1.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/12 update: Yesterday we adjusted our stop loss from $30.45 to $30.39 hoping it would give MMC a little bit more room to move. It was not enough. The stock gapped open lower at $30.37, closing our trade.

closed Position: Long MMC stock @ $30.85, exit 30.37 (-1.5%)

- or -

Aug. $32 call (MMC1120H32) current ask $0.45, exit 0.25 (-44.4%)

07/12 stopped out on gap down at $30.37
07/11 new stop loss @ 30.39
07/09 adjusted strategy. Buy MMC now, new stop loss @ 30.45, small positions only.

chart:

Entry on July 11 at $30.85
Earnings Date 08/03/11 (unconfirmed)
Average Daily Volume: 3.4 million
Listed on July 2, 2011


CLOSED BEARISH PLAYS

St. Jude Medical - STJ - close: 46.43 change: +0.05

Stop Loss: 48.75
Target(s): 47.00, 46.10
Current Gain/Loss: + 9.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/12 update: Target achieved. STJ gapped open lower at $46.11 and then dipped to $45.97 before bouncing. Our final exit target was hit at $46.10 for a +9.6% move.

Earlier Comments:
We wanted to keep our position size small (about half or less than a normal trade) to limit our risk.

(Small Positions)

closed Position: Short STJ stock @ 51.00, exit 46.10 (+9.6%)

07/12 final target hit @ 46.10
07/09 new stop loss @ 48.75, adjust final target to $46.10
07/01 STJ has filled the gap just as expected
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