Editor's Note:
News of a debt ceiling deal wasn't enough to end the stock market's losing streak. In spite of the broad market weakness we had a few candidates showing relative strength (MPC, SD, and VNR).

-James

Current Portfolio:


BULLISH Play Updates

China Sunergy Co. Ltd. - CSUN - close: 1.54 change: -0.04

Stop Loss: 1.48
Target(s): 2.00, 2.25
Current Gain/Loss: - 7.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/01 update: There was a headline this morning that a Norway appeals court ruled in favor of CSUN in a legal dispute with REC Wafer Norway AS. The combination of the positive news and the debt ceiling deal in the U.S. helped push CSUN to a gap open at $1.65. Yet the rally immediately reversed and shares eventually gave back Friday's 4-cent bounce. This is another new lower high and CSUN looks headed for the $1.50 level again. More conservative traders may want to start thinking about an early exit! I am not suggesting new positions at this time.

Earlier Comments:
We should consider this an aggressive, higher-risk trade given the trend lower so trade small. Our first target is $2.00. I would expect some resistance at the 50-dma. Our final target is $2.25 but we do not want to hold over the earnings report in mid August.

Current Position: Long CSUN stock @ $1.67

07/27 the dip toward $1.50 looks like a new entry point.

Entry on July 25 at $ 1.67
Earnings Date 08/15/11 (unconfirmed)
Average Daily Volume = 325 thousand
Listed on July 23, 2011


EZCorp Inc. - EZPW - close: 32.87 change: -0.41

Stop Loss: 30.90
Target(s): 37.75
Current Gain/Loss: - 3.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/01 update: We were expecting a gap open higher if there was a debt deal. Sure enough EZPW opened higher. The stock gapped open at $33.93 and hit $34.19 before losing altitude. The reversal lower across the market was definitely unexpected. It looks like EZPW might retest technical support at its simple 100-dma again. Readers may want to wait for a dip near $32.00 or $31.75 before considering new bullish positions.

Current Position: Long EZPW stock @ $33.93

- or -

Long SEP $35 call (EZPW1117I35) Entry $1.45*

08/01 *entry price is an estimate. Option did not trade today

Entry on August 1 at $33.93
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 643 thousand
Listed on July 30, 2011


Marathon Petroleum Corp. - MPC - close: 44.97 change: +1.18

Stop Loss: 41.85
Target(s): 47.00, 49.75
Current Gain/Loss: - 0.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/01 update: MPC displayed relative strength today. Shares gapped open higher like most of the market. Yet instead of selling off the stock rebounded from the $44.00 level intraday and closed up +2.6% on the session. This strength is encouraging but the action in the market today is a warning signal. I would be careful when it comes to opening new positions. If we're patient we might get another entry point in MPC near 443.50 or even $42.50 later this week.

Current Position: Long MPC stock @ $45.04

- or -

Long SEP $45 call (MPC1117I45) Entry $2.00

08/01 MPC gapped open at $45.04

Entry on August 1 at $45.04
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume = 4.8 million
Listed on July 30, 2011


Sandridge Energy, Inc. - SD - close: 11.70 change: +0.18

Stop Loss: 11.20
Target(s): 13.20, 13.90
Current Gain/Loss: - 0.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/01 update: SD was also showing some relative strength. The stock gapped open at $11.93, hit $12.14 intraday and then slowly faded lower. Shares still managed to close with a +1.5% gain. While I remain bullish on SD I am growing more cautious on the market as a whole. Don't forget that we plan to exit ahead of the Aug. 4th earnings report.

Earlier Comments:
SD could see a short squeeze. The most recent data listed short interest at almost 10% of SD's 346 million-share float. We do not want to hold over the August 4th earnings report so we don't have much time. FYI: The Point & Figure chart for SD is bullish with a long-term target at $31.

Current Position: Long SD stock @ $11.78

Entry on July 25 at $11.78
Earnings Date 08/04/11 (confirmed)
Average Daily Volume = 12.1 million
Listed on July 23, 2011


Proshares Ultra Russell 2000 ETF - UWM - cls: 43.36 chg: -0.36

Stop Loss: 40.99
Target(s): 50.00
Current Gain/Loss: - 0.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/01 update: The UWM opened higher and briefly traded above $45.00 but quickly faded as the market sold off on bearish economic data. This ETF seemed to find some intraday support near $42.50 but I would hesitate to launch new positions. The market's inability to rally on the debt deal is a warning sign.

Earlier Comments:
This is an aggressive, higher-risk, speculative trade. We're betting that lawmakers will come to some sort of agreement by Monday morning. If there is a deal on Monday then the market and the UWM will likely gap open higher and rally. If there is no deal then the UWM will probably gap open down. That's why we want to keep our position size small to limit our risk.

- SMALL positions -

Suggested Position: Long UMW @ $43.72

- or -

Long AUG $45 call (UWM1120H45) Entry $2.05

07/30 stop loss @ 40.99

Entry on July 29 at $43.72
Earnings Date --/--/--
Average Daily Volume = 2.1 million
Listed on July 28, 2011


Vanguard Natural Resources - VNR - cls: 31.56 chg: +1.03

Stop Loss: 29.70
Target(s): 33.25
Current Gain/Loss: + 3.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/01 update: VNR is breaking out from its two-week consolidation pattern. Shares gapped open higher with the rest of the stock market. Yet in stead of selling off with the market shares of VNR churned sideways and eventually accelerated higher into the closing bell for a +3.3% gain. It would be tempting to buy the breakout but we're almost out of time. We are planning to exit on Aug. 3rd at the closing bell to avoid earnings on the 4th.

Please note our new stop loss at $29.70.

Current Position: Long VNR stock @ $30.61

- or -

Long AUG $30 call (VNR1120H30) Entry @ $1.20

08/01 new stop loss @ 29.70
07/30 new stop loss @ 29.40
07/30 prepare to exit on Aug. 3rd at the close.
07/19 Play is opened @ 30.61
07/18 The requirements to launch positions was not met. Try again. Both VNR and the S&P 500 need to open higher tomorrow.

Entry on July 19 at $30.61
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 193 thousand
Listed on July 16, 2011


BEARISH Play Updates

Jack Henry & Associates Inc. - JKHY - close: 28.44 change: -0.51

Stop Loss: 30.70
Target(s): 28.10, 26.25
Current Gain/Loss: + 3.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/01 update: The gap open in JKHY this morning was pretty anemic. Shares hit $29.21 and plunged to new relative lows. The stock settled with a -1.7% decline. The low today was $28.14. Our first target to take profits is the $28.10 level. I am not suggesting new positions at this time.

Earlier Comments:
Our first target to take profits is $28.10. Our secondary target is $26.25. We do not want to hold over the mid August earnings report so the secondary target is unlikely to get hit. NOTE: The option spreads are too wide to trade options on JKHY.I would keep our position size small. If lawmakers do agree on a debt ceiling deal the entire market could rally.

- small positions -

Current Position: short JKHY @ $29.39

Entry on July 27 at $29.39
Earnings Date 08/16/11 (unconfirmed)
Average Daily Volume = 427 thousand
Listed on July 26, 2011