Editor's Note:
Most of our bullish candidates held up reasonably well and suffered smaller declines than the market's major indices.

HON was stopped out.

I am removing our entry point on PCAR until the weekend.

-James

Current Portfolio:


BULLISH Play Updates

Alexion Pharmaceuticals - ALXN - close: 50.31 change: -1.43

Stop Loss: 47.90
Target(s): 54.00, 57.00
Current Gain/Loss: - 0.7%
Time Frame: 2 to 5 weeks
New Positions: see below

Comments:
08/18 update: ALXN is holding up reasonably well. The NASDAQ lost -5.2% while ALXN only gave up -2.7%. Shares were holding near support at the $50.00 level most of the session. If the market's major indices open positive tomorrow then we can use this dip in ALXN as a new entry point. Otherwise I would wait for the S&P500 and NASDAQ to retest their lows from last week before considering new positions here.

Our plan was to keep our position size small to limit our risk.

Current Position: ALXN stock @ $50.67

- or -

Long SEP $55 call (ALXN1117I55) Entry $1.40

08/15 new stop loss @ 47.90
08/12 trade is open.
08/11 open positions if ALXN and S&P500 are positive Friday morning
08/09 new entry point strategy, new stop loss, new targets.

Entry on August 12 at $50.67
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on August 8, 2011


Apollo Group Inc. - APOL - close: 45.31 change: -1.47

Stop Loss: 44.70
Target(s): 53.00
Current Gain/Loss: - 3.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/18 update: APOL was not immune to the market sell-off today but shares only lost -3.1% versus -5.2% in the NASDAQ. Traders were buying dips in APOL near the $45.00 level all day long. If the market's major indices open positive tomorrow then we can use this dip in APOL as a new entry point. Otherwise I would wait for the S&P500 and NASDAQ to retest their lows from last week before considering new positions here.

Don't forget we did raise the stop loss to $44.70 yesterday.

Suggested Position: Long APOL stock @ $47.00

- or -

Long SEP $50 call (APOL1117I50) Entry $1.32

08/17 new stop loss @ 44.70

Entry on August 17 at $47.00
Earnings Date 10/12/11 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on August 16, 2011


Avon Products Inc. - AVP - close: 20.96 change: -0.78

Stop Loss: 20.20
Target(s): 23.50, 24.40
Current Gain/Loss: - 4.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/18 update: AVP gapped open lower at $21.16 and eventually closed with a -3.5% decline. Selling slowed after the first hour and shares spent most of the day consolidating sideways. Last week's lows were in the $20.30 region. I would use a dip near $20.30 as a new entry point to buy AVP or calls on the stock.

- small bullish positions -

Suggested Position: Long AVP stock @ $21.91

- or -

Long SEP $23 call (AVP1117I23) entry $0.50

Entry on August 17 at $21.91
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 5.1 million
Listed on August 15, 2011


Carpenter Technology - CRS - close: 44.32 change: -3.21

Stop Loss: 43.45 (stock only)
Target(s): 51.50, 56.50
Current Gain/Loss: - 3.6%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/18 update: Ouch! Today's -6.75% decline took our CRS trade from a gain to a loss. The stock gapped open lower near $46 and then dropped toward last week's lows near 444.00. The intraday low this afternoon was $43.81. This should be support and we have a stop loss at $43.45. If the S&P500 opens positive tomorrow I would use today's dip in CRS as a new entry point to start bullish positions. Any further declines will likely stop us out.

Earlier Comments:
We do want to keep our position size small to limit our risk.

Current Position: Long CRS stock @ $46.01

08/15 exit Aug. $50 call now, bid $0.75 (+15.3%)
08/13 consider an early exit on the Aug. call
08/11 *entry is an estimate. option did not trade today.

Entry on August 11 at $46.01
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 622 thousand
Listed on August 9, 2011


Giant Interactive Group Inc. - GA - close: 7.80 change: -0.17

Stop Loss: 7.20
Target(s): 9.30
Current Gain/Loss: - 7.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/18 update: It was a relatively quiet day for GA. Shares gapped open lower at $7.86. The intraday rally failed midday and shares closed with a loss of -2.1% compared to -5.2% in the NASDAQ or -4.4% in the S&P500.

If the market's major indices open positive tomorrow then we can use this dip in GA as a new entry point. Otherwise I would wait for the S&P500 and NASDAQ to retest their lows from last week before considering new positions here.

More conservative traders may want to consider a higher stop loss!

Earlier Comments:
Readers should consider this a higher-risk, more aggressive trade. We want to keep our position size small to limit our risk.

Current Position: Long GA stock @ $8.46

- or -

Long SEP $7.50 call (GA1117I7.5) Entry $0.95

Entry on August 15 at $ 8.46
Earnings Date 11/16/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on August 13, 2011


PACCAR Inc. - PCAR - close: 34.88 change: -2.38

Stop Loss: 35.85
Target(s): 39.90, 43.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/18 update: Our new trade in PCAR is not open yet. Both the S&P500 and PCAR opened lower today. Shares have fallen toward last week's lows and what "should" be support near $35.00. Aggressive traders could use this dip as a new entry point and just adjust your stop (maybe in the $34.40 area).

I am suggest we temporarily remove our entry point on PCAR. Odds just shot up significantly that the major indices will retest their lows from last week. If that happens and PCAR is already at last week's lows then we could see PCAR breakdown further. I would watch for the next level of support near the January 2010 lows around $33.50.

In summary, we'll remove our entry point strategy on PCAR for tomorrow and re-evaluate on Friday night.

Entry Point Removed. Just Wait and Watch Tomorrow.

Entry on August xx at $ xx.xx
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 5.6 million
Listed on August 17, 2011


BEARISH Play Updates

None. No bearish plays currently.


CLOSED BULLISH PLAYS

Honeywell Intl. - HON - close: 42.76 change: -3.23

Stop Loss: 44.40 (stock only)
Target(s): 49.75, 53.50
Current Gain/Loss: - 5.7%
Time Frame: 2 to 6 weeks
New Positions: see below

Comments:
08/18 update: Thursday proved to be an ugly, ugly day for HON. If the widespread market weakness was not bad enough shares of HON were downgraded this morning. The stock gapped open lower at $44.45 and quickly plunged to its low of the day at $42.13. Our stop loss was hit at $44.40 (-5.7%).

We did not have a stop on the option position but I'm suggesting an early exit there as well. More aggressive traders may want to hang on to their September options since we have four weeks before they expire and HON could easily rebound. My biggest concern is the stock's breakdown to new relative lows on huge volume! That's not a good signal.

Earlier Comments:
We want to keep our position size pretty small to limit our risk. We're not using a stop loss on our option positions.

closed Position: Long HON stock @ $47.10, exit 44.40 (-5.7%)

- or -

SEP $50 call (HON1117I50) Entry $0.95, exit $0.20 (-78.9%)

08/18 stock position stopped out @ 44.40
08/18 option, suggested an early exit. bid @ 0.20

chart:

Entry on August 15 at $47.10
Earnings Date 10/21/11 (unconfirmed)
Average Daily Volume = 7.8 million
Listed on August 13, 2011