Editor's Note:
The market has put together back to back gains and a decent sized bounce. It could be due to investor hopes that Ben Bernanke will issue positive comments and hint at more stimulus on Friday. Even if he does the market could see a sell-the-news event since we've already rallied.

I am suggesting that traders stay cautious. Readers may want to consider adjusting their stop loss placement or paring back positions by the closing bell on Thursday. The truly cautious may want to exit positions instead.

-James

Current Portfolio:


BULLISH Play Updates

Alexion Pharmaceuticals - ALXN - close: 53.51 change: +1.78

Stop Loss: 49.45
Target(s): --.--, 57.00
Current Gain/Loss: + 5.6%
Time Frame: 2 to 5 weeks
New Positions: see below

Comments:
08/24 update: I am suggesting we adjust our strategy here and take profits now. We'll sell half our position at the open tomorrow since ALXN closed on resistance. We will not sell half of our option position (although cautious traders may want to anyway).

We'll keep our final target at $57.00. Please note I am raising the stop loss to $49.45, just under yesterday's low. No new positions at this time.

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

08/24 new stop loss @ 49.45
08/24 Take profits now. Sell half at the open tomorrow. ALXN is currently up +5.6% (stock only). We'll leave our option position unchanged. Current bid is $1.40 (+0.0%)
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.

chart:

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


Auxilium Pharma - AUXL - close: 17.26 change: +0.26

Stop Loss: 14.95
Target(s): 17.95, 19.75
Current Gain/Loss: +7.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/24 update: I am growing concerned that the market could see a sell-the-news event on Friday. Therefore we are adjusting our exit strategy here. Instead of waiting for AUXL to hit $17.95 to take profits. I am suggesting we take profits tomorrow (Thursday) at the closing bell (sell half). Please note that we are raising the stop loss on $15.25 tonight. Our final target remains $19.75 but AUXL will have to chew through some resistance to get there.

I am not suggesting new positions tomorrow.

Given the market's recent volatility we do want to keep our position size small.

Current Position: Long AUXL stock @ $16.13

- or -

Long SEP $17.50 call (AUXL1117I17.5) Entry $0.45

08/24 Take profits (sell half) Tomorrow at the close
08/24 new stop loss @ 15.25
08/23 new stop loss @ 14.95.
08/23 added 2nd target at $19.75

Entry on August 22 at $16.13
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on August 20, 2011


Avon Products Inc. - AVP - close: 21.73 change: +0.37

Stop Loss: 19.95
Target(s): 23.50, 24.40
Current Gain/Loss: - 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/24 update: I am concerned about how the market might perform on Friday. Investors may want to take a more defensive posture prior to the open on Friday morning. I am not suggesting new positions at current levels.

- small bullish positions -

Suggested Position: Long AVP stock @ $21.91

- or -

Long SEP $23 call (AVP1117I23) entry $0.50

08/20 new stop loss at $19.95

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


Ultra Oil & Gas ETF - DIG - close: 40.99 change: +0.34

Stop Loss: 36.75
Target(s): 48.50
Current Gain/Loss: unopened
Time Frame: 2 to 6 weeks
New Positions: Yes, see below

Comments:
08/24 update: Our new play on DIG is not open yet. Both DIG and the S&P500 opened lower this morning before eventually posting gains. I am suggesting we try again and open small bullish positions if both DIG and the S&P500 open positive on Thursday morning. However, I want readers to keep in mind I'm cautious about the market on Friday. Investors may want to wait and see how the market performs on Friday before initiating new trades. There is always the chance that DIG will retest its recent lows near $37.00, which would be a much more attractive entry point.

There is potential short-term resistance at $44.00 but We're aiming for a rally to $48.50.

open small bullish positions if DIG & the S&P500 both open positive tomorrow.

Suggested Position: buy this ETF @ open

- or -

buy the SEP $45 call (DIG1117I45) current ask $1.45

08/24 Readers may want to wait on launching new positions until after we see the market's reaction to Bernanke's comments on Friday.

Entry on August xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 1.4 million
Listed on August 23, 2011


Giant Interactive Group Inc. - GA - close: 7.90 change: -0.04

Stop Loss: 7.55
Target(s): 9.30
Current Gain/Loss: - 6.6%
2nd position Gain/Loss: -0.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/24 update: GA did not make much progress today. Shares opened at $7.92 and then hovered sideways in the $7.99-7.86 zone all day long. I would anticipate more sideways action tomorrow as investors wait for Bernanke's comments on Friday. Readers may want to wait and see how the market performs on Friday before considering new bullish positions. Although another dip or bounce near $7.60 would look like another entry point for bullish positions.

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

- Add 2nd position - entry on 08/24/11

Second Position (small): Long GA stock @ 7.92

Long SEP $7.50 call (GA1117I7.5) Entry $0.65

08/23 new stop loss @ 7.55
08/23 adding a 2nd position
08/20 new stop loss @ 7.38

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


Sturm Ruger & Co - RGR - close: 31.09 change: +0.42

Stop Loss: 27.25
Target(s): 33.75
Current Gain/Loss: + 2.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/24 update: RGR continues to march higher. The action these last few days has been pretty dramatic. RGR still closed at another new all-time high. Even though RGR has been pretty resilient to the market's declines it is not immune and if stocks tank on Friday RGR could be a target for profit taking. I'd wait for a dip near short-term technical support at the 10-dma before considering new positions. Cautious traders may want to up their stops closer to the $28.00 level.

Current Position: Long RGR stock @ 30.25

- or -

Long SEP $30 call (RGR1117I30) Entry $1.95

08/22 RGR gaps open higher at $30.25 (entry point)

Entry on August 22 at $30.25
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 310 thousand
Listed on August 20, 2011


RealD Inc. - RLD - close: 15.19 change: +0.02

Stop Loss: 13.25
Target(s): 18.00
Current Gain/Loss: + 8.1%
Time Frame: 6 to 10 weeks
New Positions: see below

Comments:
08/24 update: RLD managed to eke out a small gain today. The stock is nearing resistance at the $16.00 level at the gap down from late July. With shares up +8% I am suggesting we start taking profits early. We'll adjust our exit strategy tonight with new plans to sell half of our position tomorrow (Thursday) at the close to avoid the headline risk on Friday with Bernanke's speech. Plus, we're raising our stop loss to $13.25 on the remainder of our position. We'll keep our final target at $18.00.

Earlier Comments:
We want to use small positions to limit our risk. NOTE: If you trade options you may want to use the November instead of Octobers but the spreads are a little wider.

current Position: Long RLD stock @ $14.04

- or -

Long SEP $15.00 call (RLD1117I15) Entry $0.60

08/24 Prepare to take profits early and sell half tomorrow at the closing bell.
08/24 new stop loss at $13.25
08/22 gap open entry at $14.04

Entry on August 22 at $14.04
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on August 20, 2011


Steel ETF - SLX - close: 52.22 change: +0.35

Stop Loss: 49.45
Target(s): 55.75, 59.75
Current Gain/Loss: unopened
Time Frame: 2 to 6 weeks
New Positions: Yes, see below

Comments:
08/24 update: Our new bullish play on the SLX is not open yet. Both the SLX and the S&P500 index ticked open lower this morning so we were not triggered. I am suggesting we try again and launch small bullish positions tomorrow but only if both the SLX and the S&P500 open positive. More aggressive traders may want to go long the SLX on a rally past $53.00 regardless for what the market is doing.

Bear in mind that I am concerned we could see a sell-the-news drop on Friday. Thus, readers may want to wait and see how the market and SLX perform on Friday before considering new positions. There is a chance the SLX retests support near $50.00 before the weekend, which would be a much more attractive entry point.

We'll use a stop loss at 49.45. Our first target is $55.75. Our second, more aggressive target is $59.75. Note, the option spreads are a little wide.

open small bullish positions if SLX & the S&P500 both open positive tomorrow.

Suggested Position: buy this ETF @ open

- or -

buy the SEP $55 call (SLX1117I55) current ask $1.40

Entry on August xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 126 thousand
Listed on August 23, 2011


BEARISH Play Updates

Nordic American Tanker - NAT - close: 17.41 change: -0.05

Stop Loss: 18.55
Target(s): 12.75, 10.50
Current Gain/Loss: - 2.1%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
08/24 update: NAT displayed some relative weakness today with a minor drop. Yet shares did see a rally towards $18.00 this morning. I suggested readers wait for a failed rally near $18.00 as our next entry point and we got it! Just remember to keep our positions small. You may want to consider using put options instead since your risk is limited to the cost of the put you purchase.

- small positions -

Current Position: short NAT stock @ $17.05

- or -

Long OCT $15 PUT (NAT1122V15) Entry $0.75*

08/24 NAT provides another entry point with failed rally at $18
08/22 gap open entry @ 17.05
* option entry is an estimate. option did not trade today

Entry on August 22 at $17.05
Earnings Date 11/07/11 (unconfirmed)
Average Daily Volume = 583 thousand
Listed on August 20, 2011


Overseas Shipholding Group - OSG - close: 15.49 change: -0.32

Stop Loss: 17.55
Target(s): 12.50, 10.25
Current Gain/Loss: + 0.1%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
08/24 update: OSG was also showing some relative weakness. Traders were selling the morning rally and the stock lost -2% by the closing bell. The $15.00 level is currently acting as short-term support. Readers may want to wait for a bigger failed rally near $16.50 or the 10-dma before considering new positions. Or you could wait for a new close under support at $15.00 as an entry point. I would keep positions very small to start.

- Small Bearish Positions -

Current Position: short OSG stock @ $15.52

- or -

Long OCT $14 PUT (OSG1122V14) Entry $1.50

08/22 gap open entry at $15.52

Entry on August 22 at $15.52
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 981 thousand
Listed on August 20, 2011