Editor's Note:
Both the DIG and the SLX ETFs outperformed the major indices today.

We are updating several stop losses tonight.

-James

Current Portfolio:


BULLISH Play Updates

Auxilium Pharma - AUXL - close: 17.01 change: -0.66

Stop Loss: 16.45
Target(s): --.--, 18.45
Current Gain/Loss: +5.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/31 update: AUXL took a big chunk out of our potential profits with a -3.7% drop. The rally this morning failed at resistance near $18.00 and its 50-dma for the third day in a row! Shares paused near short-term technical support at its 10 and 30-dma this afternoon. Cautious traders may want to exit early now. The low today was $16.73. Our stop is at $16.45.

I am not suggesting new positions at this time.

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

08/30 new stop loss @ 16.45
08/29 new stop loss @ 16.25
08/27 new stop loss @ 15.75
08/27 adjusted target to $18.45.
08/25 Planned exit to sell half. AUXL @ 17.07 (+5.8%)
sold half of Sep. $17.50 call, bid @ 0.60 (+33.3%)
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: 22.56 change: +0.28

Stop Loss: 21.40
Target(s): 23.50, 24.40
Current Gain/Loss: + 2.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/31 update: AVP is still showing a little relative strength. Today's +1.2% gain left it near four-week highs. Nimble traders may want to try and buy a dip near $22.00. I am raising our stop loss to $21.40.

- small bullish positions -

Suggested Position: Long AVP stock @ $21.91

- or -

Long SEP $23 call (AVP1117I23) entry $0.50

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


Limited Brands, Inc. - LTD - close: 37.74 change: -0.57

Stop Loss: 34.49
Target(s): 39.75, 42.25
Current Gain/Loss: + 1.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/31 update: After three strong days in a row, LTD hit some profit taking today (-1.4%). Several retailers will release their August same-store sales data tomorrow. The retail sector could see some volatility. I would not be surprised to see LTD dip toward support near $36.00.

I am raising our stop loss to $35.75.

Earlier Comments:
The $38 and $41 levels might offer some overhead resistance.

Current Position: Long LTD stock @ $37.06

- or -

Long OCT $38 call (LTD1122J38) Entry $1.85*

08/29 *option did not trade. this is an estimate.

Entry on August 29 at $37.06
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 4.9 million
Listed on August 27, 2011


Peet's Coffee & Tea - PEET - close: 58.25 change: +0.23

Stop Loss: 53.25
Target(s): 62.00
Current Gain/Loss: +2.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/31 update: A late day rebound helped PEET close in positive territory. Shares had spent most of the session in a very slow slide lower. I do not see any changes from my prior comments. I am concerned that PEET will now see a short-term dip back toward $56 or $54. I would wait for a dip near $56 before considering new positions.

Earlier Comments:
There is a good chance that PEET could see another short squeeze. The most recent data listed short interest at 23.7% of the very small 12.6 million-share float. I would keep our position size small. We are not trading the options. The spreads are too wide.

Current Position: Long PEET stock @ $56.64

Entry on August 29 at $56.64
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 268 thousand
Listed on August 27, 2011


RealD Inc. - RLD - close: 14.05 change: -0.72

Stop Loss: 13.90
Target(s): 18.00
Current Gain/Loss: + 0.0%
Time Frame: 6 to 10 weeks
New Positions: see below

Comments:
08/31 update: Ouch! RLD was an underperformer on Wednesday. The stock lost -4.8% on no news. Volume was almost one-third the norm. The close under its 10-dma is short-term bearish. Shares are now testing potential support at $14.00. However, if there is any market weakness tomorrow then RLD will likely hit our stop loss at $13.90.

I am not suggesting new positions at this time.

Earlier Comments:
We want to use small positions to limit our risk.

current Position: Long RLD stock @ $14.04

- or -

Long SEP $15.00 call (RLD1117I15) Entry $0.60

08/30 new stop loss @ 13.90
08/27 new stop loss @ 13.75
08/25 planned exit to sell half at the close.
RLD +4.0%, option @ $0.90 (+50%)
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: 55.94 change: +0.73

Stop Loss: 52.40
Target(s): 54.50, 59.00
Current Gain/Loss: +11.8%
Time Frame: 2 to 6 weeks
New Positions: see below

Comments:
08/31 update: The SLX displayed relative strength with a +1.3% gain and closed at a new three-week high. I am concerned that shares are short-term overbought here. Cautious traders may want to exit early now to lock in gains. That is especially true if you have the Sep. $55 call (+138%). I am raising our stop loss to $52.40. You may want to consider a higher stop loss instead.

I am not suggesting new positions at this time.

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

Play Triggered.

Suggested Position: Long this ETF @ $50.00

- or -

Long SEP $55 call (SLX1117I55) Entry $0.90

08/31 new stop loss @ 52.40
08/30 new stop loss @ 51.75
08/29 1st target hit at $54.00.
stock position at $54.00 (+8.0%)
08/27 adjusted targets to $54.50 and $59.00
08/26 Play triggered at $50.00
08/25 new strategy: buy a dip at $50.00, new stop 49.40

Entry on August 26 at $50.00
Earnings Date --/--/--
Average Daily Volume = 126 thousand
Listed on August 23, 2011


BEARISH Play Updates

Nordic American Tanker - NAT - close: 17.95 change: -0.34

Stop Loss: 18.55
Target(s): 12.75, 10.50
Current Gain/Loss: - 5.2%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
08/31 update: Bloomberg published an article with a very bearish outlook for the shipping companies today. Meanwhile NAT underperformed the market with a -1.8% decline. If we see some follow through lower on this reversal then we might use it as a new entry point for bearish positions.

Earlier Comments:
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