Sometimes expectations are overcome by reality. Fundamentals don't always matter.

Editor's Note:
Kellogs, a short play, was stopped out at the close for a breakeven. The stock had been moving up for the last four days even though the price of corn was moving up even faster. With corn prices near record highs you would think a cereal maker would be seeing some higher costs or at least investors would be expecting those higher costs. For whatever reason they are buying shares of Kellogg even in the face of record commodity prices.

We closed Harley Davidson at the open today ahead of earnings tomorrow. Immediately after the open the stock declined -1.22 for the day to close at a three day low. It failed right at resistance just over $45 but we ran out of time on the play with earnings tomorrow morning.

Emulex and EZ Corp remain unopened.

James is on vacation this week.

Current Portfolio:


BULLISH Play Updates

Jarden Corp. - JAH - close: 45.26 change: +.27

Stop Loss: 43.75 (new)
Target(s): 49.00
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Comments
Update 7/31/12: JAH gained slightly in a negative market. No news.

Our multi-week target is $49.00.

Entry @ 45.55

Entry on July 27 at $ 45.55
Earnings Date 07/24/12
Average Daily Volume = 652 thousand
Listed on July 26, 2012


Sandisk Corp. - SNDK - close: 41.11 change: -.04

Stop Loss: 38.95
Target(s): 50.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description
Comments:
07/31/12 update: SNDK failed to decline in a negative market so that is a positive sign. If the market cooperates I believe we could see $50 on SNDK over the next several weeks. That is a big "IF" given the highly volatile market today but some form of stimulus from the ECB and/or Fed could give us another ramp higher.

Trigger @ 42.75 hit 7/30/12

Suggested Position:

Long SNDK stock @ $42.75

OR

Long SNDK Sept $44 Call, @ $2.28.

Entry on July 30 at $ 42.75
Earnings Date 07/20/12 (past)
Average Daily Volume = 4.5 Million
Listed on July 28, 2012


Emulex - ELX - close: 6.46 change: +.03

Stop Loss: 5.85
Target(s): 7.25
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Back on July 5th Emulex and Broadcom settled a long running suit. Shares of ELX declined sharply on the settlement but found support at the $6.20 level. On Friday the entire chip sector was crushed at the open knocking ELX back to $5.85. However, the shares rebounded immediately to end the day flat and then continued their rebound on Monday when the majority of the Nasdaq was negative.

Emulex announced on Monday they had a new fibre channel product for Dell equipment with transfer speeds of 16Gb. That is extremely fast compared to the 3-6 Gb speeds of normal equipment. The transfer speed is important because of the massive amounts of data that current generation servers have to manage on an hourly basis.

According to IDC the total data in the storage universe will triple from 2.7 zettabytes in 2012 to more than 8 zettabytes by 2015. Moving that data around will consume more and more time so faster channel speed is critical. The new Emulax HBA devices are capable of handling over one million I/O operations per second, per port. That is up to five times faster than current technology.

I believe this announcement will insulate Emulex from further broad market declines but of course it does not make them immune.

We may hold this position over earnings on August 9th.

Trigger @ 6.65

Suggested Position: buy ELX stock @ $6.65

Entry on July xx at $ xx.xx
Earnings Date 08/09/12
Average Daily Volume = 4.5 Million
Listed on July 30, 2012


BEARISH Play Updates

Focus Media Holdings - FMCN - close: 19.80 change: +.39

Stop Loss: 20.10
Target(s): 15.25
Current Gain/Loss: - 7.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/31/12 update: FMCN is going the wrong direction with another +39 cent gain today. The stop loss is only 30 cents above the closing price so we could be out of this position on any market move higher.

Position: short FMCN stock @ $18.40

- or -

Long Aug $18 PUT (FMCN1218T18) Entry $1.50

Entry on July 17 at $18.40
Earnings Date 05/29/12
Average Daily Volume = 2.2 million
Listed on July 16, 2012


Groupon, Inc. - GRPN - close: 6.66 change: -0.24

Stop Loss: 8.25
Target(s): 6.25
Time Frame: exit prior to the Aug. 13th earnings report
New Positions: see below

Comments:
07/31/12 update: Groupon is headed in the right direction and has given back all of last week's spike. One more push in the right direction could hit our target.

The exit target is $6.25.

*Small Positions*

current Position: short GRPN stock @ $8.40

- or -

Long Aug $8.00 PUT (GRPN1218T8) Entry $0.80

07/27/12 lowered stop to $8.25.
07/18/12 readers may want to start taking some money off the table
our GRPN trade is up +15.8%
07/12/12 new stop loss @ 9.05

Entry on July 09 at $8.40
Earnings Date 08/13/12 (confirmed)
Average Daily Volume = 8.1 million
Listed on July 07, 2012


Home Inns & Hotels Management - HMIN - close: 18.26 change: +.38

Stop Loss: 18.65
Target(s): 18.00 & 15.50
Time Frame: exit prior to the Aug. 9th earnings report
New Positions: see below

Comments:
07/31/12 update: Another gain in HMIN is not a good sign. We are only 40 cents below the stop loss at 18.65. If the uptrend does not quit soon we need to exit.

I am not suggesting new positions at this time.

HMIN hit our first target at $18.00 on July 12th.
Our second target is $15.50.

Position: short HMIN stock @ $19.60

- or -

Long Aug $20 PUT (HMIN1218T20) Entry $1.70

07/27/12 new stop loss @ 18.65
07/12/12 new stop loss @ 20.25
07/12/12 1st target hit @ 18.00 (+8.2%)
1st target hit @ 18.00, option bid @ $2.50 (+47.0%)*
(option exit price is an estimate since the option did not trade at the time our first target was hit)
07/10/12 triggered @ 19.60

Entry on July 10 at $19.60
Earnings Date 08/09/12 (confirmed)
Average Daily Volume = 284 thousand
Listed on July 09, 2012


Hewlett Packard - HPQ - close: 18.24 change: -0.02

Stop Loss: 19.25
Target(s): 16.50
Time Frame: exit prior to the Aug. 22nd earnings report
New Positions: see below

Comments:
07/31/12 update: No movement, no news. Waiting on the market.

Our target is $16.50 but more aggressive traders could aim lower but the 2004 low was $16.08 so the $16.00 level could be support.

FYI: The Point & Figure chart for HPQ is bearish with a $7.00 target.

Suggested Position: short HPQ stock

- or -

Long Aug $18 PUT (HPQ1218T18) Entry $0.54

07/27/12 lowered stop loss to 19.25
07/23/12 trade opened on gap down at $18.38. Trigger was $18.40

Entry on July 23 at $18.38
Earnings Date 08/22/12 (unconfirmed)
Average Daily Volume = 18.0 million
Listed on July 21, 2012


MGM Resorts - MGM - close: 9.52 change: +0.04

Stop Loss: 9.90 (new)
Target(s): 8.10
Time Frame: exit prior to the Aug. 7th earnings report
New Positions: see below

Comments:
07/31/12 update: No movement, no news. No change.

I am not suggesting new positions.

Earlier Comments:
Looking at a weekly chart you will see significant support near $9.00. Yet 2011 saw a spike down to $7.40 and the Point & Figure chart for MGM is bearish with a $5.00 target. We are aiming for $8.10.

current Position: short MGM stock @ $9.69

- or -

Long Aug $9.00 PUT (MGM1218T9) Entry $0.27

07/23/12 triggered @ 9.69

Entry on July 23 at $9.69
Earnings Date 08/07/12 (confirmed)
Average Daily Volume = 8.9 million
Listed on July 21, 2012


Red Robin Gourmet Burgers - RRGB - close: 29.88 change: +.06

Stop Loss: 31.05
Target(s): 26.00
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/30/12 update: No movement, no news. No change in the play.

FYI: The Point & Figure chart for RRGB is bearish with a $22.00 target.

current Position: short RRGB stock @ $29.85

- or -

Long Aug $30 PUT (RRGB1218T30) Entry $1.60

Entry on July 24 at $29.85
Earnings Date 08/09/12 (unconfirmed)
Average Daily Volume = 170 thousand
Listed on July 23, 2012


EZCORP, Inc. - EZPW - close: 22.50 change: -0.02

Stop Loss: 23.10
Target(s): 20.05
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
You might think that with the U.S. economy struggling and unemployment still elevated that pawnshops would be doing strong business. Instead EZPW is struggling to meet its numbers. The company recently reported earnings and missed both the top and bottom line estimate. Furthermore management lowered their earnings guidance for 2012.

Now the stock is sitting on support at the $22.00 level. The June low was $21.91. I am suggesting a trigger to launch bearish positions at $21.80. Conservative traders can target a drop to $20.00. More aggressive traders could aim for the $18.00 level. The newsletter will plan on exiting at $20.05. FYI: The Point & Figure chart for EZPW is bearish with a long-term $10 target.

Trigger @ 21.80

Suggested Position: short EZPW stock @ (trigger)

- or -

buy the Sep $20 PUT (EZPW1222U20) current ask $0.55

Entry on July xx at $ xx.xx
Earnings Date 07/24/12
Average Daily Volume = 381 thousand
Listed on July 26, 2012


CTrip.com. - CTRP - close: 12.48 change: -0.12

Stop Loss: 14.25
Target(s): 10.25
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description
Comments:
07/31/12 update:
Closed at the lows for the day so the next decline should be to a new low.

The chart is really ugly and there is no support until $10.

Trigger @ 13.15 hit 7/30/12 @ 10:40

Position: short CTRP stock @ $13.15

- or -

Long the Dec $12 PUT @ $1.10

Entry on July 30 at $ 13.15
Earnings Date 07/24/12
Average Daily Volume = 2.8 Million
Listed on July 28, 2012


CLOSED BULLISH PLAYS

No long plays closed


CLOSED BEARISH PLAYS

Harley-Davidson - HOG - close: 43.24 change: -1.26

Stop Loss: 45.25
Target(s): 40.25
Time Frame: Closed at the open as planned
New Positions: see below

Comments:
07/31/12 update: HOG finally decided to decline but not until we had closed the play at the open. Earnings are Wednesday and evidently investors decided to take profits from last week's spike. .

Position: short HOG stock @ $43.86

- or -

Long Aug $42 PUT (HOG1218T42) Entry $1.62, exit $1.23, -.39 loss.

HOG Chart

Entry on July 16 at $43.86
Earnings Date 08/01/12 (confirmed)
Average Daily Volume = 2.2 million
Listed on July 14, 2012


Kellogg Co. - K - close: 47.72 change: +0.30

Stop Loss: 47.75 (new)
Target(s): 44.25
Time Frame: exit prior to Aug. 2nd earnings
New Positions: see below

Comments:
07/31/12 update: Kellogg spiked up at the close to hit the new stop loss at $47.75 and take us out of the play. I have no clue why a cereal manufacturer would be rising with corn prices at record highs due to the drought. The new stop loss was at a breakeven on the stock portion of the play.

current Position: short K stock @ $47.75, exit $47.75, breakeven.

- or -

Long Aug $47.50 PUT (K1218T47.5) Entry $0.85, exit 0.75, -10 cents.

07/25/12 readers may want to consider taking profits early on the August put. Current bid is $1.40
07/20/12 triggered @ 47.75
Kellogg Chart

Entry on July 20 at $47.75
Earnings Date 08/02/12 (confirmed)
Average Daily Volume = 1.6 million
Listed on July 19, 2012