The market showed surprising resilience after the Fed failed to enact any new stimulus programs.

Editor's Note:
The markets declined after the Fed announcement then rebounded to positive territory for a few minutes before rolling over and closing near the lows of the day. It was still a surprisingly tame reaction to the Fed news.

Analysts believe investors are more concerned about what the ECB will do on Thursday and the Fed actually left a window open for an intermeeting move if the ECB disappoints.

The Fed changed its language from "monitoring and may change" to "ready to announce new policy," which analysts thought was one step closer to a new program. This is just speculation by analysts and no guarantee of any future action.

The calendar for the rest of the week has the ECB meeting on Thursday and the Nonfarm Payrolls on Friday. Either or both could dramatically move the market but it would take an abnormal increase in policy by the ECB to really spike the market. The odds are better they will disappoint.

Estimates for the payroll report are for a gain of +100,000 jobs. Anything around that number would be market neutral or even negative because it would not be bad enough for the Fed to act.

Emulex remains unopened, EZPW was triggered. HMIN was stopped.

I changed the stop losses on the stocks in yellow on the portfolio graphic.

James is on vacation this week.

Current Portfolio:


BULLISH Play Updates

Jarden Corp. - JAH - close: 45.08 change: -.17

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

Company Description

Comments
Update 8/01/12:
No move. No news. I am encouraged there was no decline. All we need now is a positive market.

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: 41.43 change: +.30

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:
8/01/12 update:
SNDK actually rallied slightly in a negative market so I expect a decent move if the market turns positive.

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: 6.24 change: -.25

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:
8/01/12 update:
FMCN finally declined after several days of creeping higher. Support at $18.35 is the next target.

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: 6.50 change: -0.18

Stop Loss: 7.15 (new)
Target(s): 6.25
Time Frame: exit prior to the Aug. 13th earnings report
New Positions: see below

Comments:
8/01/12 update: A new low on Groupon allowed me to lower the stop loss to $7.15 to avoid a sudden surprise. We are only 25 cents away from the exit 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


Hewlett Packard - HPQ - close: 17.65 change: -0.58

Stop Loss: 18.75 (new)
Target(s): 16.50
Time Frame: exit prior to the Aug. 22nd earnings report
New Positions: see below

Comments:
8/01/12 update: Finally a decent decline to a new low. I lowered the stop loss to 18.75.

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: 9.42 change: -0.10

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

Comments:
8/01/12 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: 29.34 change: -.53

Stop Loss: 30.50 (new)
Target(s): 26.00
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
8/01/12 update: No movement, no news. I lowered the stop loss to $30.50.

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: 21.86 change: -0.67

Stop Loss: 22.85 (new)
Target(s): 20.05
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description
8/01/12 update:
We finally got an entry on Ezcorp when it declined to $21.80 intraday. The sharp decline could be an omen of things to come. I lowered the stop loss to 22.85.

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: 12.71 change: +0.21

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:
8/01/12 update:
Minor rebound after a new low on Monday.

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

Home Inns & Hotels Management - HMIN - close: 18.86 change: +.60

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:
8/01/12 update: HMIN was one of the better performing stocks in today's market and it rose to hit our stop loss at $18.65 ending the play.

The first profit trigger was hit at $18.00 on July 12th for a gain of +1.60 but the second target at $15.50 remained elusive.

Position: short HMIN stock @ $19.60
First exit @ $18.00, +1.60
Second exit at $18.65, +0.95.

- or -

Long Aug $20 PUT (HMIN1218T20) Entry $1.70, bid $1.75 at stop. No options traded today.

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
Chart of HMIN

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