Editor's Note:
Cautious comments about Europe helped send stocks spiking lower at the open this morning.

We saw BAC and NUAN hit our stop loss.

Current Portfolio:


BULLISH Play Updates

eBay Inc. - EBAY - close: 46.55 change: -0.94

Stop Loss: 44.75
Target(s): 49.75
Current Gain/Loss: + 0.6%

Entry on August 17 at $46.25
Listed on August 16, 2011
Time Frame: 4 to 6 weeks
Average Daily Volume = 12.3 million
New Positions: see below

Comments:
08/30/12 update: EBAY just erased about a week of slowly drifting higher with a -1.9% decline today. Shares look headed for short-term support near $46.00. I am not suggesting new positions at this time.

current Position: Long EBAY stock @ $46.25

- or -

Long Oct $47 call (EBAY1220J47) Entry $1.89

08/17/12 triggered at $46.25



Energy XXI Ltd. - EXXI - close: 32.79 change: -0.79

Stop Loss: 32.45
Target(s): 37.75
Current Gain/Loss: - 3.7%

Entry on August 15 at $34.05
Listed on August 11, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 968 thousand
New Positions: see below

Comments:
08/30/12 update: Believe it or not our EXXI trade is still open. The stock has been dipping toward the $32.50 level and bouncing. If there is any follow through tomorrow I suspect odds are very high that EXXI will hit our stop loss at $32.45.

I am not suggesting new positions.

current Position: Long EXXI stock @ $34.05

- or -

Long Sep $35 call (EXXI1222i35) Entry $1.45

08/15/12 triggered at $34.05



Integra Life Sciences - IART - close: 40.13 change: -0.47

Stop Loss: 39.45
Target(s): 44.50
Current Gain/Loss: - 1.2%

Entry on August 29 at $40.60
Listed on August 21, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 171 thousand
New Positions: see below

Comments:
08/30/12 update: IART gave back the majority of yesterday's gains with a pullback toward $40.00 today. If the $40.00 level fails to hold as support we could see IART quickly hit our stop loss at $39.45. FYI: The Point & Figure chart for IART is bullish with a long-term $61 target.

current Position: Long IART stock @ $40.60



CarMax - KMX - close: 30.29 change: -0.04

Stop Loss: 29.30
Target(s): 33.00
Current Gain/Loss: + 0.6%

Entry on August 30 at $30.10
Listed on August 29, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.2 million
New Positions: Yes, see below

Comments:
08/30/12 update: The gap down at the open today played into our favor. We wanted to launch new bullish positions at the open. KMX opened lower near prior resistance and what should be new support at $30.00 before bouncing.

Nimble traders can look for another dip near $30.00 as an entry point.

current Position: Long KMX stock @ $30.10

- (or for more adventurous traders, try this option) -

Long Sep $30 call (KMX1222i30) entry $1.08

08/30/12 trade opened on gap down at $30.10



PulteGroup - PHM - close: 13.35 change: -0.05

Stop Loss: 12.65
Target(s): 13.90
Current Gain/Loss: + 8.6%
Time Frame: 6 to 8 weeks

Entry on August 09 at $12.29
Listed on August 8, 2011
Average Daily Volume = 14.5 million New Positions: see below

Comments:
08/30/12 update: PHM recovered from its morning dip. Shares essentially ignored most of the market's weakness today. The stock is coiling in a neutral pattern of short-term lower highs and higher lows.

Readers may want to exit early now!

Our exit target is $13.90. I am not suggesting new positions.

Current Position: Long PHM stock @ $12.29

- or -

Long Oct $13 call (PHM1220j13) Entry $0.70

08/29/12 new stop loss @ 12.65
08/25/12 adjust exit target to $13.90
08/20/12 new stop loss @ 12.45
08/18/12 new stop loss @ 11.95
08/17/12 PHM stalls/reverses at resistance near $14.00
08/09/12 new stop loss @ 11.80
08/09/12 triggered on gap higher at $12.29. Trigger was $12.25.



Theravance Inc. - THRX - close: 27.10 change: +0.07

Stop Loss: 25.90
Target(s): 31.00
Current Gain/Loss: - 2.0%

Entry on August 24 at $ 27.65
Listed on August 23, 2011
Time Frame: 4 to 8 weeks
Average Daily Volume = 492 thousand
New Positions: see below

Comments:
08/30/12 update: THRX displayed some relative strength with a minor gain. The stock has found new short-term support near $26.50. More conservative traders may want to inch up their stops closer to this level. Currently the newsletter's stop is at $25.90.

I am not suggesting new positions at this time.

Earlier Comments:
THRX is a biotech firm and the stock could see a short squeeze. The most recent data listed short interest at 22% of the 52.6 million-share float. We do want to keep our position size small.

*small positions*

current Position: Long THRX stock @ $27.65

- (or for more adventurous traders, try this option) -

Long Oct $30 call (THRX1220j30) entry $1.55



Tempur Pedic Intl. - TPX - close: 31.28 change: -1.42

Stop Loss: 30.90
Target(s): 39.00
Current Gain/Loss: - 3.8%
Time Frame: 6 to 8 weeks

Entry on August 16 at $32.50
Listed on August 7, 2011
Average Daily Volume = 2.5 million New Positions: see below

Comments:
08/30/12 update: Ouch! TPX underperformed the market with a -4.3% decline today. Shares are nearing short-term support at $31.00. If there is any follow through lower this stock will likely hit our stop loss at $30.90. I am not suggesting new positions at this time.

Earlier Comments:
I do consider this somewhat of an aggressive trade so we will want to limit the size of our position. Our multi-week target is $39.00 since the $40.00 level is probably round-number resistance.

(small positions)

current Position: Long TPX stock @ $32.50

- or -

Long Sep $33 call (TPX1222I33) Entry $1.75

08/29/12 new stop loss @ 30.90
08/16/12 triggered @ 32.50



BEARISH Play Updates

Cabot Corp. - CBT - close: 34.66 change: -0.36

Stop Loss: 35.85
Target(s): 31.50
Current Gain/Loss: + 0.5%

Entry on August 29 at $34.85
Listed on August 28, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 338 thousand
New Positions: see below

Comments:
08/30/12 update: CBT fell to a new relative low and closed under support at $35.00. This could be the entry point you're looking for!

Our multi-week target is $31.50. The Point & Figure chart for CBT is bearish with a $25.00 target.

FYI: CBT will begin trading ex-dividend on August 29th. The quarterly cash dividend should be 20 cents so we can expect CBT to gap down at the open on August 29th by 20 cents.

current Position: short CBT stock @ $34.85

- (or for more adventurous traders, try this option) -

Long Oct $35 PUT (CBT1220v35) entry $2.05



Dolby Labs - DLB - close: 33.01 change: -0.74

Stop Loss: 35.11
Target(s): 30.15
Current Gain/Loss: + 1.8%

Entry on August 24 at $33.60
Listed on August 23, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 992 thousand
New Positions: see below

Comments:
08/30/12 update: DLB underperformed the market with a -2.1% decline. The stock closed at new three and a half week lows. More conservative traders might want to start adjusting their stop loss lower.

*Small Positions*

current Position: short DLB stock @ $33.60

- (or for more adventurous traders, try this option) -

Long Sep $35 PUT (DLB1222u35) Entry $1.90



Navistar Intl. - NAV - close: 21.47 change: -1.03

Stop Loss: 24.05
Target(s): 20.25
Current Gain/Loss: +7.5%

Entry on August 28 at $ 23.22
Listed on August 25, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.7 million
New Positions: see below

Comments:
08/30/12 update: Shares of NAV are accelerating lower with a -4.5% decline today. More conservative traders may want to start taking money off the table now. Currently we are aiming for $20.25.

I am adjusting our stop loss down to $24.05. You may want to tighten yours even lower.

Suggested Position: short NAV stock @ $23.22

- (or for more adventurous traders, try this option) -

Long Sep $20 PUT (NAV1222u20) Entry $0.70

08/30/12 new stop loss @ 24.05
08/28/12 trade opens with NAV at $23.22
08/27/12 NAV gaps open above our stop loss, effectively negating our trade. We are reloading and trying again. Launch positions at the open tomorrow



Strayer Education - STRA - close: 64.68 change: -0.20

Stop Loss: 67.75
Target(s): 61.50
Current Gain/Loss: + 4.2%

Entry on August 23 at $67.50
Listed on August 22, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 294 thousand
New Positions: see below

Comments:
08/30/12 update: Hmm... has STRA found support? The stock market spiked lower at the open but STRA failed to hit new relative lows. Shares spent the day inside the $64-65 range.

The larger trend is still down. We will adjust our stop loss to $67.75. I am not suggesting new positions at this time.

Earlier Comments:
Part of our challenge is that the for-profit education stocks have been bearish for a while. The most recent data listed short interest in STRA at 41% of the very small 11 million share float. That raises our risk of a short squeeze. Given this risk I'd rather buy put options but the options spreads are too wide to trade. We'll try and limit our risk by keeping our position size small.

*Small Positions Only!*

current Position: short STRA stock @ $67.50

08/30/12 new stop loss @ 67.75
08/27/12 new stop loss @ 68.65
08/25/12 new stop loss @ 70.25



Tesco Corp. - TESO - close: 9.96 change: -0.15

Stop Loss: 10.55
Target(s): 8.15
Current Gain/Loss: - 2.0%

Entry on August 28 at $9.76
Listed on August 27, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 304 thousand
New Positions: see below

Comments:
08/30/12 update: TESO erased nearly all of yesterday's gains. The stock is back under the $10.00 mark although not by much. I am not suggesting new positions.

current Position: short TESO stock @ $9.76



TIM Participacoes S.A. - TSU - close: 18.78 change: -0.08

Stop Loss: 20.55
Target(s): 17.50
Current Gain/Loss: + 5.2%

Entry on August 22 at $19.80
Listed on August 21, 2011
Time Frame: 4 to 6 weeks
Average Daily Volume = 2.3 million
New Positions: see below

Comments:
08/30/12 update: TSU spent most of the day churning sideways. It did post a new closing lower but failed to hit a new intraday low in spite of the market's weakness this morning. That might be a warning sign for the bears. I am not suggesting new positions.

current Position: short TSU stock @ $19.80 (Small Positions)

08/27/12 new stop loss @ 20.55
08/22/12 triggered @ 19.80



CLOSED BULLISH PLAYS

Bank of America - BAC - close: 7.91 change: -0.09

Stop Loss: 7.90
Target(s): 9.25 or 9.75
Current Gain/Loss: - 4.2%

Entry on August 21 at $8.25
Listed on August 20, 2011
Time Frame: 6 to 9 weeks
Average Daily Volume = 103 million
New Positions: see below

Comments:
08/30/12 update: Cautious comments about Europe and the future of the Eurozone helped spark a sell-off across the market and financials didn't hold up very well. BAC spiked down and quickly hit our stop loss at $7.90.

The plan was to use small positions to limit our risk.

closed Position: Long BAC stock @ $8.25 exit $7.90 (-4.2%)

- or -

2013 Jan $9.00 call (BAC1319a9) Entry $0.47 exit $0.34 (-27.6%)

08/30/12 stopped out at $7.90
08/21/12 triggered @ 8.25

chart:



Nuance Comm. - NUAN - close: 23.56 change: -0.49

Stop Loss: 23.40
Target(s): 28.00
Current Gain/Loss: - 4.5%

Entry on August 21 at $24.50
Listed on August 18, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.1 million
New Positions: see below

Comments:
08/30/12 update: We have been concerned with NUAN for days. Today's market-wide spike lower at the open this morning was enough to push NUAN out of its recent trading range. Our stop was hit at $23.40.

closed Position: Long NUAN stock @ $24.50 exit $23.40 (-4.5%)

- (or for more adventurous traders, try this option) -

Oct $25 call (NUAN1220j25) Entry $1.30* exit $0.65**(-50.0%)

**option exit price is an estimate. the option did not trade at the time our play was stopped out.
08/30/12 stopped out at $23.40
08/25/12 new stop loss @ 23.40
08/21/12 triggered @ 24.50
*option entry price is an estimate. it did not trade at the time our play was opened.

chart: