Editor's Note:
The stock market's decline on Friday triggered a couple of our bearish trades. NAV and TRMB are now open. BRLI and CFX were stopped out.

Current Portfolio:


BULLISH Play Updates

American Intl. Group - AIG - close: 35.70 change: -1.51

Stop Loss: 34.85
Target(s): 39.75
Current Gain/Loss: - 0.8%

Entry on October 9 at $36.00
Listed on October 8, 2012
Time Frame: exit prior to earnings on Nov. 1st
Average Daily Volume = 44 million
New Positions: see below

Comments:
10/20/12: Ouch! After a week of gains AIG almost all of them back with a sharp -4.0% decline on Friday. I didn't see any company specific news to account for this relative weakness. Yet the rally higher and sharp reversal definitely looks like a potential bearish reversal on both the daily and weekly charts. Broken resistance near $35.00 could still offer support but I am definitely not suggesting new bullish positions.

Our target is $39.75 but we'll plan on exiting prior to the early November earnings report. FYI: The Point & Figure chart for AIG is bullish with a $42.50 target.

Current Position: Long AIG stock @ $36.00

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

Long Nov $37 call (AIG1211k37) entry $0.76

10/18/12 new stop loss @ 34.85
10/15/12 new stop loss @ 34.45

chart:



AOL Inc. - AOL - close: 36.27 change: -0.09

Stop Loss: 35.49
Target(s): 39.90
Current Gain/Loss: -2.6%

Entry on October 16 at $37.23
Listed on October 15, 2012
Time Frame: exit prior to the NOV 6th earnings report
Average Daily Volume = 1.6 million
New Positions: see below

Comments:
10/20/12: Is the short-term reversal in AOL over? I've been warning readers to look for a dip toward $36.00. The stock actually fell to $35.73 on Friday and pierced its 20-dma before bouncing. The action this past week looks like a failed rally at $38.00. I am not suggesting new positions. Readers may want to raise their stops toward Friday's low.

Suggested Position: buy AOL stock @ $37.23

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

Long NOV $38 call (AOL1217k38) entry $1.10

10/20/12 readers may want to raise their stops toward Friday's low (35.73)

chart:



Bank of America - BAC - close: 9.44 change: -0.03

Stop Loss: 9.25
Target(s): 10.45
Current Gain/Loss: unopened

Entry on October xx at $ xx.xx
Listed on October 18, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 141 million
New Positions: Yes, see below

Comments:
10/20/12: The consolidation in BAC is narrowing. That would suggest the stock will see a breakout one way or the other pretty soon. BAC has a bullish bias to its pennant-shaped consolidation pattern. This past week has found resistance at $9.60.

I am suggesting a trigger to launch bullish positions at $9.65 with a stop loss at $9.25. Our multi-week target is $10.45.

Trigger @ 9.65

Suggested Position: buy BAC stock @ (trigger)

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

buy the 2013 Jan $10 call (BAC1319a10)

chart:



DreamWorks Animation - DWA - close: 20.78 change: -0.80

Stop Loss: 19.75
Target(s): 22.00
Current Gain/Loss: +0.9%

Entry on October 18 at $20.60
Listed on October 17, 2012
Time Frame: exit prior to the Oct. 30th earnings report
Average Daily Volume = 902 thousand
New Positions: see below

Comments:
10/20/12: It was a volatile week for DWA. We were expecting the breakout higher to produce a short squeeze and shares surged +6.5% on Thursday. I was not expecting DWA to give back -3.7% on Friday. Broken resistance near $20.50 might offer some support and more conservative traders may want to adjust their stops closer to this level.

I am not suggesting new positions.

Our exit target is $22.00 but more aggressive traders could aim higher.

Earlier Comments:
The stock could see a short squeeze. The most recent data listed short interest at 43% of the 63 million share float. We do not want to hold over the October 30th earnings report.

current Position: Long DWA stock @ $20.60

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

Long NOV $20 call (DWA1217k20) Entry $1.45

10/18/12 triggered @ 20.60

chart:



Plum Creek Timber - PCL - close: 44.08 change: -0.43

Stop Loss: 42.95
Target(s): 44.75
Current Gain/Loss: + 2.2%

Entry on October 15 at $43.15
Listed on October 13, 2012
Time Frame: exit prior to earnings on Oct. 29th (not yet confirmed)
Average Daily Volume = 1.1 million
New Positions: see below

Comments:
10/20/12: After a five-day stretch of gains PCL finally succumbed to some profit taking. Shares gave up -0.9% on Friday. If the market continues to be weak then I would expect PCL to correct lower toward the $43.50 area. More conservative traders may want to exit now.

current Position: Long PCL stock @ $43.15

10/18/12 new stop loss @ 42.95, adjust target to $44.75
10/16/12 new stop loss @ 42.40
10/15/12 triggered at $43.15

chart:



BEARISH Play Updates

Navistar Intl. - NAV - close: 19.04 change: -1.50

Stop Loss: 20.55
Target(s): 16.00
Current Gain/Loss: + 3.6%

Entry on October 19 at $19.75
Listed on October 16, 2012
Time Frame: 3 to 6 weeks
Average Daily Volume = 1.6 million
New Positions: see below

Comments:
10/20/12: NAV broke down below major support at $20.00 and hit our trigger to launch bearish positions at $19.75. The stock displayed significant weakness with a -7.3% decline on Friday. I am lowering our stop loss to $20.55. If you're looking for a new entry point consider waiting for a bounce back toward the $19.75-20.00 zone.

Earlier Comments:
The 2008 lows were near $15.50 so we're going to target a drop to $16.00. FYI: There is already a growing amount of bearish pressure on the stock with the most recent data listing short interest at 15% of the 47.4 million share float.

current Position: short NAV stock @ $19.75

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

Long NOV $20 PUT (NAV1217w20) entry $1.55

10/20/12 new stop loss @ 20.55
10/19/12 triggered @ 19.75

chart:



Sohu.com - SOHU - close: 38.44 change: -0.87

Stop Loss: 40.55
Target(s): 36.00
Current Gain/Loss: + 2.8%

Entry on October 10 at $39.55
Listed on October 9, 2012
Time Frame: Exit prior to the late October earnings report
Average Daily Volume = 472 thousand
New Positions: see below

Comments:
10/20/12: The reversal that started on Thursday continued with a -2.2% decline on Friday. SOHU closed at new multi-week lows. Thursday's high was $40.44. I am lowering our stop loss to $40.51.

Keep in mind that we want to exit prior to the late October earnings report (current estimate is Oct. 30th).

Earlier Comments:
I have to warn you that SOHU can be a volatile stock so we need to limit our position size to reduce our risk or consider trading the options. Our target is $36.00. More aggressive traders could aim for the $34.00 area.

*Small Positions*

current Position: short SOHU stock @ $39.55

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

Long Nov $37.50 PUT (SOHU1211w37.5) entry $1.85

10/20/12 new stop loss @ 40.55
10/18/12 new stop loss @ 41.01

chart:



Titanium Metals - TIE - close: 12.12 change: -0.16

Stop Loss: 12.65
Target(s): 11.00
Current Gain/Loss: + 2.3%

Entry on October 4 at $12.41
Listed on October 3, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.5 million
New Positions: see below

Comments:
10/20/12: TIE faded lower on Friday to post a -1.3% decline. Yet shares have yet to close under short-term support near $12.00 and its 100-dma. More conservative traders might want to consider adjusting their stop loss lower. I am not suggesting new positions at this time.

*Small Positions*

current Position: short TIE stock @ $12.41

10/13/12 new stop loss @ 12.65

chart:



Trimble Navigation - TRMB - close: 46.01 change: -1.64

Stop Loss: 48.55
Target(s): 42.50
Current Gain/Loss: + 1.1%

Entry on October 19 at $46.50
Listed on October 10, 2012
Time Frame: exit prior to earnings on Nov. 1st
Average Daily Volume = 697 thousand
New Positions: see below

Comments:
10/20/12: It looks like our patience might pay off. I suggested aggressive traders short the failed rally on Wednesday. The plan for the rest of us was to wait for a breakdown to new relative lows and open small bearish positions at $46.50. TRMB hit our $46.50 entry point on Friday with a -3.4% decline.

Earlier Comments:
If triggered our target is $42.50 but we want to exit prior to the next earnings report on November 1st.

(Small Positions)

current Position: short TRMB stock @ $46.50

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

Long Nov $45 PUT (TRMB1211w45) Entry $1.40

10/19/12 triggered @ 46.50

chart:



CLOSED BULLISH PLAYS

Bio-Reference Labs - BRLI - close: 31.07 change: -1.05

Stop Loss: 31.15
Target(s): 34.75
Current Gain/Loss: + 3.0%

Entry on October 03 at $30.25
Listed on October 2, 2012
Time Frame: 4 to 6 weeks
Average Daily Volume = 232 thousand
New Positions: see below

Comments:
10/20/12: BRLI cut our potential gains in half. The market's widespread decline on Friday produced a -3.2% drop in BRLI. Shares fell to their 20-dma before bouncing. Our stop loss was hit at $31.15.

closed Position: Long BRLI stock @ $30.25 exit $31.15 (+3.0%)

10/19/12 stopped out at $31.15
10/18/12 new stop loss @ 31.15
10/16/12 new stop loss @ 30.95
10/11/12 new stop loss @ 30.75
10/04/12 new stop loss @ 29.90
10/03/12 new stop loss @ 29.25
10/03/12 triggered @ 30.25

chart:



Colfax Corp. - CFX - close: 35.70 change: -1.06

Stop Loss: 35.90
Target(s): 39.90
Current Gain/Loss: - 3.0%

Entry on October 01 at $37.00
Listed on September 29, 2012
Time Frame: exit prior to the late October earnings report
Average Daily Volume = 753 thousand
New Positions: see below

Comments:
10/20/12: I worried that the failed rally this past week might be a bearish double top. The Thursday-Friday reversal lower certainly lends credence to my concerns. Friday's drop was ugly with a -2.88% decline and a breakdown under its 10-dma, 20-dma, 30-dma, and the $36.00 level. Our stop loss was hit at $35.90.

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

*Small Positions*

closed Position: Long CFX stock @ $37.00 exit $35.90 (-3.0%)

10/19/12 stopped out at $35.90
10/16/12 new stop loss @ 35.90
10/13/12 new stop loss @ 35.40
10/01/12 triggered @ 37.00

chart: