Editor's Note:
We saw a number of bullish reversals and bullish breakouts today. Plenty of it fueled by short covering.

Our bearish plays on DBD, LVLT, NAV, SOHU, and TIE were all stopped out.

Current Portfolio:


BULLISH Play Updates

Ryland Group - RYL - close: 35.34 change: +1.47

Stop Loss: 32.90
Target(s): 39.50
Current Gain/Loss: + 2.4%

Entry on October 31 at $34.50
Listed on October 27, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.3 million
New Positions: see below

Comments:
11/01/12: The first trading day for November proved to be a bullish one for shares of RYL. Actually most of the homebuilders managed to outperform the major indices today. RYL added +4.3% and shares closed near last week's highs. The relative strength is encouraging. I am raising our stop loss to $32.90.

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

current Position: Long RYL stock @ 34.50

11/01/12 new stop loss @ 32.90
10/31/12 triggered @ 34.50



BEARISH Play Updates

Hewlett-Packard - HPQ - close: 14.00 change: +0.15

Stop Loss: 14.51
Target(s): 11.50
Current Gain/Loss: - 0.9%

Entry on November 01 at $13.88
Listed on October 31, 2012
Time Frame: exit prior to the Nov. 20th earnings report
Average Daily Volume = 35.7 million
New Positions: see below

Comments:
11/01/12: HPQ was not immune to the market's widespread gains today. Yet shares spent most of the session churning on either side of the $14.00 level. Today's low was $13.80. Readers may want to wait for a new drop under $13.80 as a new bearish entry point. Our target is $11.50 but we will exit prior to the Nov. 20th earnings report.

current Position: Short HPQ stock @ $13.88

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

Long DEC $13 PUT (HPQ1222x13) Entry $0.47



CLOSED BEARISH PLAYS

Diebold, Inc. - DBD - close: 30.31 change: +0.56

Stop Loss: 30.65
Target(s): 26.50
Current Gain/Loss: - 3.9%

Entry on October 29 at $29.50
Listed on October 27, 2012
Time Frame: 3 to 6 weeks
Average Daily Volume = 651 thousand
New Positions: see below

Comments:
11/01/12: DBD shot higher this morning. It looked like our trade might be safe but a last minute spike higher midday pushed DBD to $30.66. That was just enough to hit our stop loss at $30.65. The rally failed near the 10-dma but the close back above $30.00 is bad news for the bears.

closed Position: short DBD stock @ $29.50 exit $30.65 (-3.9%)

11/01/12 stopped out at $30.65

chart:



Level 3 Communications - LVLT - close: 20.65 change: +0.15

Stop Loss: 21.05
Target(s): 17.00
Current Gain/Loss: - 5.8%

Entry on October 31 @ $19.90
Listed on October 27, 2012
Time Frame: 3 to 6 weeks
Average Daily Volume = 1.5 million
New Positions: see below

Comments:
11/01/12: The early morning rally also lifted shares of LVLT. The stock spiked above $21.00, hit our stop loss at $21.05 and then reversed at $21.20. Our trade is closed but I would keep an eye on LVLT. I suspect we'll see shares breakdown under the $20 level again.

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

*Small Positions*

closed Position: short LVLT stock @ $19.90 exit $21.05 (-5.8%)

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

NOV $20 PUT (LVLT1217w20) entry $0.70 exit $0.25*(-64.2%)

11/01/12 stopped out at $21.05
*option exit price is an estimate since the option did not trade at the time our play was closed.

chart:



Navistar Intl. - NAV - close: 20.12 change: +1.37

Stop Loss: 20.05
Target(s): 16.00
Current Gain/Loss: - 1.5%

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:
11/01/12: Short-covering produced a big bounce in NAV. Shares surged +7.3% and broke through resistance at the $20.00 mark. The stock hit our stop loss at $20.05 this afternoon. Keep NAV on your watch list. The larger trend is still bearish.

closed Position: short NAV stock @ $19.75 exit $20.05 (-1.5%)

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

NOV $20 PUT (NAV1217w20) entry $1.55 exit $0.85 (-45.1%)

11/01/12 stopped out at $20.05
10/25/12 new stop loss @ 20.05
10/24/12 NAV announced plans for 10 million new shares of stock
10/20/12 new stop loss @ 20.55
10/19/12 triggered @ 19.75

chart:



Sohu.com - SOHU - close: 39.98 change: +2.02

Stop Loss: 40.05
Target(s): 36.00
Current Gain/Loss: - 1.3%

Entry on October 10 at $39.55
Listed on October 9, 2012
Time Frame: Exit prior to the Nov. 5th earnings report
Average Daily Volume = 472 thousand
New Positions: see below

Comments:
11/01/12: Just yesterday I was suggesting that readers may want to exit early from our SOHU trade. We were planning to exit on Friday to avoid holding the earnings report. Yet shares exploded higher on us with today's market rally sparking a significant amount of short covering. SOHU broke its bearish channel and traded above what should have been round-number resistance at $40.00. Our stop was hit at $40.05.

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.

*Small Positions*

closed Position: short SOHU stock @ $39.55 exit $40.05 (-1.3%)

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

Nov $37.50 PUT (SOHU1211w37.5) entry $1.85 exit $0.85 (-54.0%)

11/01/12 stopped out at $40.05
10/31/12 prepare to exit on Fri. Nov. 2nd if our trade has not hit our target or stop before then
10/23/12 new stop loss @ 40.05
10/20/12 new stop loss @ 40.55
10/18/12 new stop loss @ 41.01

chart:



Titanium Metals - TIE - close: 12.33 change: +0.62

Stop Loss: 12.25
Target(s): 10.75
Current Gain/Loss: - 3.5%

Entry on November 01 at $11.84
Listed on October 31, 2012
Time Frame: exit prior to the Nov. 7th earnings report (unconfirmed)
Average Daily Volume = 1.2 million
New Positions: see below

Comments:
11/01/12: Ouch! TIE broke support and closed at new relative lows yesterday. Yet shares reversed higher and soared to a +5.2% gain today. The stock hit our stop loss at $12.25 thanks to almost an hour and a half of short covering this morning.

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

*Small Bearish Positions*

closed Position: short TIE stock @ $11.84, exit $12.25 (-3.5%)

chart: