Editor's Note:
The small cap index underperformed its big cap rivals. Could this be a clue to the market's current strength? Or should I say lack of internal strength.

Financials were also a laggard today, which is another warning signal for the market.

Our GRPN and STZ trades were stopped out today.


Current Portfolio:


BULLISH Play Updates

Barnes Group - B - close: 30.11 change: -0.23

Stop Loss: 29.90
Target(s): 34.75
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 28, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 310 thousand
New Positions: Yes, see below

Comments:
06/04/13: It looks like more of the same for shares of B with the stock churning inside its $30-31 zone. Currently we are waiting for a bullish breakout past resistance at $31.00. The trigger to launch positions is $31.10 but if we see B close below $30.00 we will most likely drop this stock as a candidate.

Earlier Comments:
We definitely want to keep our position size small to limit our risk.

Trigger @ 31.10 *Small Positions*

Suggested Position: buy B stock @ (trigger)



Electronic Arts - EA - close: 22.72 change: -0.27

Stop Loss: 22.40
Target(s): 25.75
Current Gain/Loss: - 1.6%

Entry on May 28 at $23.10
Listed on May 23, 2013
Time Frame: 4 to 6 weeks
Average Daily Volume = 6.0 million
New Positions: see below

Comments:
06/04/13: Our EA trade could be in trouble. Shares lost -1.1% and closed right on its 10-dma, which should be short-term support. If EA sees any further weakness it will likely hit our stop loss at $22.40.

Earlier Comments:
If triggered our target is $25.75. However, that is a slightly aggressive target. The $25.00 level has been resistance in the past and could be resistance again.

current Position: Long EA stock @ $23.10

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

Long Jul $25 call (EA1320G25) Entry $0.62

06/01/13 new stop loss @ 22.40



Financial Engines - FNGN - close: 42.41 change: -0.23

Stop Loss: 42.25
Target(s): 49.50
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 29, 2013
Time Frame: 4 to 8 weeks
Average Daily Volume = 396 thousand
New Positions: Yes, see below

Comments:
06/04/13: FNGN is still hovering near the bottom of its $42-44 trading range. We are waiting for a breakout to new highs.

Earlier Comments:
If FNGN can breakout past resistance it could see a short squeeze. The most recent data listed short interest at 19% of the 47.7 million-share float.

The May 20th high was $44.33. I am suggesting small bullish positions at $44.50. If triggered our target is $49.50. We do want to keep our position size small because FNGN is arguably overbought here.

Trigger @ 44.50 *small positions*

Suggested Position: buy FNGN stock @ (trigger)



Spirit Airlines - SAVE - close: 30.51 change: +0.36

Stop Loss: 29.20
Target(s): 34.00
Current Gain/Loss: + 0.9%

Entry on May 28 at $30.25
Listed on May 25, 2013
Time Frame: 8 to 9 weeks
Average Daily Volume = 686 thousand
New Positions: see below

Comments:
06/04/13: SAVE continues to show strength with a rally this morning. The stock spent the rest of the day drifting sideways. I don't see any changes from my prior comments.

I am urging caution here. SAVE looks poised to rally. Yet the XAL airline index looks poised to breakdown. If the industry declines it could make gains tougher for SAVE.

current Position: Long SAVE stock @ $30.25

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

Long Jul $30 call (SAVE1320G30) entry $1.50

06/01/13 new stop loss @ 29.20



SunTrust Banks - STI - close: 32.02 change: -0.22

Stop Loss: 31.40
Target(s): 34.50
Current Gain/Loss: + 2.0%

Entry on May 16 at $31.40
Listed on May 15, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.4 million
New Positions: see below

Comments:
06/04/13: Hmm... positive analyst comments could not keep STI in positive territory today. The financials actually underperformed the broader market. Has the rally in this industry group finally run out of fuel?

Yesterday's low was $31.54. Tonight I am raising our stop loss to $31.40, which is breakeven.

Earlier Comments:
I want to remind you that the 2011 highs near $33.00-33.15 could prove to be resistance. More conservative traders may want to exit near $33.00.

current Position: Long STI stock @ $31.40

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

Long Jul $32 call (STI1320G32) entry $0.78

06/04/13 new stop loss @ 31.40
05/28/13 call option traders might want to take profits early right now.
note: STI will begin trading ex-dividend tomorrow (10 cents)
05/20/13 new stop loss @ 30.95



Wells Fargo & Co - WFC - close: 40.44 change: -0.29

Stop Loss: 39.90
Target(s): 44.50
Current Gain/Loss: - 2.0%

Entry on May 30 at $41.25
Listed on May 29, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 20.5 million
New Positions: see below

Comments:
06/04/13: Hmm... the financial sector was a laggard today. Has the rally in this sector finally peaked? WFC looks poised to retest the $40.00 level again. Readers may want to wait for the dip to $40.00 or a bounce from $40.00 before initiating new positions.

*Small Positions*

current Position: Long WFC stock @ $41.25



BEARISH Play Updates

ConAgra Foods - CAG - close: 33.53 change: +0.08

Stop Loss: 35.05
Target(s): 30.15
Current Gain/Loss: +0.4%

Entry on June 03 at $33.67
Listed on June 01, 2013
Time Frame: Exit PRIOR to earnings on June 27th
Average Daily Volume = 2.8 million
New Positions: see below

Comments:
06/04/13: CAG gapped open higher but then spent the rest of the session churning sideways under the $33.75 level. I don't see any changes from my prior comments. If the broader market rallies tomorrow then I would not be surprised to see CAG produce a bounce back toward the $34.00-34.50 area.

Earlier Comments:
Nimble traders could wait for an oversold bounce and maybe a failed rally near $34.50 as an alternative entry point. Our target is $30.15. However, we will plan on exiting positions prior to CAG's earnings report on June 27th.

Suggested Position: short CAG stock @ $33.67

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

Long Jul $33 PUT (CAG1320S33) entry $0.80



Rackspace Holdings - RAX - close: 35.69 change: -1.14

Stop Loss: 40.10
Target(s): 31.00
Current Gain/Loss: +6.1%

Entry on May 22 at $38.02
Listed on May 21, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 3.0 million
New Positions: see below

Comments:
06/04/13: The cloud-computing industry is getting more competitive. Tech giant IBM just bought privately held SoftLayer Technologies for $2 billion in an effort to strengthen IBM's cloud computing services. That is not good news for RAX. The stock sank -3.0%.

Earlier Comments:
If you're concerned about shorting RAX then buy the put option to limit your risk to the cost of your option. Although you may want to buy the July puts. June puts only have three weeks left.

current Position: short RAX stock @ $38.02

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

Long Jun $37.50 PUT (RAX1322r37.5) entry $1.60

05/25/13 new stop loss at $40.10, more conservative traders may want to exit early now.
05/24/13 RAX confirms the bullish reversal pattern.
05/23/13 RAX produced a bullish reversal candlestick.



Safeway Inc. - SWY - close: 22.97 change: -0.23

Stop Loss: 23.75
Target(s): 20.00
Current Gain/Loss: - 0.3%

Entry on June 03 at $22.90
Listed on June 01, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.4 million
New Positions: see below

Comments:
06/04/13: SWY spiked higher this morning and managed to trade above its 10-dma at least temporarily. The high today was $23.57. Shares reversed to post a -0.99% decline. I would use today's move as a new bearish entry point or wait for a new relative low (under $22.64).

Earlier Comments:
I am suggesting we keep our position size small because the most recent data listed short interest at 23% of the 234 million-share float. That does raise the risk of a short squeeze. You could try and limit your risk by trading the options.

*Small Positions*

Suggested Position: short SWY stock @ $22.90

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

Long Jul $23 PUT (SWY1320S23) entry $1.35



CLOSED BULLISH PLAYS

Groupon, Inc. - GRPN - close: 7.00 change: -0.14

Stop Loss: 6.99
Target(s): 9.00
Current Gain/Loss: - 5.7%

Entry on May 28 at $ 7.41
Listed on May 25, 2013
Time Frame: 10 to 12 weeks
Average Daily Volume = 20.5 million
New Positions: see below

Comments:
06/04/13: The volatility in GRPN continued today and shares hit our stop loss at $6.99. There is still no explanation for Monday's sell-off in GRPN and the weakness continued today. The stock dipped to $6.92 intraday before bouncing back to close at $7.00.

I remain intrigued by GRPN as a potential trade but investors might want to just put it on your radar screen and wait for another bounce near its 100-dma and the long-term trend of higher lows.

Earlier Comments:
Due to the stock's volatility in the last couple of months I am suggesting we keep our position size small to limit risk.

closed Position: Long GRPN stock @ $7.41 exit $6.99 (-5.7%)

06/04/13 stopped out
06/01/13 new stop loss @ 6.99

chart:



Constellation Brands - STZ - close: 52.11 change: -1.30

Stop Loss: 51.75
Target(s): 58.00
Current Gain/Loss: - 3.5%

Entry on June 04 at $53.65
Listed on June 03, 2013
Time Frame: Exit prior to earnings in late June!
Average Daily Volume = 2.0 million
New Positions: see below

Comments:
06/04/13: STZ did not want to cooperate and hit both our entry trigger and our stop loss in the same session.

There was big news today in the alcoholic beverage business. Anheuser-Busch InBev (BUD) finalized its $20.1 billion purchase of Mexican brewer Grupo Modelo. According to the Associated Press, "The world's largest brewer has been trying for almost a year to buy the half of Modelo that it did not already own. The Department of Justice initially blocked the deal, concerned that it would hurt U.S. beer shoppers' choices, but signed off on the combination after AB InBev agreed to sell Modelo's entire U.S. business to a wine maker, Constellation Brands Inc."

STZ underperformed the market with a -2.4% decline. What's even more depressing is that STZ inched up just high enough this morning to hit our entry trigger at $53.65, thus opening our trade. Then, with the all-day slide lower, STZ fell just low enough to hit our stop loss at $51.75, closing our trade.

Earlier Comments:
I would keep our position size small.

*small positions*

closed Position: Long STZ stock @ $53.65, closed 51.75 (-3.5%)

06/04/13 triggered @ 53.65, stopped out at $51.75

chart: