Editor's Note:
The new year got off to a weak start with stocks in a broad-based decline.

CMA and WAGE were closed this morning.


Current Portfolio:


BULLISH Play Updates

TD Ameritrade Holding Corp. - AMTD - close: 30.43 change: -0.21

Stop Loss: 29.45
Target(s): 33.85
Current Gain/Loss: - 0.7%

Entry on December 31 at $30.65
Listed on December 21, 2013
Time Frame: exit PRIOR to earnings on January 21st
Average Daily Volume = 1.9 million
New Positions: Yes, see below

Comments:
01/02/14: Sadly there was no follow through on Tuesday's rally in AMTD. Fortunately traders were buying the dip near its rising 10-dma today.

current Position: long AMTD stock @ $30.65

12/31/13 triggered at $30.65



DreamWorks Animation - DWA - close: 35.15 change: -0.35

Stop Loss: 34.45
Target(s): 39.50
Current Gain/Loss: - 0.6%

Entry on December 20 at $35.35
Listed on December 19, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 702 thousand
New Positions: see below

Comments:
01/02/14: Profit taking in DWA pushed shares below their 10-dma but the stock bounced at $34.74 and pared its losses. I am not suggesting new positions at this time.

current Position: long DWA stock @ $35.35

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

Long Mar $35 call (DWA1422c35) entry $2.65*

12/28/13 new stop loss @ 34.45
12/20/13 triggered @ 35.35
*option entry price is an estimate since the option did not trade at the time our play was opened.



General Electric - GE - close: 27.50 change: -0.53

Stop Loss: 26.95
Target(s): 31.50
Current Gain/Loss: - 0.9%

Entry on December 26 at $27.75
Listed on December 24, 2013
Time Frame: Exit PRIOR to earnings on January 17th
Average Daily Volume = 37 million
New Positions: see below

Comments:
01/02/14: It was a rough day for the industrial sector, one of the market's worst performing groups today. GE was an underperformer with shares gapping down and then plunging to a -1.89% decline. Today's drop erased about four and a half days worth of gains. Fortunately, broken resistance near $27.50 did indeed hold up as support (okay, it was closer to the $27.40 level). A bounce from here can be used as a new bullish entry point.

Our short-term target is $31.50 but we will plan on exiting prior to GE's earnings report in mid January. Odds are our $31.50 target is a bit too optimistic. We may end up exiting closer to $30.00.

current Position: long GE stock @ $27.75

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

Long Feb $28 call (GE1422B28) entry $0.58

12/26/13 triggered @ 27.75



HCI Group, Inc. - HCI - close: 51.76 change: -1.74

Stop Loss: 51.15
Target(s): 58.00
Current Gain/Loss: - 2.4%

Entry on December 31 at $53.05
Listed on December 28, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 205 thousand
New Positions: Yes, see below

Comments:
01/02/14: Ouch! I don't see any news to explain today's relative weakness in HCI. The stock plunged toward last week's low and its 10-dma before starting to bounce. Shares ended the session with a -3.25% decline versus a -0.88% drop in the S&P 500. Today's low was $51.25. Our stop is at $51.15. I am not suggesting new positions.

Earlier Comments:
The most recent data listed short interest at 23% of the very, very small 9.6 million share float. Additional gains from here could spark more short covering.

Our target is $58.00. If you're patient you could try aiming higher. The Point & Figure chart for HCI is bullish with a long-term $74 target.

current Position: long HCI stock @ $53.05

12/31/13 triggered @ 53.05




Spirit Aero Systems - SPR - close: 33.71 change: -0.37

Stop Loss: 32.95
Target(s): 38.50
Current Gain/Loss: - 1.0%

Entry on December 24 at $34.05
Listed on December 21, 2013
Time Frame: Exit PRIOR to earnings in February.
Average Daily Volume = 1.2 million
New Positions: see below

Comments:
01/02/14: SPR briefly traded below short-term technical support at its 10-dma this morning. Unfortunately the early morning rebound faded and shares posted a -1.0% decline. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week target is $38.50 but we will plan on exiting positions prior to SPR's earnings report in February.

current Position: long SPR stock @ $34.05

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

Long Apr $35 call (SPR1419D35) entry $2.50*

12/30/13 new stop loss @ 32.95
12/24/13 triggered @ 34.05
*option entry price is an estimate since the option did not trade at the time our play was opened.



Tempur Sealy Intl. - TPX - close: 54.39 change: +0.43

Stop Loss: 51.75
Target(s): 57.50
Current Gain/Loss: + 2.8%

Entry on December 24 at $52.91
Listed on December 23, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 757 thousand
New Positions: see below

Comments:
01/02/14: TPX displayed relative strength with a +0.79% gain. The stock actually spiked lower this morning but the shares bounced at $53.27. TPX hit a new 52-week high at $55.25 midday. Traders may want to raise their stop loss. I am not suggesting new positions at current levels.

Earlier Comments:
If this rally continues the stock could see some short covering. The most recent data listed short interest at 17% of the 50 million share float. Our multi-week target is $57.50. More aggressive traders, with enough patience, may want to aim higher since the Point & Figure chart for TPX is bullish with a long-term $66.00 target.

current Position: long TPX stock @ $52.91

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

Long Mar $55 call (TPX1422c55) entry $3.50*

12/30/13 new stop loss @ 51.75
12/26/13 new stop loss @ 50.95
12/24/13 trade opens at $52.91
*option entry price is an estimate since the option did not trade at the time our play was opened.



21Vianet Group, Inc. - VNET - close: 23.32 change: -0.20

Stop Loss: 21.90
Target(s): 24.75
Current Gain/Loss: +10.0%

Entry on December 18 at $21.20
Listed on December 17, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 614 thousand
New Positions: see below

Comments:
01/02/14: VNET held up relatively well. The stock's decline today kept pace with the broader market but it could have been worse given its significant gains over the past few weeks. Shares bounced near the $23.00 level this morning. Tonight we're adjusting our stop loss to $21.90.

Earlier Comments:
We want to keep our position size small for a reason. First, VNET has obviously been very volatile over the last couple of months. That could make it tough to trade. Second, the post-IPO high from back in 2011 is $22.33 and that could be significant overhead resistance. I am not listing the options on VNET because the spreads are a bit too wide to trade. However, using the options could limit your risk.

*small positions*

current Position: Long VNET stock @ $21.20

01/02/14 new stop loss @ 21.90
12/31/13 new stop loss @ 21.40
12/24/13 new stop loss @ 20.75, adjust exit target to $24.75
12/21/13 new stop loss @ 19.90
12/18/13 triggered @ 21.20



Walter Energy, Inc. - WLT - close: 16.43 change: -0.20

Stop Loss: 15.45
Target(s): 19.25
Current Gain/Loss: - 3.0%

Entry on December 30 at $16.93
Listed on December 28, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 6.0 million
New Positions: see below

Comments:
01/02/14: WLT saw an early morning bounce but the rebound failed near $17.00. Shares still look like they are headed for what should be support near $16.00 and its 200-dma.

Earlier Comments:
If this rally continues WLT could see a short squeeze. The most recent data listed short interest at 37% of the 62.2 million share float. I am labeling this trade as an aggressive, higher-risk trade because WLT can be so volatile. We're suggesting small positions to limit our risk. FYI: The Point & Figure chart for WLT is bullish with a $21.00 target.

* small positions *

current Position: Long WLT stock @ $16.93

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

Long Feb $17 call (WLT1422B17) entry $1.70

12/30/13 trade opens at $16.93



Western Refining, Inc. - WNR - close: 42.42 change: +0.01

Stop Loss: 39.75
Target(s): 46.00
Current Gain/Loss: + 2.6%

Entry on December 24 at $41.35
Listed on December 23, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.9 million
New Positions: see below

Comments:
01/02/14: WNR hit new relative highs before trimming its gains to close virtually unchanged. More conservative traders may want to consider raising their stop loss.

Earlier Comments:
I would keep in mind that there is a lot of short interest. The most recent data listed short interest at about 28% of the 50.6 million share float. That could fuel a short squeeze in WNR. I am suggesting small positions to limit our risk just in case there is a worker strike at the NTI plant and retail gas stations. Our short-term target is $46.00. More aggressive traders could aim higher since the Point & Figure chart for WNR is bullish with a $50.00 target.

*Small positions *

current Position: Long WNR stock @ $41.35

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

Long Mar $42 call (WNR1422c42) entry $2.70*

12/31/13 new stop loss @ 39.75
12/24/13 trade opened this morning at $41.35
*option entry price is an estimate since the option did not trade at the time our play was opened.



Yandex N.V. - YNDX - close: 42.63 chnage: -0.52

Stop Loss: 40.95
Target(s): 48.50
Current Gain/Loss: - 1.6%

Entry on January 02 at $43.31
Listed on December 31, 2013
Time Frame: exit PRIOR to earnings in mid February
Average Daily Volume = 2.7 million
New Positions: see below

Comments:
01/02/14: YNDX did not see any follow through on Tuesday's bounce. Shares opened at $43.31 and then reversed to a -1.2% decline. The $42.00 level is short-term support. Nimble traders could try buying a dip or a bounce near this area.

Earlier Comments:
Our multi-week target is $48.50. We want to keep our position size small to limit our risk. FYI: The Point & Figure chart for YNDX is bullish with a $48.00 target.

*Small positions*

current Position: long YNDX stock @ $43.31

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

Long Feb $45 call (YNDX1422B45) entry $2.00*

01/02/14 trade opened on gap higher at $43.31.
*option entry price is an estimate since the option did not trade at the time our play was opened.



BEARISH Play Updates

Ecopetrol SA - EC - close: 37.97 change: -0.48

Stop Loss: 39.05
Target(s): 31.00
Current Gain/Loss: unopened

Entry on December -- at $--.--
Listed on December 30, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 716 thousand
New Positions: Yes, see below

Comments:
01/02/14: The early morning bounce in EC faded and shares underperformed the market with a -1.24% decline. We are waiting on a breakdown to new relative lows. I don't see any changes from my Monday night new play description.

Earlier Comments:
EC is a Columbian oil and gas company. The stock has been struggling most of the year. Shares just recently broke down below support at $40.00 on big volume. There has been very little oversold bounce. Now the stock looks poised to break down below the next level of key support near $37.50.

I am suggesting a trigger to launch bearish positions at $37.35. If triggered our target is $31.00. Once it's below $37.50 the next level of support appears to be the $30.00 level.

Trigger @ 37.35

Suggested Position: short EC stock @ (trigger)



Nationstar Mortgage Holdings - NSM - close: 36.43 change: -0.53

Stop Loss: 37.75
Target(s): 31.00
Current Gain/Loss: unopened

Entry on December -- at $--.--
Listed on December 30, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.0 million
New Positions: Yes, see below

Comments:
01/02/14: NSM also underperformed the market with a -1.4% decline versus the S&P 500's -0.88% decline. Yet shares remain above support near $36.00. I don't see any changes from my Monday night new play description.

Earlier Comments:
NSM is in the financial sector. The company is a mortgage loan servicer. Back in November the company missed earnings estimates by a wide margin and lowered its 2014 outlook. The oversold bounce failed at technical resistance. Now shares are poised to breakdown below support, which could spark the next leg lower.

I am labeling this an aggressive, higher-risk trade. There is already a lot of bears in this trade. The most recent data listed short interest at 39% of the very small 20.4 million share float. That is a risk of a short squeeze. Thus I am suggesting small positions. Traders may want to use put options to limit their risk.

I am suggesting a trigger to launch small bearish positions at $35.65. If triggered our target is $31.00.

Trigger @ 35.65 *small positions*

Suggested Position: short NSM stock @ (trigger)

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

Buy the Feb $35 PUT (NSM1422N35)



CLOSED BULLISH PLAYS

Comerica Inc. - CMA - close: 46.85 change: -0.69

Stop Loss: 46.45
Target(s): 49.90
Current Gain/Loss: + 3.2%

Entry on November 25 at $45.76
Listed on November 21, 2013
Time Frame: Exit PRIOR to earnings on January 17th
Average Daily Volume = 1.5 million
New Positions: see below

Comments:
01/02/14: CMA has not really been participating with the market's rally recently. That's why we decided in Tuesday's newsletter to exit immediately (this morning). Shares gapped down at $47.24 before falling to a -1.45% decline.

closed Position: Long CMA stock @ $45.76 exit $47.24 (+3.2%)

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

2014 Jan $45 call (CMA1418a45) entry $1.72* exit $2.39**(+38.9%)

01/02/13 planned exit
**option exit price is an estimate since the option did not trade at the time our play was closed.
12/31/13 prepare to exit immediate (Thursday morning, Jan. 2nd)
12/30/13 new stop loss @ 46.45
12/26/13 new stop loss @ 45.76
12/24/13 new stop loss @ 45.40
12/18/13 new stop loss @ 44.90
11/25/13 trade opened on gap higher at $45.76. suggested trigger was $45.65
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:



WageWorks, Inc. - WAGE - close: 60.04 change: +0.60

Stop Loss: 58.85
Target(s): 67.50
Current Gain/Loss: -2.0%

Entry on December 19 at $60.55
Listed on December 16, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 347 thousand
New Positions: see below

Comments:
01/02/14: The last few days have seen WAGE underperforming the market. In Tuesday's newsletter we decided to exit immediately. Naturally the stock bounced from its intraday lows and outperformed with a +1.0% gain today.

Our trade closed this morning at $59.36.

closed Position: long WAGE stock @ $60.55 exit $59.36 (-2.0%)

01/02/14 planned exit
12/31/13 prepare to exit immediate (Thursday morning, Jan 2nd)
12/30/13 warning! Today's decline looks bearish. Readers may want to exit immediately
12/26/13 new stop loss @ 58.85
12/19/13 triggered at $60.55

chart: