Editor's Note:
The market mania on Monday was all bearish as stock collapsed at the open. Big declines overseas, especially in China, fueled another round of panic selling. Stocks did see a big bounce intraday but the rebound rolled over into the close.

BFAM was stopped out. The XHB trade did not open.

We have updated stop losses on all of our bearish trades.


Current Portfolio:


BULLISH Play Updates

We do not have any active bullish candidates.

The market's collapse in the last three days has been extreme.



BEARISH Play Updates

Continental Resources - CLR - close: 27.16 change: -2.85

Stop Loss: 29.65
Target(s): To Be Determined
Current Gain/Loss: +9.0%
Entry on August 21 at $29.85
Listed on August 20, 2015
Time Frame: Exit 6 to 9 weeks
Average Daily Volume = 3.4 million
New Positions: see below

Comments:
08/24/15: Shares of CLR were downgraded to a "neutral" today. That just poured salt on the wound as energy stocks underperformed. Shares gapped down at $25.00 and tagged $22.58 at its lows. CLR managed to pare its losses but still underperformed the market with a -9.49% decline.

Tonight we are moving the stop loss to $29.65.

No new positions at this time.

Trade Description: August 20, 2015:
Unless you have been living under a rock for the last year then you already know crude oil is getting crushed. Oil is down nearly -60% from its 2014 highs. Today oil closed at $40.94 a barrel. More and more we are hearing analysts forecasting oil in the low $30s. A few outliers are suggesting oil in the $20s or even lower. That's because so far none of the oil producers have been willing to cut production.

OPEC is producing as much oil as they can. Russia is producing as much as they can. Iraq is boosting its production. If the Iran nuclear deal gets approved then they will start unloading more oil on the market. The problem is that all of these producers are desperate. They need the cash flow. OPEC has been trying to price U.S. producers out of the market but American energy companies have been resilient and U.S. production remains near all-time highs.

Put it all together and we have high oil production as demand stalls. The global economy, especially China, is slowing down. That means less demand for oil. Add to that a rising dollar and you have a very bearish recipe for commodities. Today oil is trading at levels not seen since 2009. The market is worried that crude oil won't bottom until we see a number of bankruptcies in the U.S. energy sector. Anyone with a high debt load is being seen as a risk.

CLR is in the basic materials sector. According to the company, "Continental Resources (CLR) is a Top 10 independent oil producer in the United States and a leader in America's energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and one of the largest producers in the nation's premier oil field, the Bakken play of North Dakota and Montana. The Company also has significant positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the Northwest Cana play. With a focus on the exploration and production of oil, Continental has unlocked the technology and resources vital to American energy independence and is a strong free market advocate in favor of lifting of the domestic crude oil export ban. In 2015, the Company will celebrate 48 years of operations."

The plunge in oil prices is very evident in CLR's revenues. Their 2014 Q4 results saw revenues down -0.1% to $902.3 million. 2015 Q1 revenues were down -41% to $592.8 million. 2015 Q2 revenues were down -30% to $790 million.

The trend is lower. While we are short-term bearish on the stock I have to give credit to CLR for their ability to manage costs. The company has been doing a great job cutting expenses and boosting efficiencies. Through the first half of 2015 CLR has managed to reduce their costs by -20%. They see further efficiencies throughout 2015 and just lowered their estimated cost per barrel of oil by another $1.00.

When oil finally finds a bottom CLR should be a winner. Unfortunately, in the meantime, investors are selling everything in the oil business. CLR's high debt load, about $7 billion, is a negative. Bulls can argue that yes, CLR has high debt, but none of it is due until 2019. Hopefully by then crude oil will have recovered.

The challenge is that crude oil may not recover any time soon. There is a growing camp of analysts forecasting oil in the $30s for much of 2016. That's bad news for CLR. The company's CEO Harold Hamm said if crude oil is under $50 a barrel they will have cash flow issues (outspending their cash inflow).

Technically the trend for CLR's stock is down. Shares of CLR have declined toward major support near $30.00. A breakdown here would be very bearish. A drop under $30.00 would also generate a new sell signal on the point & figure chart.

My biggest concern is volatility in the stock. There are already a lot of investors who are bearish on CLR. The company has 370 million shares outstanding but only 82 million shares in their float. The most recent data listed short interest at 18% of the float. Traders may want to use options to limit their risk. Tonight I am suggesting a trigger to open bearish positions at $29.85.

- Suggested Positions -

Short CLR @ $29.85

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

Long DEC $28 PUT (CLR151218P28) entry $3.40

08/24/15 new stop @ 29.65
08/21/15 triggered @ $29.85
Option Format: symbol-year-month-day-call-strike


FMC Technologies - FTI - close: 28.99 change: -1.02

Stop Loss: 30.15
Target(s): To Be Determined
Current Gain/Loss: +7.4%
Entry on August 20 at $31.30
Listed on August 19, 2015
Time Frame: Exit PRIOR to earnings on October 20th
Average Daily Volume = 3.1 million
New Positions: see below

Comments:
08/24/15: Shares of FTI ricocheted between its morning low near $28.00 and potential resistance at $30.00. Tonight we are adjusting the stop loss down to $30.15.

No new positions at this time.

Trade Description: August 19, 2015:
The sell-off in energy stocks is heating up again. We are hearing more and more analysts calls for crude oil to fall into the low $30s. Today WTI crude oil closed at $40.66 a barrel. That's after a more than -55% drop from its 2014 highs.

FTI is in the basic materials sector. They're part of the oil services industry and stocks in this group tend to be more volatile than the larger integrated oil names. According to the company, "FMC Technologies, Inc. (FTI) is the global market leader in subsea systems and a leading provider of technologies and services to the oil and gas industry. We help our customers overcome their most difficult challenges, such as improving shale and subsea infrastructures and operations to reduce cost, maintain uptime, and maximize oil and gas recovery."

Like most oil-related businesses FTI has seen its revenues decline as oil companies cut back. FTI reported its Q2 results on July 21st. Net income fell -52% with a profit of $0.52 a share. That was 9 cents worse than expected. Revenues were down -14.6% to $1.7 billion, which was relatively in-line with estimates.

Management said their land technologies business saw sales fall -29% and its energy infrastructure business retreat -32%. Their subsea business only fell -7%. However, FTI management announced they were cutting their workforce in the subsea business. Ocean floor drilling is really expensive and FTI probably sees fewer jobs in the near future as major oil companies cut their capex budgets.

Shares of FTI plunged -10% following its earnings report. Yet there was little follow through lower. FTI spent almost three and a half weeks consolidating sideways in the $32.00-34.00 range. That changed today. The oil-sector weakness today sparked a bearish breakdown in FTI that pushed the stock below its trading range.

We suspect that FTI has just launched into its next leg lower. If $30.00 does not hold as support the next support level could be $25 or $22. The point & figure chart is bearish and forecasting a long-term target of $20.00. Today's low was $31.45. I'm suggesting a trigger to open bearish positions at $31.30.

- Suggested Positions -

Short FTI @ $31.30

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

Long OCT $30 PUT (FTI151016P30) entry $1.40

08/24/15 new stop @ 30.15
08/22/15 new stop @ 31.55
08/20/15 triggered @ $31.30
Option Format: symbol-year-month-day-call-strike


Marathon Oil Corp. - MRO - close: 14.39 change: -1.34

Stop Loss: 15.55
Target(s): To Be Determined
Current Gain/Loss: +19.2%
Entry on August 14 at $17.80
Listed on August 13, 2015
Time Frame: Exit
Average Daily Volume = 7.8 million
New Positions: see below

Comments:
08/24/15: Shares of MRO were also downgraded this morning. The stock opened lower at $14.51. The intraday bounce failed at $15.24. We are adjusting the stop loss down to $15.55.

No new positions at this time.

Trade Description: August 13, 2015:
Falling crude oil prices are crushing oil-sector stocks. A -50% drop in crude oil that began in the second half of 2014 was horrendous for the U.S. and global oil industry. Oil managed a bounce off its March 2015 lows but that rebound has failed.

Since late June the price of oil has fallen about -30%. Today saw crude oil close near $42.00 a barrel, the lowest since March 2009 (during the bear market in stocks).

Shares of MRO are getting hammered on this oil slide. According to the company, MRO is a global energy company. They explore for, produce, and market oil and natural gas. They are also involved in the oil sands mining in Canada and the big shale oil and gas basins in the United States. The company has operations in Angola, Equatorial Guinea, Ethiopia, Gabon, Kenya, Libya, Norway, the United Kingdom, and the Kurdistan region of Iraq.

There are a ton of factors impacting crude oil and the energy sector. OPEC's largest producer, Saudi Arabia, has decided keep production high. They would rather suffer low oil prices than lose market share to rival producers.

According to CNBC today, "OPEC's second-largest producer, Iraq, plans to export near-record volumes of Basra crude in September, adding to an already oversupplied market." Plus, "The U.S. Energy Information Administration also said on Thursday that Iran's release of oil held in storage could boost global supplies by 100,000 barrels per day this year, and that it had the 'technical capability' to boost output by 600,000 bpd by the end of next year."

If that wasn't enough the recent focus on China is undermining oil prices. China is one of the largest, if not the largest, consumer of commodities on the planet. Their economy has been slowing down for years. The central bank of China's decision to devalue their currency this week stokes fears that China's economy is falling even faster than previously expected. That doesn't bode well for China's future oil demand.

Meanwhile back at home in the U.S. we see crude oil inventories building. Wall Street is worried that domestic oil companies have not cut their spending budgets enough. There is growing concern that MRO may have to slash its dividend. The plunge in MRO's stock price has boosted its dividend yield to more than 4%.

A quick look at MRO's last few earnings reports shows the trend in revenues. Their Q3 2014 results saw revenues fall -5%. Q4 results saw revenues drop -16% from the prior year. Their Q1 2015 report said revenues plunged -46%. Their most recent report, their Q2 report on August 5th, said MRO's revenues dropped -47.9% to $1.53 billion. The company reported a loss of ($0.23) per share. Management has been slashing their budgets and cutting expenses but it wasn't enough.

The last few days have seen MRO's stock hovering above short-term support at $18.00. Unfortunately today's drop (-5.45%) left shares poised for a breakdown. Tonight we are suggesting a trigger to launch bearish positions at $17.80. We're not setting a target tonight but I will point out that the point & figure chart is bearish and forecasting at $5.00 target.

FYI: MRO does have a 21-cent dividend coming up. The stock will trade ex-dividend in the August 17-19th time frame.

- Suggested Positions -

Short MRO stock @ $17.80

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

Long OCT $17 PUT (MRO151016P17) entry $1.03

08/24/15 new stop @ 15.55
08/22/15 new stop @ 17.05
08/19/15 new stop @ 18.15
08/17/15 began trading ex-dividend today ($0.21)
08/14/15 triggered @ $17.80
Option Format: symbol-year-month-day-call-strike


Micron Technology - MU - close: 14.44 change: -0.09

Stop Loss: 15.65
Target(s): To Be Determined
Current Gain/Loss: +5.9%
Entry on August 20 at $15.35
Listed on August 18, 2015
Time Frame: Exit prior to earnings in late September.
Average Daily Volume = 28.4 million
New Positions: see below

Comments:
08/24/15: I am urging caution on our MU trade. The stock market is in crash mode and MU only lost -0.6% today. That compares to a -3.9% drop in the NASDAQ composite. The SOX semiconductor index lost -2.0%.

Traders bought the dip in MU at $13.50 this morning. The bounce failed near recent resistance in the $15.40 area. Tonight we are adjusting the stop loss down to $15.65.

No new positions at this time.

Trade Description: August 18, 2015:
The tech-heavy NASDAQ composite index is up +6.8% in 2015. Yet a key technology industry the semiconductor stocks are underperforming. The SMH semiconductor ETF is down -8.2% and the SOX semiconductor index is off -9.1% The group is suffering from what one analyst says is an uncertain macroeconomic environment, currency headwinds, and rising competition. One semiconductor stock significantly underperforming its peers is MU, which is down -53% year to date.

If you're not familiar with the company, here's a bit from their press release, "Micron Technology, Inc., is a global leader in advanced semiconductor systems. Micron's broad portfolio of high-performance memory technologies - including DRAM, NAND and NOR Flash - is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications."

MU sparked new concerns after their recent analysts day. The company announced plans to boost their 2016 capex budget by +45% more than 2015's. The company is forecasting a 2016 budget of $5.3-to-$5.8 billion and analysts are worried it's going to hurt their financial results.

Wedbush Securities analyst Betsy Van Hees said, "While we believe [Micron] is laying the right ground work with capex spend for long-term success, until we see signs that DRAM industry supply/demand environment is stabilizing, shares will likely continue to struggle." Van Hees downgraded shares of MU from outperform to a neutral.

Bank of America Merrill Lynch analyst Simon Dong-Je Woo was also cautious on the memory chip sector. Woo is worried that rising capex spending will be a short-term negative. He downgraded MU from a buy to a neutral.

Not everyone agrees. The research team at Wells Fargo actually upgraded MU from an underperform to a market perform. Bulls could argue that MU's stock looks cheap with a P/E ration around 5. However, even CNBC's Jim Cramer warned that cheap stocks tend to stay cheap for a while.

Momentum is bearish and MU underperformed the market today with a -4.8% drop to new multi-year lows. We are suggesting a trigger to launch bearish positions at $15.85.

- Suggested Positions -

Short MU stock @ $15.35

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

Long OCT $15 PUT (MU151016P15) entry $1.26

08/24/15 new stop @ 15.65
08/22/15 new stop @ 16.15
08/20/15 Triggered on gap down at $15.35, suggested entry was $15.85


Whiting Petroleum - WLL - close: 14.91 change: -0.93

Stop Loss: 16.25
Target(s): To Be Determined
Current Gain/Loss: +24.9%
Entry on August 03 at $19.85
Listed on August 01, 2015
Time Frame: Exit PRIOR to earnings
Average Daily Volume = 7.1 million
New Positions: see below

Comments:
08/24/15: WLL also had a rough start to its day with another analyst downgrade. Shares were cut to a neutral after an 12-month plunge from $92 to $15 (nice job, analyst!).

WLL dipped to $13.50 intraday. The bounce pared its loss to -5.8% by the close. Tonight we are moving the stop loss down to $16.25.

No new positions.

Trade Description: August 1st, 2015:
The price of crude oil has fallen more than 50% in the last year. It's wreaking havoc on energy company earnings and revenues. Unfortunately the outlook is not very bullish. The global economy is stalling. China, the biggest buyer of commodities, is growing at multi-year lows. The U.S. is creeping along at +2% GDP growth while oil inventories in the U.S are near 80-year highs.

The Middle East OPEC cartel is pumping a high-volume of oil, regardless of price declines, to maintain market share. A recent report showed that OPEC boosted production by +140,000 barrels a day in July from its June production. OPEC is hoping to pressure the U.S. fracking industry out of business but it's not working. U.S. production remains resilient and near record highs.

If that wasn't enough the Federal Reserve is desperate to raise interest rates and would like to raise in September. Rising interest rates usually boost a country's currency. If the Fed does raise rates the U.S. dollar should rally even further. A rising dollar puts downward pressure on commodity prices. This paints a bearish picture for crude oil prices.

Given this outlook for crude we're adding a bearish play in the energy industry. Some view WLL as a barometer of the U.S. shale oil and gas industry. If that's the case the stock price is suggesting a dire forecast.

WLL is in the basic materials sector. According to the company, "Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain and Permian Basin regions of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota, the Niobrara play in northeast Colorado and its Enhanced Oil Recovery field in Texas."

WLL just reported its Q2 earnings on July 29th. Analysts were only expecting a profit of $0.02 per share. WLL delivered $0.04. However, that's a -97% drop from a year ago. Revenues plunged -29.4% to $590 million, which was significantly below analysts' estimates of $677 million.

We have to give the company credit for cutting costs dramatically during a tough time in the oil industry. Otherwise they would not have managed a profit for the quarter. WLL also managed to set a new company record for production of 170,000 barrels a day in the second quarter. Unfortunately, these positives are not enough to outweigh the overall bearish impact of plunging oil prices.

Plus, investors and analysts might shun WLL as the company is sending mixed messages. The company claimed that based on strong results during the second quarter they were raising their capex budget from $2 billion to $2.3 billion. That was two weeks ago. This past week WLL has already cut its capex budget. Now they're forecasting $2.15 billion. They only plan on running eight drilling rigs in the second half of 2015 instead of their previous guidance of 11 rigs.

Wall Street is turning more cautious on WLL. The stock has seen several downgrades and lowered price targets recently. The stock has been very weak. Momentum is bearish. The oversold bounce last week just failed under technical resistance at its simple 10-dma. Now WLL is testing round-number resistance at $20.00. We are suggesting a trigger to launch bearish positions at $19.85.

- Suggested Positions -

Short WLL stock @ $19.85

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

Long SEP $20 PUT (WLL150918P20) entry $2.05

08/24/15 new stop @ 16.25
08/22/15 new stop @ 18.05
08/05/15 new stop @ 20.35
08/05/15 new stop @ 21.25
08/03/15 triggered @ $19.85
Option Format: symbol-year-month-day-call-strike



CLOSED BULLISH PLAYS

Bright Horizons Family Solutions - BFAM - close: 59.34 change: -2.10

Stop Loss: 59.75
Target(s): To Be Determined
Current Gain/Loss: -5.7%
Entry on August 19 at $63.05
Listed on August 17, 2015
Time Frame: Exit prior to earnings in November
Average Daily Volume = 176 thousand
New Positions: see below

Comments:
08/24/15: The market collapse on Monday was too much for BFAM. Shares broke down below support near $60 and its 50-dma. Overall the stock is still holding up better than the broader market but our trade was closed today. We had a stop loss at $59.75 and BFAM gapped open lower at $59.43.

- Suggested Positions -

Long BFAM stock @ $63.05 exit $59.53 (-5.7%)

08/24/15 stopped out on gap down at $59.43
08/19/15 Triggered @ $63.05

chart:


SPDR S&P Homebuilder ETF - XHB - close: 35.64 change: -1.63

Stop Loss: 35.25
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on August -- at $---.--
Listed on August 22, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 3.3 million
New Positions: see below

Comments:
08/24/15: Wow! You don't see days like today very often. The trading in XHB was unreal. Shares gapped down at $35.23 and plunged to $31.70 this morning. That means this ETF was down -14.9% intraday. Shares rallied back up to $36.72 midday before rolling over again.

Our plan was to launch bullish positions on a dip at $36.75 with a stop at $35.25. The XHB completely jumped past both.

We are removing the XHB as a trading candidate.

Trade did not open.

08/24/15 removed from the newsletter. Suggested entry was $36.75
Option Format: symbol-year-month-day-call-strike

chart: