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Call Updates

Intl. Bus. Mach. - IBM - cls: 129.52 chg: -0.48 stop: 124.95

A morning spike to $130.33 was enough to hit our trigger point and open this call play on IBM. The failure to hold its gains over $130.00 is short-term bearish and could be seen as a "failed" rally. Yet traders were buying the dip intraday near $128.30. We would wait for another new relative high (130.35) before initiating new call positions. We have two targets. Our first target is $134.75. Our second target is $139.00. We are now suggesting the August or September calls.

Picked on July 23 at $130.25 *triggered
Change since picked: - 0.73
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 7.7 million
 

Put Updates

Freddie Mac - FRE - close: 10.80 change: +1.10 stop: n/a

FRE and FNM surged today on legislative news. The Congress passed a huge rescue bill for housing and the GSEs and the White House dropped their threat to veto it. The new bill provides emergency funding for FNM and FRE who underpin the U.S. mortgage market. Shares of FRE spiked higher at the open and then went flat but closed the day up 11.3%. At this point we'd wait for a new decline under $9.15 before considering new shorts. This remains a very aggressive play and we might regret not putting a stop loss on this lottery-ticket speculation. Our short-term target would be a move back to $5.00. More aggressive traders may want to aim lower.

Picked on July 20 at $ 9.18
Change since picked: + 1.62
Earnings Date 08/28/08 (unconfirmed)
Average Daily Volume = 45.5 million
 

Strangle Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

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Apple Inc. - AAPL - close: 166.26 chg: +4.24 stop: n/a

AAPL has now completely erased the post-earnings gap down. Where it goes from here is a good guess. There are still worries about the health of Steve Jobs and AAPL isn't doing a very good job of assuaging those fears but that's not stopping the bounce. We are no longer suggesting new strangle positions. The options we suggested were the August $180 calls (APV-HP) and the August $150 puts (APV-TJ). Our estimated cost is $8.90. We want to sell if either option hits $14.50 or more.

Picked on July 20 at $165.15
Change since picked: + 1.11
Earnings Date 07/21/08 (confirmed)
Average Daily Volume = 31.7 million

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Popular Inc. - BPOP - close: 7.36 change: +0.56 stop: n/a

BPOP rallied sharply again on Wednesday and out performed the financial sector with an 8.2% gain. The stock is now above potential resistance at the $7.00 level. We're no longer suggesting new plays. The options we listed were the August $7.50 calls (BQW-HU) and the August $5.00 puts (BQW-TA). Our estimated cost was $0.65. We want to sell if either option hits $1.45 or more.

Picked on July 16 at $ 5.82
Change since picked: + 1.54
Earnings Date 07/18/08 (confirmed)
Average Daily Volume = 3.4 million

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DIAMONDS - DIA - close: 116.23 chg: +0.53 stop: n/a

The DIA is still inching higher. The DJIA is getting closer to potential resistance in the 11,700-12,000 zone. The bounce could be running out of steam. We are not suggesting new strangles. The options we suggested were the August $115 calls (DIA-HK) and the August $109 puts (DIA-TE). Our estimated cost is $4.35. We want to sell if either option hits $6.90 or more.

Picked on July 07 at $112.21
Change since picked: + 4.02
Earnings Date 00/00/00
Average Daily Volume = 15.5 million

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iShares Brazil - EWZ - cls: 80.20 chg: -1.23 stop: n/a

The action in the EWZ over the last couple of days has grown more bearish. It looks like this ETF may break down from its consolidation pattern. We're not suggesting new positions at this time but with the EWZ so close to $80.00 readers may want to consider the August $85 call/$75 put strangle for an estimated cost of $2.75. The options we suggested back in early July were the August $90 calls (EWZ-HR) and the August $75 puts (EWQ-TO). Our estimated cost is $3.95. We want to sell if either option hits $5.90.

Picked on July 03 at $ 83.06
Change since picked: - 2.83
Earnings Date 00/00/00
Average Daily Volume = 13.6 million

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FosterWheeler - FWLT - close: 56.73 chg: -1.64 stop: n/a

Another down day for oil is weighing on FWLT. We are not suggesting new strangle positions in FWLT at this time. The options we suggested were the August $70 calls (UFB-HN) and the August $50 puts (UFB-TJ). Our estimated cost was $2.60. We want to sell if either option hits $4.00.

Picked on July 15 at $ 61.24
Change since picked: - 4.51
Earnings Date 08/06/08 (unconfirmed)
Average Daily Volume = 2.5 million

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Corning Inc. - GLW - close: 20.12 chg: +0.02 stop: n/a

We're not seeing any movement in GLW and that's bad news for our strangle play! We had previously suggested readers open strangle positions in the $20.25-19.75 zone. The options we suggested were the August $22.50 calls (GLW-HX) and the August $17.50 puts (GLW-TW). Our estimated cost is $0.75. We want to sell if either option hits $1.50. Try and keep your investment balanced on both sides of the trade.

Picked on July 10 at $ 20.16
Change since picked: - 0.04
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million

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Google Inc. - GOOG - close: 489.22 chg: +12.11 stop: n/a

GOOG posted a second day in its oversold bounce. It will be interesting to see if GOOG can rally over the $500.00 mark. We're not suggesting new strangle positions in GOOG at this time. The options we listed were the August $590 calls (GOO-HR) and the August $480 puts (GOP-TI). Our estimated cost was $19.10. We want to sell if either option hits $30.00 or more.

Picked on July 16 at $535.60
Change since picked: -46.38
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 4.5 million

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Internet Holders - HHH - cls: 48.56 change: +0.18 stop: n/a

The HHH spiked higher this morning but it failed near the trendline of lower highs. If we don't see another big move by the end of this week we're going to be considering an early exit! We are not suggesting new positions. The options we suggested were the August $55 calls (HHH-HK) and the August $45 puts (HHH-TI). Our estimated cost is $1.65. We want to sell if either option hits $2.45.

Picked on July 03 at $ 50.50
Change since picked: - 1.94
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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MarketVectors Agribusiness- MOO - close: 55.45 chg: -1.26 stop: n/a

Many of the fertilizer related stocks were down sharply today. Shares of the MOO rolled over and closed back under their 200-dma. We're not suggesting new positions at this time. The options we suggested were the August $62 calls (MYV-HJ) and the August $50 puts (MOO-TX). Our estimated cost is $2.10. We want to sell if either option hits $3.15.

Picked on July 03 at $ 57.25
Change since picked: - 1.80
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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PowerShares QQQ - QQQQ - cls: 45.37 chg: +0.59 stop: n/a

The Qs traded back toward short-term resistance near $46 on Wednesday. The NASDAQ-100 index acts like it wants to go higher. We're not suggesting new positions at this time. The options we suggested were the August $47 calls (QQQ-HU) and the August $43 puts (QQQ-TQ). Our estimated cost is $1.80. We want to sell if either option hits $2.75 or more.

Picked on July 07 at $ 44.90
Change since picked: + 0.47
Earnings Date 00/00/00
Average Daily Volume = 148 million

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Starbucks - SBUX - close: 15.42 change: +0.29 stop: n/a

SBUX spiked to $16.03 this morning but eventually trimmed its gains to close up 1.9%. The August $14 call hit $2.10 intraday. We warned readers yesterday that the $16.00 level was the next zone of overhead resistance. We are not suggesting new strangle positions at this time. The options we suggested for the strangle were the August $14.00 calls (SQX-HK) and the August $13.00 puts (SQX-TJ). Our estimated cost was $1.38. We want to sell if either option hits $3.50 or more.

Picked on July 15 at $ 13.58
Change since picked: + 1.84
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 million

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UBS Ag - UBS - close: 22.60 change: +0.18 stop: n/a

The rally in the financials seems to be slowing down. That's not a good sign with less than four weeks to go before August options expiration. If UBS doesn't clear the $23.25 level soon more conservative traders might want to consider an early exit. We're not suggesting new positions at this time. We listed two different strangles.

UBS Strangle #1) This uses the August $22.50 calls (UBS-HX) and $17.50 puts (UBS-TW). Our estimated cost was $1.90. We want to sell if either option hits $3.00.

UBS Strangle #2) This uses the August $25.00 calls (UBS-HE) and $15.00 puts (UBS-TC). Our estimated cost was $0.90. We want to sell if either option hits $1.90.

Picked on July 13 at $19.49
Change since picked: + 3.11
Earnings Date 08/12/08 (unconfirmed)
Average Daily Volume: 7.3 million

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Washington Mutual - WM - close: 4.65 chg: -1.17 stop: n/a

The last few days have been very volatile for WM and today was no exception. The stock hit $6.39 this morning and then fell off a cliff. The change from today's high is a 27% loss. Volume was huge at more than 207 million shares. That's approaching four times average volume on WM. We are not suggesting new positions at this time. The options we suggested were the August $8.00 calls (WM-HV) and the August $4.00 puts (WM-TH). Our estimated cost is $0.72. We want to sell if either option hits $2.25 or more.

Picked on July 20 at $ 5.92
Change since picked: - 1.27
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 57 million
 

Dropped Calls

CurrencyShares Euro - FXE - cls: 157.24 chg: -0.95 stop: 157.75

A rally in the U.S. dollar sent the Euro lower and the FXE broke down past the $158.00 level and hit our stop loss at $157.75. The next level of support for the Euro is the $156-156.50 zone. If the Euro breaks down under its rising 100-dma, it might be a bearish candidate.

Picked on July 21 at $159.35 /stopped out 157.75
Change since picked: - 2.11
Earnings Date 00/00/00
Average Daily Volume = 909 thousand
 

Dropped Puts

None
 

Dropped Strangles

Wachovia - WB - close: 17.65 change: +0.86 stop: n/a

We are suggesting readers exit their WB strangles immediately. WB was one of the exceptions in the financial sector today. The stock out performed most of its peers with a 5% gain and that was after it pared its intraday gains. Shares hit $19.55 intraday. The August $15 calls traded at $3.30 intraday and are currently at 3.20bid/3.40ask. Our target to exit was $3.50. While the option hasn't quite hit our target yet we'd rather take profits and run after the sharp pull back from the $20 level and WB's 50-dma. If you think the financials will continue to rally then you'll want to hold on to your calls. The options we suggested were the August $15.00 calls (WB-HC) and the August $10.00 puts (WB-TB). Our estimated cost is $2.00. We want to sell if either option hits $3.50 or more.

Picked on July 20 at $ 12.97 (exiting early, possible +65%)
Change since picked: + 4.68
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 64 million

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FinancialSector SPDR - XLF - cls: 22.46 chg: -0.03 stop: n/a

After a 37% rally off its July lows some are beginning to wonder if the bounce in the financials is starting to fail. The August $21 calls hit an intraday high of $2.52 and they're currently trading around $1.98bid/$2.16ask. That's still a 62% gain on the play. I strongly suggest that readers consider taking some profits here so we're closing the play early. If you think the financials will continue to rally then you'll want to keep your position open. The options we ended up with given the Monday, July 14th, morning open on the XLF were the August $21 calls (XLF-HU) and the August $17 puts (XJZ-TQ). Our estimated cost was $1.22. We want to sell if either option hits $2.85.

Picked on July 14 at $ 19.12 (exiting early, possible +60%)
Change since picked: + 3.34
Earnings Date 00/00/00
Average Daily Volume = 128 million
 

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