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Call Updates

Burlington Northern - BNI - cls: 101.15 chg: +4.41 stop: 95.90*new*

Transports were a big part of the market's rally on Tuesday, behind the amazing pop in the financials. The Dow Jones Transportation index rallied 4.4%. The Dow Jones Railroad index rallied 5.2%. BNI paced the $TRAN with a 4.5% gain. Furthermore today's rally in BNI is another breakout over its 100-dma and the $100.00 level. We are upping the stop loss to $95.90. There is potential technical resistance at the 50-dma. Our target is the $104.75 mark. FYI: The Point & Figure chart is bullish with a $119 target but there is resistance near $102.

Picked on July 27 at $ 98.05
Change since picked: + 3.10
Earnings Date 07/24/08 (confirmed)
Average Daily Volume = 3.9 million

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SPDR Gold Shares - GLD - cls: 90.59 chg: -1.14 stop: 89.95

Honestly, I am amazed that gold did not trade lower than it did today and I'm surprised that the GLD did not breakdown under $90.00. The intraday low was $90.09. The market rally and the big rise in the U.S. dollar should have been enough to push GLD lower but this gold ETF held on to support. That doesn't mean that support won't break tomorrow, especially if the dollar continues to rise. As long as the $90.00 level holds we'll keep the play open but more conservative traders will want to seriously consider an early exit right here. We're not suggesting new positions. We're aiming for a bounce back to $94.90. More aggressive traders may want to aim higher.

Picked on July 24 at $ 91.33
Change since picked: - 0.74
Earnings Date 00/00/00
Average Daily Volume = 12 million

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Intl. Bus. Mach. - IBM - cls: 127.66 chg: +1.41 stop: 124.95

IBM delivered a 1% bounce but that under performed the strength on the NYSE and the NASDAQ and the rest of the tech sector. The rebound stalled at IBM's 10-dma. Readers may want to wait for a new move over $128.50 before initiating positions. A bounce near $125 and the 50-dma would still look like a potential entry point. 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: - 2.59
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 7.7 million
 

Put Updates

Alliant Tech.- ATK - close: 99.15 chg: +0.55 stop: 101.75

The DFI defense index delivered a 1.7% bounce on Tuesday. ATK is still under performing its peers and the market with a 0.5% gain. The trend remains bearish but wait for the rebound to roll over before opening new positions. The $100-101 zone is resistance at the top of its bearish channel. We are aiming for $95.25. More aggressive traders could aim lower. The Point & Figure chart is bearish with a $78 target. We do not want to hold over the August 8th earnings report. This could be considered a higher-risk more aggressive play because the spreads on the options are a little too wide!

Picked on July 27 at $ 99.33
Change since picked: - 0.18
Earnings Date 08/07/08 (confirmed)
Average Daily Volume = 307 thousand

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Freddie Mac - FRE - close: 8.42 change: +0.70 stop: n/a

A strong rally in the financial sector lifted troubled shares of FRE. The stock gained 9% but that's barely a blip these days given FRE's volatility. We're not suggesting new put positions at this time. We consider this a lottery-ticket style of play. The put option is our ticket. If we win, we should win big. If we lose, we lose it all. Thus we're not playing with a stop loss. More conservative traders may want to play with a stop anyway. Our short-term target would be a move back to $5.00. More aggressive traders may want to aim lower. FYI: FRE will be presenting at a conference on July 28th.

Picked on July 20 at $ 9.18
Change since picked: - 0.76
Earnings Date 08/06/08 (confirmed)
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: 157.08 chg: +2.68 stop: n/a

AAPLL did bounce along with the market's rally but shares stalled out near $159.50 and were trimming their gains by the closing bell. The stock is not acting very strong. We are not 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: - 8.07
Earnings Date 07/21/08 (confirmed)
Average Daily Volume = 31.7 million

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Popular Inc. - BPOP - close: 7.00 change: +0.66 stop: n/a

The huge rally in the financials was good for a 10% gain in BPOP. We are not suggesting new strangle plays on BPOP. 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: + 1.18
Earnings Date 07/18/08 (confirmed)
Average Daily Volume = 3.4 million

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DIAMONDS - DIA - close: 113.85 chg: +2.51 stop: n/a

The DIA posted a 2.2% gain and closed near its highs for the session, which tends to be a bullish sign for the next trading day. We are not suggesting new strangles on the DIA. 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: + 1.64
Earnings Date 00/00/00
Average Daily Volume = 15.5 million

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iShares Brazil - EWZ - cls: 78.55 chg: +1.41 stop: n/a

The Brazilian ETF ended the day with a 1.8% gain. Shares look poised to challenge what should be resistance near $80 soon. We're not suggesting new positions at this time. 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: - 4.51
Earnings Date 00/00/00
Average Daily Volume = 13.6 million

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FosterWheeler - FWLT - close: 56.65 chg: +1.48 stop: n/a

FWLT enjoyed a nice bounce on Tuesday. The stock constructed a 2.7% gain but continues to have trouble with its 10-dma. If the market rallies again tomorrow then we could see FWLT breaking out past the trendline of lower highs. I repeat that more conservative traders may want to hit the eject button now. 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: - 4.59
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 2.5 million

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Corning Inc. - GLW - close: 21.32 chg: +0.52 stop: n/a

GLW gapped open higher and rallied to $21.55 intraday. Tomorrow is a big day for the company when they report earnings before the opening bell. Wall Street estimates are at $0.49/share but investors really want to hear their comments and guidance going forward. If GLW doesn't see a big move on the earnings news traders will want to consider an early exit! 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: + 1.16
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million

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Google Inc. - GOOG - close: 483.11 chg: + 5.99 stop: n/a

Traders should find it very interesting that GOOG is under performing the market. The stock only added 1.1% and didn't even challenge the simple 10-dma overhead while the rest of the market was in rally mode. 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: -52.49
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 4.5 million

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Internet Holders - HHH - cls: 49.85 change: +1.16 stop: n/a

The HHH Internet HLDRS rose 2.3% but failed to breakout over $50.00. That could change tomorrow if the markets continue to rally. We are not suggesting new positions at this time. 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: - 0.65
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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Lehman Brothers - LEH - close: 16.88 chg: +1.61 stop: n/a

A 10% move in LEH is becoming rather common place these days. Shares bounced to a 10.5% gain thanks to the bullish turnaround in financials today. The overall trend remains very bearish. If you wanted to consider new strangle positions LEH isn't very far from where we started so this would be the place to do it. The options we suggested were the September $24.00 calls (LYH-IR) and the September $10.00 puts (LYH-UB). Our estimated cost is $2.15. We want to sell if either option hits $3.50 or higher.

Picked on July 27 at $ 17.05
Change since picked: - 0.17
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million

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Legg Mason - LM - close: 39.75 chg: +4.20 stop: n/a

Shares of LM also whipsawed higher with an 11.8% gain that managed to erase Monday's losses. We're not suggesting new positions but if you wanted to reconsider a new strangle then right around the $40.00 mark is the place to do it. All this volatility is going to make the options more expensive. The options we listed were the August $45 calls (LM-HW) and the August $35 puts (LM-TG). Our estimated cost was $3.15. We want to sell if either option hits $4.85 or more.

Picked on July 23 at $ 40.20
Change since picked: - 0.45
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 3.1 million

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MarketVectors Agribusiness- MOO - close: 55.30 chg: +0.30 stop: n/a

The MOO is not moving enough for our strangle play. We strongly suggest that more conservative traders consider an early exit and abandon ship! 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: - 1.95
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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Netflix - NFLX - close: 31.04 change: +2.41 stop: n/a

Alert! Looks like we have a short-squeeze in progress with NFLX. The stock soared 8.4% and broke through resistance near $30.00 and its 50-dma. Volume was well above average. We're not suggesting new strangles at this time. The options we suggested were the August $32.50 calls (QNQ-HT) and the August $22.50 puts (QNQ-TX). Our estimated cost is $1.20. We want to sell if either option hits $2.20 or more.

Picked on July 23 at $ 27.98
Change since picked: + 3.06
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 1.3 million

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PowerShares QQQ - QQQQ - cls: 45.34 chg: +0.92 stop: n/a

More of the same... the QS are making big moves but they just keep churning in the same range. We are not suggesting new strangles and more conservative traders will want to consider closing this play. 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: + 0.44
Earnings Date 00/00/00
Average Daily Volume = 148 million

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Starbucks - SBUX - close: 14.99 change: +0.76 stop: n/a

Shares of SBUX spiked higher early this morning on some positive analyst comments. Shares trimmed their gains and ended with a 5.3% rise. Tomorrow the company reports earnings after the closing bell. Readers looking to speculate on the earnings report could open new strangles before Wednesday's closing bell. If you are opening new positions you may want to use different strike prices. 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: + 1.41
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 million

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UBS Ag - UBS - close: 18.99 change: -0.16 stop: n/a

It had to be a frustrating day for UBS bulls. The BKX banking index rallies 8.7% and the BIX index soared 9.3% yet UBS actually posted a loss. My first thought was that European markets were to blame since UBS is based in Switzerland but most of the European markets recovered from their lows of the day. UBS recovered as well but not enough to turn positive. Volume was really picking up heading into the closing bell. 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: - 0.50
Earnings Date 08/12/08 (unconfirmed)
Average Daily Volume: 7.3 million

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Washington Mutual - WM - close: 4.43 chg: +0.49 stop: n/a

WM cashed in a 12.4% gain as financials led the market higher. We're not suggesting new strangle positions at this time. A few days ago the situation looked pretty bleak for WM but investors might be tempted to buy WM here in the single digits. A lot of investors would be tempted to buy WM as a speculative "it can't get much worse" kind of trade. In the low single digits a lot of traders could see WM as a long-term call option that doesn't expire with unlimited upside. That doesn't mean that WM can't go lower but it's going to be more challenging to see new lows. 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 $1.95 or more.

Picked on July 20 at $ 5.92
Change since picked: - 1.48
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 57 million

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Valero Energy - VLO - close: 33.33 chg: +1.52 stop: n/a

VLO reported earnings today and the company beat estimates by 4 cents. Expectations were pretty negative for VLO and the refiners. Investors remain worried about margins but VLO saw revenues explode higher with a 50% gain. The stock managed a 4.7% gain. That wasn't the huge move we were expecting from VLO so more conservative traders will want to strongly consider an early exit right now to cut their losses. We're going to wait a couple of days to see if there is any follow through on VLO's bounce. We are no longer suggesting new strangle positions. The options we suggested were the August $37.50 calls (VLO-HU) and the August $27.50 puts (VLO-TS). Our estimated cost is $1.38. We want to sell if either option hits $2.25 or higher.

Picked on July 27 at $ 31.88
Change since picked: + 1.45
Earnings Date 07/29/08 (confirmed)
Average Daily Volume = 12.7 million
 

Dropped Calls

Fording Cand. - FDG - close: 89.00 change: +6.51 stop: 78.49

Target not quite achieved. This morning before the opening bell it was announced that Teck Cominco was making a $13.9 billion bid to buy all of FDG's assets. More than $12 billion of the deal is cash. Shares of FDG gapped open higher on the news at $88.30 and traded to $89.46 before closing with a 7.8% gain. Our target was $89.50. We're suggesting readers exit now. The stock might fluctuate as the deal gets reviewed and approved but the option premiums are going to deflate since there is now limited upside for FDG given the buy out offer. The only thing that would change that is some sort of news or expectation for another bidder to make a higher offer. We're suggesting readers take their money and walk away.

Picked on July 28 at $ 81.75 *triggered
Change since picked: + 7.25
Earnings Date 07/23/08 (confirmed)
Average Daily Volume = 2.7 million

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United States Oil - USO - cls: 98.04 chg: -2.50 stop: 97.45

A rally in the U.S. dollar helped fuel the profit taking in crude oil today. Oil sank sharply at the open and the USO broke down under technical support at its 100-dma. This oil ETF hit our stop loss at $97.45. Oil remains short-term oversold and due for a bounce but bulls have been getting burned trying to buy the dip.

Picked on July 24 at $101.46 /stopped out 97.45
Change since picked: - 3.42
Earnings Date 00/00/00
Average Daily Volume = 14.6 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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