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Call Updates

Intl. Bus. Mach. - IBM - cls: 128.86 chg: +1.20 stop: 124.95

IBM is looking a little stronger today with a 0.9% gain and a close back above its 10-dma. This could be used as another bullish entry point or more conservative readers can wait for a new relative high. 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: - 1.39
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 7.7 million
 

Put Updates

Freddie Mac - FRE - close: 8.73 change: +0.31 stop: n/a

Financials stocks rallied again this morning but the strength in FRE was fading before the day was out. Volume was very low on today's bounce, which does not communicate any strength. This may prove to be another entry point for puts. 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: - 0.45
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: 159.88 chg: +2.80 stop: n/a

AAPL managed to put together back-to-back gains but the trend of lower highs remains intact. 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: - 5.27
Earnings Date 07/21/08 (confirmed)
Average Daily Volume = 31.7 million

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Popular Inc. - BPOP - close: 7.09 change: +0.09 stop: n/a

BPOP produced a meager bounce on Wednesday. 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: + 1.27
Earnings Date 07/18/08 (confirmed)
Average Daily Volume = 3.4 million

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DIAMONDS - DIA - close: 115.82 chg: +1.97 stop: n/a

The DIA actually out performed the index it is supposed to mimic: the Dow Jones Industrial Average. Shares of the DIA soared 1.7% and closed at its very best levels of the day. This is normally a bullish sign for the next trading session. 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: + 3.61
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 Bovespa index delivered a huge +3.3% oversold rebound today. This fueled a 4.9% bounce in the EWZ. This ETF is back above potential resistance at $80.00 but still under its mid-July highs and under its 200-dma. 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: 59.60 chg: +2.95 stop: n/a

The oversold bounce in FWLT continues for the fourth day in a row. The stock added more than 5% and challenged round-number resistance at $60.00 before the day was done. 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: - 1.64
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 2.5 million

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Corning Inc. - GLW - close: 20.47 chg: -0.85 stop: n/a

Investors were not impressed with GLW's earnings report. The results were inline and estimates failed to spark any new interest. The stock lost about 4% on strong volume. Management did announce a buy back program of "$1 billion of common stock between now and the end of 2009. This is in addition to last year's $500 million repurchase authorization of which $125 million remains" (source: GLW). Today's lack of a +/-10% move or more in the stock price is not good news for this strangle play. More conservative traders may want to exit early. We are not suggesting new strangle positions. 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: + 0.31
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million

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Google Inc. - GOOG - close: 482.70 chg: - 0.41 stop: n/a

There is no real change in GOOG today. The stock continues to under perform. 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: -52.90
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 4.5 million

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Internet Holders - HHH - cls: 49.64 change: -0.21 stop: n/a

The lack of movement in the HHH is killing us. At this point I would expect the strangle to expire. If shares move enough to lift one side of this play back to $1.50 or breakeven at $1.65 I would exit! 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 $1.50 or higher!

Picked on July 03 at $ 50.50
Change since picked: - 0.86
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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Lehman Brothers - LEH - close: 18.23 chg: +1.35 stop: n/a

LEH coughs up an 8% bounce but on very low volume. We're not suggesting new positions at this time. 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: + 1.18
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million

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Legg Mason - LM - close: 40.22 chg: +0.47 stop: n/a

It's been one week and we're right back to where we started. If you wanted to consider new strangles this is the spot to do it but keep in mind we have less than two-and-a-half weeks left before August options expire. 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: + 0.02
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 3.1 million

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MarketVectors Agribusiness- MOO - close: 57.40 chg: +2.10 stop: n/a

The agribusiness sector rallied on Wednesday and the MOO added more than 3% to breakout over its 200-dma. Today's gain is also a breakout over its three-week trendline of lower highs. You may also notice that the MACD on the daily chart has turned bullish again. 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: + 0.15
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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Netflix - NFLX - close: 30.53 change: -0.51 stop: n/a

NFLX failed to see any more follow through on yesterday's short covering rally. Don't be surprised to see shares pull back and retest $30.00 or its 50-dma around $29.60. 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: + 2.55
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 1.3 million

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PowerShares QQQ - QQQQ - cls: 45.57 chg: +0.23 stop: n/a

The Qs remain stuck in their trading range. The way shares are coiling under resistance near $46.00 it looks like a potential breakout brewing but that breakout has failed several times this month. 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: + 0.67
Earnings Date 00/00/00
Average Daily Volume = 148 million

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Starbucks - SBUX - close: 14.67 change: -0.32 stop: n/a

SBUX reported earnings after the closing bell and the company missed estimates by 2 cents. Looking at its earnings history this appears to be the company's first time to ever post a loss. The stock was actually trading higher after hours, around $15.30, in a relief rally that the results weren't worse. If SBUX doesn't see a significant 8%-10% move tomorrow more conservative traders will want to consider an early exit. We are not suggesting new strangles. 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: + 1.08
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 million

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UBS Ag - UBS - close: 19.46 change: +0.47 stop: n/a

UBS bounced with the financials on Wednesday. We don't see any changes from our prior comments. 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: - 0.03
Earnings Date 08/12/08 (unconfirmed)
Average Daily Volume: 7.3 million

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Washington Mutual - WM - close: 4.74 chg: +0.31 stop: n/a

WM also rebounded with the financials on Wednesday. Volume continues to be strong. We don't see any changes from our previous comments. 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: - 1.17
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 57 million

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Valero Energy - VLO - close: 35.16 chg: +1.83 stop: n/a

It was shocking to see the refiners rising as crude oil posted a big bounce today. Normally the market sees rising oil prices as putting pressure on the refiners' margins. VLO managed a 5.5% gain. 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: + 3.28
Earnings Date 07/29/08 (confirmed)
Average Daily Volume = 12.7 million
 

Dropped Calls

Burlington Northern - BNI - cls: 105.50 chg: +4.35 stop: 95.90

Target exceeded! Railroad stocks continued to steam higher and shares of BNI vaulted past potential technical resistance at the 50-dma. The intraday high was $105.76. Our target was $104.75. Shares of BNI are arguably short-term overbought. Watch for a dip back toward the $100 region, which might be a new entry point for longs again. FYI: The Point & Figure chart is bullish with a $119 target.

Picked on July 27 at $ 98.05 /target exceeded 104.75
Change since picked: + 7.45
Earnings Date 07/24/08 (confirmed)
Average Daily Volume = 3.9 million

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SPDR Gold Shares - GLD - cls: 89.52 chg: -1.07 stop: 89.95

We turned a lot more cautious yesterday with GLD's drop back toward $90.00. Another gain in the U.S. dollar pushed gold lower and the precious metal dropped under $900/ounce. That drug the GLD lower, which actually gapped open at $88.83. Unfortunately, that was under our suggested stop loss at $89.95 and thus widened our potential loss.

Picked on July 24 at $ 91.33 /gap down exit 88.83
Change since picked: - 1.81
Earnings Date 00/00/00
Average Daily Volume = 12 million
 

Dropped Puts

Alliant Tech.- ATK - close: 100.25 chg: +1.10 stop: 101.75

The action in shares of ATK today was too bullish. The stock is still inside its bearish channel but short-term it looks like ATK is poised to breakout very soon. We're suggesting an early exit right here to keep losses at a minimum. More nimble traders may want to consider bullish strategies over $102 just be aware of all the technical resistance overhead.

Picked on July 27 at $ 99.33 /early exit 100.25
Change since picked: + 0.92
Earnings Date 08/07/08 (confirmed)
Average Daily Volume = 307 thousand
 

Dropped Strangles

None
 

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