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Call Updates

Adobe Systems - ADBE - close: 43.53 chg: +0.19 stop: 39.99

Tech stocks continued to rally on Wednesday thanks to a strong earnings report from Cisco Systems. Shares of ADBE dipped to $42.61 before bouncing back into the green. We don't see any changes from our Tuesday comments. We would still consider new positions here but there still a good chance ADBE will see a larger dip before moving higher. Our preferred entry point would be to wait for a dip back toward $42.50 or $42.00. ADBE does have what could be significant resistance near $45.00. If the NASDAQ can keep the rally alive then we would expect ADBE to surge past the $45 mark. Our target is the $47.50-50.00 zone. More conservative traders may want to use a stop loss closer to $40.50 or $40.75.

Picked on August 05 at $ 43.34
Change since picked: + 0.19
Earnings Date 09/16/08 (unconfirmed)
Average Daily Volume = 6.5 million

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ArcelorMittal - MT - close: 84.82 change: +1.55 stop: 79.95

Steel makers continued to bounce and shares of MT added 1.8%. Volume was a little light but it is summer time. If MT were to pull back from here use a dip in the $83.00-82.00 zone as a new entry point. This is an aggressive, higher-risk play. There is no way to predict if the huge whipsaws are over. Our short-term target is the $88.50-90.00 zone. MT appears to have resistance near $90 and its 100-dma.

Picked on August 05 at $ 83.27
Change since picked: + 1.55
Earnings Date 11/13/08 (unconfirmed)
Average Daily Volume = 4.5 million

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Research In Motion - RIMM - cls: 127.30 chg: +5.32 stop: 118.45*new*

Some positive analyst comments helped lift RIMM to another 4% gain. The stock broke through technical resistance at its 100-dma and 50-dma. Volume actually came in above average. The intraday high was $128.93. Our first target is $129.00. More conservative traders might want to take some money off the table right here. We are raising our stop loss to $118.45. We have two targets. Our second target is $137.00.

Picked on July 31 at $120.50 *triggered
Change since picked: + 6.80
Earnings Date 09/25/08 (unconfirmed)
Average Daily Volume = 18.6 million

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CBOE Volatility Index - VIX - close: 20.23 chg: -0.91 stop: n/a

The VIX closed at a new six-week low. The downward trend in the VIX is potentially bullish for the stock market. Overall the current market rally looks like another bear-market bounce. We would consider buying calls on the VIX on a bounce in the 20.00-17.50 zone. Remember, this is a very speculative bet that the market will see a sharp sell-off before September's option expiration and that the VIX will surge toward 30 on the move. Our target is $29.75.

Picked on August 03 at $ 22.57
Change since picked: - 2.34
Earnings Date 00/00/00
Average Daily Volume = x million
 

Put Updates

Freddie Mac - FRE - close: 6.49 change: -1.55 stop: n/a

It was a really rough day for FRE. The stock is no stranger to big moves these days abut shares lost almost 20% following its earnings report. FRE's losses were three times more than expected. Wall Street was looking for minus 53 cents a share. FRE reported -$1.63 a share. The company also raised its reserves from $1.2 billion to $2.5 billion due to rising foreclosure rates. Management slashed their cash dividend from 25 cents to 5 cents a share.

There continues to be a lot of fear that if the government has to step in to save FRE (and FNM) the equity (stock holders) will be wiped out. FRE has issued several comments recently that they have more than their required reserves on hand to wade through this crisis. Yet there was a quote from FRE's CEO today that said, "There is a significant possibility that continued adverse developments...could cause us to fail to meet this standard" [of capital on hand]. Meanwhile fueling the fears that stock holders could get wiped out were comments from Armando Falcon, the former OFHEO director. Mr. Falcon said that he does not expect FNM and FRE to survive this housing crisis.

We are 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. Our short-term target would be a move back to $5.00. More aggressive traders may want to aim lower. We are thinking about moving the target closer to $4.00.

Picked on July 20 at $ 9.18
Change since picked: - 1.14
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 45.5 million

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VISA Inc. - V - close: 71.48 change: -2.12 stop: 72.55

Shares of Visa continue to under perform. The financial sector was only down about 1% today but V lost 2.8%. More aggressive and nimble traders may want to consider new bearish positions now with a stop loss above Tuesday's high. We are going to stick to our plan and wait for a breakdown under the bullish trend of higher lows. We're suggesting that readers buy puts on Visa if the stock trades at $69.45 or lower. If triggered we have two targets. Our first target is $65.25. Our second target is $61.00.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 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: 164.19 chg: +3.55 stop: n/a

AAPL continued to rebound but the bulls struggled to get AAPL above resistance near $165 and its 200-dma. The intraday high of $167.40 is a bad tick. If the stock starts to stumble here it might be a new entry point for directional put plays. The sad news is that this big two-day rally has killed our strangle play. We have less than two weeks before August options expire and need to see AAPL well above $180 or under $150. 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: - 0.96
Earnings Date 07/21/08 (confirmed)
Average Daily Volume = 31.7 million

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Popular Inc. - BPOP - close: 7.25 change: +0.16 stop: n/a

BPOP was creeping higher and out performed its peers in the financial sector. We don't see any changes from our weekend comments. More conservative traders may want to consider an early exit now. 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: + 1.43
Earnings Date 07/18/08 (confirmed)
Average Daily Volume = 3.4 million

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DIAMONDS - DIA - close: 116.49 chg: +0.48 stop: n/a

Today's lack of profit taking following yesterday's 300-point gain is a bullish sign for the DJIA. Yet the index couldn't get past its late July highs. We remain very cautious here. A move toward the 12,000 level in the DJIA might be enough to score a win with this strangle. More conservative traders need to strongly consider adjusting their exit target lower or closing the play early. With less than two weeks left before expiration we're moving our target to $5.35. We're not suggesting new strangle positions at this time. 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 $5.35 or more.

Picked on July 07 at $112.21
Change since picked: + 4.28
Earnings Date 00/00/00
Average Daily Volume = 15.5 million

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iShares Brazil - EWZ - cls: 77.50 chg: +1.63 stop: n/a

The Brazilian Bovespa index produced a strong 1.9% oversold bounce after its recent declines. The EWZ out paced the move with a 2% gain. The trend is lower and there is still a decent chance that the EWZ will be under $75 before option expiration. 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 (EWZ-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: - 5.56
Earnings Date 00/00/00
Average Daily Volume = 13.6 million

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FosterWheeler - FWLT - close: 56.61 chg: +6.03 stop: n/a

FWLT reported earnings this morning and beat estimates by 14 cents. Investor reaction was to cover their shorts and the stock soared almost 12% taking a huge chunk out of the recent sell-off. This is the worst possible move for us. We have less than two weeks before August options expiration and FWLT is rebounding back toward $60. 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: - 4.63
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 2.5 million

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Corning Inc. - GLW - close: 20.38 chg: -0.06 stop: n/a

GLW is stuck in a trading range and at this point we don't know what it's going to take to knock it out of this range. Lack of any real bounce might suggest the prevailing trend, which is down, will reassert itself but bulls are buying the dips. 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.

Picked on July 10 at $ 20.16
Change since picked: + 0.22
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million

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Google Inc. - GOOG - close: 486.34 chg: + 6.49 stop: n/a

GOOG is trying to bounce again. Shares are up two days in a row. More conservative traders might want to consider an early exit since we have less than two weeks before August options expire. 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: -49.26
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 4.5 million

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Internet Holders - HHH - cls: 50.18 change: -0.35 stop: n/a

There is no change from our prior comments on HHH. This play is essentially a "dead man walking" and we're just waiting for August option expiration. 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: - 0.38
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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Lehman Brothers - LEH - close: 20.46 chg: +0.22 stop: n/a

LEH managed to end with another gain on Wednesday but shares have not yet broken the trend of lower highs. We don't have much time left so readers will want to consider an early exit if either option even gets close to our breakeven price. 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: + 3.41
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million

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Legg Mason - LM - close: 42.33 chg: -0.52 stop: n/a

LM did a relatively good job of holding on to its recent gains. Shares only gave up 1.2%. We don't see any changes from our weekend comments. We are not suggesting new strangles at this time. 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: + 2.13
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 3.1 million

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MarketVectors Agribusiness- MOO - close: 52.20 chg: +1.10 stop: n/a

The agribusiness stocks were sold hard this week and the group managed a bounce on Wednesday. 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: - 5.05
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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Netflix - NFLX - close: 30.00 change: +0.11 stop: n/a

NFLX is still moving sideways. We don't see any changes from our weekend comments. More conservative traders may want to exit early or adjust their exit target. 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: + 2.02
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 1.3 million

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PowerShares QQQ - QQQQ - cls: 46.63 chg: +0.70 stop: n/a

Will wonders never cease? After more than a month of being stuck in the $44-46 range the Qs finally broke out today. This is short-term bullish even though the QQQQ has a cloud of moving averages overhead and any of them could act as resistance. 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: + 1.73
Earnings Date 00/00/00
Average Daily Volume = 148 million

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Starbucks - SBUX - close: 14.94 change: +0.42 stop: n/a

Today's 2.9% gain in SBUX actually broke its two-week downturn of lower highs. Unfortunately for shareholders SBUX still has a much larger, long-term trend of lower highs to deal with. 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 $2.10 or more. (FYI: The $14 calls hit $2.10 on the July spike to $16.00.)

Picked on July 15 at $ 13.58
Change since picked: + 1.36
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 million

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UBS Ag - UBS - close: 20.61 change: +0.02 stop: n/a

Traders could have slept through UBS' performance on Wednesday. It was a flat session. We don't see any changes from our previous comments. We have less than two weeks before August options expire. More conservative traders may want to consider an early exit now or adjust their exit target to 75% or 100% of breakeven. 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: + 1.11
Earnings Date 08/12/08 (unconfirmed)
Average Daily Volume: 7.3 million

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Valero Energy - VLO - close: 34.47 chg: +2.33 stop: n/a

VLO displayed some impressive relative strength with a 7% gain on above average volume. Has the stock finally found a bottom? We are not 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: + 0.26
Earnings Date 07/29/08 (confirmed)
Average Daily Volume = 12.7 million

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Washington Mutual - WM - close: 5.30 chg: +0.08 stop: n/a

WM managed a meager bounce from the $5.00 level today. 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 $1.45 or more.

Picked on July 20 at $ 5.92
Change since picked: - 0.62
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 57 million
 

Dropped Calls

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Dropped Puts

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Dropped Strangles

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