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Call Updates

Adobe Systems - ADBE - close: 45.89 chg: +0.74 stop: 41.50

ADBE continues to show relative strength. The stock rallied to the $46 level and spent most of the day trying to breakout past it. We remain bullish but we're not suggesting new positions at this time. Our target is the $47.50-50.00 zone. The Point & Figure chart is positive with a $71 target.

Picked on August 05 at $ 43.34
Change since picked: + 2.55
Earnings Date 09/16/08 (unconfirmed)
Average Daily Volume = 6.5 million

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Intl. Bus. Mach. - IBM - cls: 126.60 chg: -2.21 stop: 127.45

IBM was a laggard in the major indices today. The stock turned lower and dipped toward $125 and its 50-dma before bouncing back late this afternoon. The move casts a bearish shadow over most of IBM's short-term technical indicators. More aggressive traders may want to consider buying a bounce from here with a tight stop or a stop under $125. We are sticking to our plan and waiting for a new relative high. The recent high was $130.93. We are suggesting a trigger to buy calls at $131.05. If triggered our target is the $137.50-140.00 zone.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 8.2 million

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Illumina - ILMN - cls: 88.84 chg: -0.52 stop: 86.45

ILMN failed to make any progress today. The stock bounced around the $88-90 zone. We are suggesting readers buy calls at $91.55, which is above the 10-dma and above Thursday's intraday high. If triggered we have two targets. Our first target is $95.25. Our second target is $99.50. FYI: ILMN has a 2-for-1 stock split scheduled for September 23rd. Traders might also want to note that ILMN's short interest is about 19% of the 50 million-share float. That's high enough to spark some short squeezes.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/27/08 (unconfirmed)
Average Daily Volume = 1.2 million

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Research In Motion - RIMM - cls: 131.42 chg: -2.33 stop: 122.50

RIMM received some positive analyst comments today but it wasn't enough to lift the stock following last week's impressive gains. The trend is still up but we are not suggesting new positions at this time. If you are looking for an entry point wait for a potential dip back to the 50-dma and 100-dma near $125. RIMM has already exceeded our early target at $129. Our secondary target is $137.00.

Picked on July 31 at $120.50 /1st target exceeded
Change since picked: +10.93
Earnings Date 09/25/08 (unconfirmed)
Average Daily Volume = 18.6 million

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CBOE Volatility Index - VIX - close: 20.12 chg: -0.54 stop: n/a

The VIX is flirting with a breakdown under the 20.00 level. If the major market averages can build on last week's gains then the VIX will probably sink toward the 18.00-17.50 region. We do not see any changes from our weekend comments. At this point I would look for two things. Wait to buy calls on the VIX until we see the S&P 500 back under the 1260 level. Or wait for a very clear, can't be denied, sort of failed rally/bearish reversal pattern in the major indices. We had suggested the October calls. Our exit target is 29.75 on the VIX.

Picked on August 03 at $ 22.57
Change since picked: - 2.45
Earnings Date 00/00/00
Average Daily Volume = x million
 

Put Updates

Bank of Amer. - BAC - cls: 33.38 change: +1.13 stop: 34.15

Shares of BAC were acting pretty bullish today with a 3.5% gain and a rally back toward resistance near $34.00. The long-term trend is still down but the short-term trend is developing a bullish pattern of higher lows. We would wait for a new move under $32.00 before initiating new bearish positions. We have two targets. Our first target is $28.00. Our second target is $25.50.

Picked on August 07 at $ 31.52
Change since picked: + 1.86
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 90.4 million

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Focus Media - FMCN - cls: 23.46 chg: -1.54 stop: 28.75

FMC continued to sink into Monday's session and closed near its lows for the day with a 6% loss. More conservative traders will want to consider tightening their stop losses. We should expect to see some support around $22.65-22.50 but our target is the $20.50-20.00 zone. This is going to be a short-term play. We do not want to hold over the August 17th earnings report. We'll plan to exit by Friday, August 15th at the closing bell if FMCN hasn't hit our target yet.

Picked on August 10 at $ 25.00
Change since picked: - 1.54
Earnings Date 08/17/08 (confirmed)
Average Daily Volume = 3.9 million

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Freddie Mac - FRE - close: 5.60 change: -0.30 stop: n/a

Shares of FRE and FNM sharply under performed the financial sector. The BKX and BIX banking indices were up 3.1% and 2.9% respectively. FNM lost about 7% and FRE gave up another 5%. We don't see any changes from our weekend comments. We are not suggesting new put positions at this time but if you think FRE is going to fall toward $2.50 or lower then you may want to consider a speculative position. We still consider this a very high-risk play. The stock has been extremely volatile and we're not using a stop loss. More conservative traders may want to take some money off the table now. 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.

Picked on July 20 at $ 9.18
Change since picked: - 3.58
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: 173.56 chg: +4.01 stop: n/a

AAPL continued to rally thanks to headlines regarding the company's online App store. AAPL launched its App store with its launch of the new 3G iPhone. This online store is where consumers can download free and buy premium applications for their iPhone. Steve Jobs said that in the first thirty days the App store has seen consumers download 60 million applications. Consumers are buying 1 million apps a day. Jobs thinks this App store should produce about $365 million in revenue for the company the first year and eventually become a $1 billion market place. Currently AAPL takes a 30% cut of applications sold on their App store.

We are down to our last four days before August options expire. Due to our dwindling time frame we are adjusting our exit target to $4.50-5.00 in an attempt to recoup some of our capital. 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.

Picked on July 20 at $165.15
Change since picked: + 8.41
Earnings Date 07/21/08 (confirmed)
Average Daily Volume = 31.7 million

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Popular Inc. - BPOP - close: 8.05 change: +0.57 stop: n/a

BPOP continues to out shine the rest of the financial sector. The stock rallied another 7% and broke through technical resistance at its 50-dma today. If you are a conservative trader you are going to want to consider an early exit now. The August $7.50 call is trading in the $0.60-0.70 zone, which would recoup our initial cost. We only have four days left and any downturn will crush those calls to nothing in an instant. On the other hand if BPOP can continue to rally the calls will jump significantly as they grow deeper in the money. Currently we are suggesting an exit in the $0.95-1.00 range. 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.

Picked on July 16 at $ 5.82
Change since picked: + 2.23
Earnings Date 07/18/08 (confirmed)
Average Daily Volume = 3.4 million

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DIAMONDS - DIA - close: 117.80 chg: +0.85 stop: n/a

The Dow Jones Industrial Average managed to recover from its afternoon slump and post a decent gain. The DIA closed up 0.7% out doing the index it is supposed to mimic. The August $115 calls are currently trading in the $3.00-3.20 range. More conservative traders may want to exit early right now to recoup a significant chunk of our initial cost. If the DIA turns lower then the calls' value will vanish. If the DIA keeps climbing then this play could actually turn profitable. That decision is up to you. We have lowered our exit target to $4.00-4.35 in an attempt to recoup our capital. 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.

Picked on July 07 at $112.21
Change since picked: + 5.59
Earnings Date 00/00/00
Average Daily Volume = 15.5 million

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FosterWheeler - FWLT - close: 49.88 chg: -2.08 stop: n/a

FWLT continues to plunge as crude oil slips lower. The stock lost another 4% today and actually closed under the $50.00 mark, which is bearish. We're making a correction to our weekend comments and adjusting our exit price to $2.60 (breakeven). More aggressive traders may want to aim for more but we only have four days left before August options expire. 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. FYI: More conservative traders might want to consider an early exit now. The August $50 puts are trading around $1.60. If the stock bounces from here the puts will go to zero pretty fast.

Picked on July 15 at $ 61.24
Change since picked: -11.36
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 2.5 million

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Corning Inc. - GLW - close: 21.58 chg: +0.90 stop: n/a

GLW exploded higher today with a breakout from its trading range and a 4.3% gain. We did not see any specific news to account for the rally. We're happy to finally see some movement after weeks of going no where. The options are still out of the money so they're not moving very fast. We don't see any changes from our weekend comments. Our new target to exit is $0.40 in an attempt to recoup some capital. 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.

Picked on July 10 at $ 20.16
Change since picked: + 1.42
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million

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Google Inc. - GOOG - close: 500.84 chg: +05.83 stop: n/a

GOOG eventually climbed to almost $509 before setting at the $500 level. This would technically be a bullish breakout over round-number resistance but it's not very convincing. We don't see any changes from our weekend comments. We are lowering our exit target to $10 in an attempt to recoup some of our capital. 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.

Picked on July 16 at $535.60
Change since picked: -34.76
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 4.5 million

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Internet Holders - HHH - cls: 53.36 change: +2.08 stop: n/a

A massive move in Amazon.com (AMZN) lifted the HHH to a 4% gain. The Internet HOLDRs broke through technical resistance at the 50-dma. We don't see any changes from our weekend comments. 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. Note: We have adjusted our exit target to $0.75-0.80.

Picked on July 03 at $ 50.50
Change since picked: + 2.86
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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Lehman Brothers - LEH - close: 18.44 chg: -0.18 stop: n/a

LEH did not make any progress. Shares bounced around the $18-20 zone. We don't see any changes from our weekend comments. We have six weeks left before September options expire and need to see LEH significantly above $24.00 or under $10.00. 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: + 1.49
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million

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Legg Mason - LM - close: 44.78 chg: +2.49 stop: n/a

LM soared on Monday with a 5.8% gain and a breakout over its 50-dma. The August $45 calls hit $1.60 intraday. We don't see any changes from our weekend comments. We only have four trading days left for August options so we adjusted our exit price to $2.00 in an attempt to recoup some capital. 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.

Picked on July 23 at $ 40.20
Change since picked: + 4.58
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 3.1 million

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MarketVectors Agribusiness- MOO - close: 49.15 chg: -2.12 stop: n/a

Agribusiness stocks continued to sink and the MOO broke down under the $50.00 level. The August $50 puts hit $1.55 intraday and are currently trading around $1.25. More conservative traders may want to consider an early exit now to recoup part of their initial investment. The risk here is a bounce back above $50, which would kill the call option values. On the other side of the coin if MOO keeps falling then this play could turn profitable. We recently adjusted our exit target to $2.00. 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.

Picked on July 03 at $ 57.25
Change since picked: - 8.10
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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Netflix - NFLX - close: 32.20 change: +1.15 stop: n/a

The short covering in NFLX continues and the stock added more than 3% to breakout over its 100-dma. The August $32.50 calls are currently trading around $0.60 and more conservative traders may want to exit now to recoup part of their initial investment. If NFLX reversed these calls could fall to zero quickly. On the other hand of NFLX keeps climbing these calls could rise just as fast. Over the weekend we adjusted our exit target to $1.00. 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.

Picked on July 23 at $ 27.98
Change since picked: + 4.22
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 1.3 million

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PowerShares QQQ - QQQQ - cls: 47.75 chg: +0.43 stop: n/a

The Qs rallied again and broke through their 200-dma. This lifted the August $47 calls to $1.00. More conservative traders may want to exit now to minimize their losses. If the NDX reverses these call values will decrease sharply. We recently adjusted our exit price to $1.50-1.80. We are not suggesting new strangles. The options we suggested were the August $47 calls (QQQ-HU) and the August $43 puts (QQQ-TQ). Our estimated cost is $1.80.

Picked on July 07 at $ 44.90
Change since picked: + 2.85
Earnings Date 00/00/00
Average Daily Volume = 148 million

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UBS Ag - UBS - close: 21.69 change: +0.54 stop: n/a

Financial stocks bounced again on Monday and UBS added more than 2%. Today's gain put the stock above technical resistance at its 50-dma. We don't see any changes from our weekend comments. We don't have much time left. August options expire in four days. We're adjusting our exit targets in an attempt to recoup our cost.

UBS Strangle #1) This uses the August $22.50 calls (UBS-HX) and $17.50 puts (UBS-TW). Our estimated cost was $1.90. Our new exit target is $0.95.

UBS Strangle #2) This uses the August $25.00 calls (UBS-HE) and $15.00 puts (UBS-TC). Our estimated cost was $0.90. Our new exit target is $0.40.

Picked on July 13 at $19.49
Change since picked: + 2.20
Earnings Date 08/12/08 (unconfirmed)
Average Daily Volume: 7.3 million

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Valero Energy - VLO - close: 34.86 chg: +0.14 stop: n/a

There is no change from our weekend comments on VLO. We have adjusted our suggested exit price to $0.80. 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.

Picked on July 27 at $ 31.88
Change since picked: + 2.98
Earnings Date 07/29/08 (confirmed)
Average Daily Volume = 12.7 million

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Washington Mutual - WM - close: 4.74 chg: +0.16 stop: n/a

The bounce in WM out paced the rebound in financials but the trend continues to look lower. August options expire soon so we've adjusted our suggested exit price to $0.40 in an attempt to recoup some capital. 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.

Picked on July 20 at $ 5.92
Change since picked: - 1.18
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 57 million
 

Dropped Calls

None
 

Dropped Puts

Legg Mason - LM - close: 44.78 chng: +2.49 stop: 43.51

Friday's bullish reversal in LM continued into Monday with a 5.8% gain and a breakout over the simple 50-dma. Shares hit our stop loss at $43.51 closing the play. Last Thursday's breakdown from the wedge pattern now looks like a bear trap.

Picked on August 07 at $ 39.25 /stopped out 43.51
Change since picked: + 5.53
Earnings Date 10/23/08 (unconfirmed)
Average Daily Volume = 3.7 million
 

Dropped Strangles

iShares Brazil - EWZ - cls: 72.05 chg: -2.56 stop: n/a

Brazilian markets continue to fall and the EWZ lost more than 3% today hitting a new four-month low. The August $75 put spiked to $3.80 intraday. Over the weekend we had adjusted our exit price to the $3.50-4.00 range in an attempt to recoup our investment so the play is now closed. More aggressive traders might make a profit if the EWZ continues to fall but we only have four days left before August options expire. 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 was $3.95.

Picked on July 03 at $ 83.06 /exit 72.05
Change since picked: -11.01
Earnings Date 00/00/00
Average Daily Volume = 13.6 million

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Starbucks - SBUX - close: 16.30 change: +1.18 stop: n/a

Target exceeded. Shares of SBUX boiled higher and added almost 8% by the day's end. This lifted the August $14 calls to an intraday high of $2.30. We had recently lowered our exit target from $2.10 to $1.90. The play is closed. 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.

Picked on July 15 at $ 13.58
Change since picked: + 2.72
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 million
 

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