Editor's Note:

The stock market recovered from its intraday lows and closed positive. The strength here is pretty incredible. Our bias is bullish but we don't want to launch new bullish positions with the market so overbought. Be patient. The market will see a pull back but it's possible that the S&P 500 hits 1,000 or the NASDAQ will hit 2,000 first before correcting. Nimble traders could try very short-term bearish bets on a reversal as these indices near major milestones.


CALL Play Updates

Fluor Corp. - FLR - close: 54.97 change: +1.57 stop: 47.45

FLR continues to show relative strength and gained 2.9%. The stock is nearing potential resistance at $55.00 and its June high (55.40). We want to buy a dip back in the $50.00-48.00 zone. Officially our entry point will be $50.25. If triggered our first target is $54.80. Our second target is $59.00 but we may not have time. FLR is due to report earnings in less than three weeks. We do not want to hold over the announcement.

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           08/10/09 (unconfirmed)
Average Daily Volume =       2.4 million  
Listed on  July 25, 2009         


Euro Currency ETF - FXE - close: 142.37 chg: +0.22 stop: 139.40

There is no change from my previous comments. The dollar and the euro continue to drift sideways. I wouldn't be surprised to see the FXE dip back toward $141.00 or $140.00. Our first target is $144.50. Our second target is $148.50. The P&F chart is bullish with a $168 target.

Picked on     June 23 at $140.76
Change since picked:      + 1.61
Earnings Date           00/00/00
Average Daily Volume =       461 thousand    
Listed on  June 23, 2009         


Gold Miner ETF - GDX - close: 39.85 change: -0.05 stop: 36.49

Some very minor weakness in the dollar gave gold prices a little boost but the miners didn't participate. I'm expecting a minor pull back in the GDX. Look for support in the $38.00-37.00 zone. More conservative traders may want to adjust theirs higher toward $38.00. I'm not suggesting new bullish positions in the GDX at this time. GDX has already exceeded our first target. Our second target is $42.40.

Picked on     July 13 at $ 36.49 /gap higher entry
                               /originally listed at $35.93
Change since picked:      + 3.36
            gap higher exit   /1st target hit @ 39.95 (+9.4%)
Earnings Date           00/00/00
Average Daily Volume =       6.8 million  
Listed on  July 13, 2009         


IDEXX Labs - IDXX - close: 49.99 change: -0.31 stop: 44.95

IDXX held up pretty well considering its big rally last week. We are waiting for a pull back toward previous resistance and what should be new support.

The plan is to buy calls on a dip at $47.50. If triggered our first target is $52.00. Our second target is $54.90. Our time frame is four to eight weeks.

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           07/24/09 (confirmed)
Average Daily Volume =       383 thousand 
Listed on  July 25, 2009         


Legg Mason - LM - close: 27.71 change: +0.58 stop: 23.75

There is no change from our weekend comments on LM. We're looking to buy a dip near $25.00. The plan is to buy calls on the stock at $25.25 but we can really use the 25.25-24.00 zone as an entry point. If triggered our first target is $29.50. Our second target is $33.40. My time frame is four to eight weeks.

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           07/20/09 (confirmed)
Average Daily Volume =       3.4 million  
Listed on  July 25, 2009         


Polaris - PII - close: 36.67 change: +0.55 stop: 31.45

PII is still drifting higher. We're waiting for a correction. I am suggesting readers wait for a dip in the $33.00-32.00 zone with a tight stop at $31.45. Our first target is $37.25. Our second target is $39.50.

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           07/16/09 (confirmed)
Average Daily Volume =       436 thousand 
Listed on  July 18, 2009         


PUT Play Updates

Compass Minerals Intl. - CMP - cls: 48.84 change: +0.05 stop: 50.05*new*

Tomorrow is our last day. We want to exit at the closing bell to avoid holding over earnings. I am lowering our stop loss to $50.05. CMP has exceeded our first target at $47.50 and I am adjusting our second target to $46.05.

Picked on     July 06 at $ 52.25 *triggered     
Change since picked:      - 3.41
                               /1st target hit @ 47.50 (-9.0%)
Earnings Date           07/28/09 (confirmed)
Average Daily Volume =       792 thousand 
Listed on  June 29, 2009         


Genzyme Corp. - GENZ - close: 53.73 change: +0.95 stop: 54.15

Our bearish bet on GENZ is in trouble. The stock has closed above what should have been resistance in the $53.00-53.50 zone. Shares temporarily pierced the $54.00 level and hit $54.13 intraday. We are now at risk of GENZ gapping open higher, especially now because Amgen (AMGN) reported earnings after the close on Monday and the company beat estimates and guided higher. I am not suggesting new positions at this time.

The plan was to buy 1/2 our position in the $52-53 zone and 1/2 on a breakdown under $50.00. Our first target is $45.50. Our second, multi-week target is $40.50.

1st Entry on  July 23 at $ 52.17 *1/2 of position
2nd Entry on  July xx at $ xx.xx (2nd half @ trigger 49.90)
Change since picked:      + 1.56
Earnings Date           07/22/09 (confirmed)
Average Daily Volume =       2.8 million  
Listed on  July 22, 2009         


LEAP Wireless - LEAP - close: 26.50 change: +0.55 stop: 29.45

The oversold bounce in LEAP is picking up some momentum. Shares tested their 10-dma today. Wait for a failed rally near $28.00 or the $29.00 level before considering new bearish positions. Our first target is $22.65. Our second target is $20.25. The $22.50 level could be strong support so I suggest readers take off most of their position there. FYI: The P&F chart is bearish with a $19.00 target.

Picked on     July 17 at $ 26.80 *triggered    
Change since picked:      - 0.30
Earnings Date           08/06/09 (confirmed)
Average Daily Volume =       2.2 million  
Listed on  July 16, 2009         


Nike - NKE - close: 52.37 change: +0.20 stop: 53.51

I'm expecting the 1,000 level to be new resistance for the S&P 500. That leaves NKE in a race. Will the bounce in NKE break resistance near $53.50 before the S&P 500 at 982 trades near 1,000 and rolls over? At this point I'm not suggesting new put positions in NKE. Wait for a failed rally under $53.50. Our first target is the $46.00-45.00 zone.

Picked on     July 23 at $ 51.14
Change since picked:      + 1.03
Earnings Date           09/23/09 (unconfirmed)
Average Daily Volume =       3.8 million  
Listed on  July 23, 2009         


United Technologies - UTX - close: 52.11 change: -0.12 stop: 55.05

UTX is still under performing. I would wait for a failed rally in the $53-54 zone before launching new positions now. Our first target to take profits is at $50.15.

Picked on     July 22 at $ 53.12
Change since picked:      - 1.01
Earnings Date           07/21/09 (confirmed)
Average Daily Volume =       5.9 million  
Listed on  July 22, 2009         


Strangle & Spread Play 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.)

McDonald's - MCD - close: 55.97 change: -0.11 stop: n/a

MCD is inching closer and closer to a bearish breakdown under its 100-dma and the $56.00 level. Earnings came out last week so we are no longer suggesting new strangle positions.

I suggested the August $60 calls (MCD-HL) and the August $55 puts (MCD-TK). Our estimated cost is $1.25 (0.70 + 0.55). We want to sell if either option hits $2.75 or higher. This may take a few weeks to succeed.

Picked on     July 18 at $ 57.84
Change since picked:      - 1.87
Earnings Date           07/23/09 (unconfirmed)
Average Daily Volume =       7.8 million  
Listed on  July 18, 2009         


CLOSED BULLISH PLAYS

O'Reilly Automotive - ORLY - close: 40.07 change: -1.00 stop: 39.95

Investors decided to sell the auto-parts stores. I couldn't find any specific news to account for the relative weakness but ORLY, AZO, AAP, GPC, and PBY all under performed today. ORLY was definitely a target for profit taking after hitting new all-time highs last week. The stock hit our stop loss at $39.95. Readers may want to reconsider new bullish positions on a dip or bounce near $38.00 or its rising 100-dma.

Chart:

Picked on     July 13 at $ 40.00
Change since picked:      - 0.05 <-- stopped @ 39.95 (- <1%) 
Earnings Date           07/29/09 (confirmed)
Average Daily Volume =       1.9 million  
Listed on  July 13, 2009         


CLOSED BEARISH PLAYS

WestAmerica - WABC - close: 50.77 change: +2.37 stop: 50.05

Banking stocks were some of the best performers today. Shares of WABC managed a 4.8% rally and a bullish breakout past multiple levels of resistance. The stock hit our stop loss at $50.05.

Chart:

Picked on     July 18 at $ 47.61 /gap higher entry
                               /originally listed at $47.07
Change since picked:      + 2.44<-- stopped @ 50.05 (+5.1%)
Earnings Date           07/14/09 (confirmed)
Average Daily Volume =       331 thousand 
Listed on  July 18, 2009