Current Portfolio:


CALL Play Updates

Intrepid Potash, Inc. - IPI - close 22.17 change -0.31 stop 20.90

Target(s): 22.85, 23.20, 23.80
Key Support/Resistance Areas: 23.25, 22.00, 21,00
Time Frame: 1 to 2 weeks

Comments:
7/19: IPI traded to within 6 cents of our entry before bouncing. I anticipate getting filled tomorrow. Futures are down in the aftermarket so readers may want to consider entering at a lower price in the $21.50 to $21.60 area depending on the strength of the weakness tomorrow. Our official entry remains at $21.80 which is -1.5% lower than current prices.

7/17: Ag stocks are gaining momentum and I like IPI on any further weakness. IPI has longer term support/resistance at $22.00 and $21.00. The stock broke below those areas during the weakness in the early July but has since rebounded and broken out of the resistance on strong volume. The stock retreated from its 50-day SMA on Friday on significantly lighter volume. I'm looking for a little more pullback and suggest readers initiate long positions if IPI trades down to $21.80. Our stop will be $20.90 which is below the 20-day SMA and the important $21.00 support level.

Suggested Position: August $22.00 CALL, current ask $1.30, estimated ask at entry $1.15

Entry on July xx
Earnings Date 8/4/10 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on 7/17/10


Merck & Co - MRK - close 35.80 change -0.11 stop 35.38 *NEW*

Target(s): 36.30, 36.55, 36.95, 37.45
Key Support/Resistance Areas: 39.50, 38.75, 38.00, 36.35, 35.80
Current Gain/Loss: -0.9%
Time Frame: 1 to 2 weeks
New Positions: Yes, with the tighter stop

Comments:
7/19: MRK had a relatively quiet day and remains above its 200-day, 50-day, and 20-day SMA's. My comments from below have not changed.

7/17: MRK broke out to new daily highs on Friday not seen since April but the breakout failed and the stock looks vulnerable to the down side. The stock has long term horizontal support between $35.80 and $35.60 and its 20-day, 100-day, and 200-day SMA's (all right at $35.60) are below Friday's closing price. This should provide support for the stock but if this sell-off gains steam I doubt MRK can hang in at these levels. If this support is broken the next stop will most likely be somewhere just below $35.00 which could also set-up an inverse head and shoulders pattern(see ovals on chart). This area is also near an upward trend line and its 50-day SMA. So the question is should we adjust our stop down a bit and sit through a -2% to -3% pullback if the $35.60 support level breaks? Considering the broad market sell off on Friday when even the more defensive sectors like pharmaceuticals were down over -2%, I say no. I am going to keep a tight leash on this trade and raise the stop to $35.38 while also bringing down the targets to see if we can make this a winner. MRK may go test the aforementioned SMA's prior to bouncing and I suggest we sell positions into strength using the above targets. These are good areas to consider tightening stops to see how much we can get out of the position.

7/13: MRK closed above resistance of $36.35 and looks like it is headed towards our targets. If the broader market continues bouncing we should have no issues hitting our target(s) and MRK could also act as a defensive play if there is a pullback.

Current Position: August $36.00 CALLS, entry was at $1.21

Entry on July 12, 2010
Earnings Date 7/30/10 (unconfirmed)
Average Daily Volume: 18 million
Listed on 7/10/10


United States Steel - X - close 41.22 change -0.14 stop 39.75

Target(s): 43.25, 44.60, 46.20
Key Support/Resistance Areas: 48.70, 46.25, 50-day SMA, 43.50, 40.80, $40.00
Current Gain/Loss: -45%
Time Frame: 1 week
New Positions: Yes, with tight stop

Comments:
7/19: X if forming a bear flag on its intraday chart and looks vulnerable here. The aftermarket is looking weak and X may hit our stop tomorrow. Readers may want to consider exiting at the open to preserve capital. The stock is holding an upward trend line and is hovering around its 20-day SMA but the if the market gains momentum to the down side tomorrow I don't anticipate X moving being able swim to upstream.

7/17: Friday was blow to the bullish thesis on X but many things still exist to support it. X has intraday support at $40.80 and longer term support from June at $40.00. It also sits near its 20-day SMA and there are some important retracement levels from the July lows to recent highs in the $40.00 to $41.00 area that may support X on this pullback. I still think X should trade up near its 50-day SMA prior to moving much lower so I am sticking with the set-up on this trade but will be out if our stop is hit. Considering Friday's broad sell off I've adjusted the targets offered a lower first target of $43.25 which is good place to consider tightening stops or taking profits. I chose a further out of the money call than normal with a small delta of .28 to limit risk on this trade. NOTE: I view this an aggressive and potentially quick trade. Please use proper position size to manage risk.

Current Position: August $46.00 CALLS, entry was at $1.38

Entry on July 15, 2010
Earnings Date 7/27/10 (unconfirmed)
Average Daily Volume: 13.5 million
Listed on July 14, 2010


PUT Play Updates

Deere & Co. - DE - close 59.73 change -1.35 stop NONE *NEW*

Target(s): 59.10, 58.20, 57.05, 56.30, 55.40
Key Support/Resistance Areas: 59.00, 58.00, 56.85, 56.15, 55.00, 54.15
Current Gain/Loss: -68%
Time Frame: 1 to 2 weeks
New Positions: Yes, with a tight stop

Comments:
7/19: DE gapped higher and then gave it up early, but rebounded into the close. I'm expecting a weak market tomorrow and suggest readers begin to tighten stops and exit positions as our targets approach. My comments from below have not changed.

7/17: DE gave some back on Friday and I expect the selling to continue, at least in the short term. Since May DE has made 4 round trips between $60 and $55. Obviously I never thought that the stock would do it again when the trade was released so now we are left to manage the exit at the best possible price. My plan going forward is to trail DE's decline with stops to see how much we can get out of the trade. The problem right now is that I do not see a proper level to place a new stop just yet. So for now I am keeping the trade open without one. Once a better reference point is established I will place a new stop. I've adjusted the targets above which are just above the updated key support/resistance areas. DE may find some support near these areas on the way down so I suggest readers use these levels as a guide to exit positions. $58.20 is just above the stock's 20-day and 50-day SMA's and is an area of high interest. The overall strength or weakness in the broader market should determine how far we can take this.

Current Position: August $55.00 PUTS, entry was at $3.00

Entry on July 6, 2010
Earnings 8/18/2010 (unconfirmed)
Average Daily Volume: 5.4 million
Listed on July 3, 2010


Lululemon Athletica Inc. - LULU - close 37.89 change -0.11 stop 40.42

Target(s): 38.00 (hit), 37.35, 35.80, 34.55
Key Support/Resistance Areas: 42.25, 39.75, 37.00, 35.16, 32.75
Current Gain/Loss: -7.6%
Time Frame: 1 week
New Positions: Yes

Comments:
7/19: LULU came within 8 cents of our 2nd target where it found support and reversed higher. As such I'm going to raise the target 10 cents to $37.35. We currently have +3.2% gains and the new target should produce a winning trade. LULU is getting close to touching its a upward trend line from last July and the next target is a good place to tighten stops to see if we can get more out of the trade. If LULU breaks this trend line the stock could pick-up steam to the downside towards the 200-day SMA.

7/17: My comments from 7/15 haven't materially changed so I am adding to them in the 7/17 post. LULU is being contained by its 20-day and 50-day SMA's and the backside of its broken upward trend line that began in February. I expect this resistance to hold and LULU to turn lower. Friday's -4% decline took away 6 prior days gains. Our target of $38.00 was hit on Friday but I am looking for more downside. $37.25 is now the immediate target below but if LULU breaks its upward trend line that began last July this could gain steam to the downside towards the 200-day SMA. I've tightened the stop to $40.42.

Current Position: August $35.00 PUTS, entry was at $1.30

Entry on July 12, 2010
Earnings 8/19/2010 (unconfirmed)
Average Daily Volume: 700,000
Listed on July 1, 2010


PowerShares QQQQ Trust - QQQQ - close 44.72 change +0.38 stop 46.10

Target(s): 44.40 (hit), 43.75, 43.25, 42.55
Key Support/Resistance Areas: 46.77, 45.25, 44.46, 43.50, 42.50, 41.00
Current gain/loss: -15.00%
Time Frame: 1 weeks
New Positions: Yes

Comments:
7/19: The NASDAQ 100 futures are down over -1% compared to the 4:00 PM close after IBM and Texas Instruments earnings. This should put pressure on QQQQ and get the ETF moving towards our more aggressive targets. As these targets approach I suggest readers tighten stops to see how much more we can get out of the position.

7/17: QQQQ hit our target of $44.40 and we are now approaching breakeven on the trade. I've moved the stop down to $46.10 which just above last week's highs. I'm comfortable giving this some room to work and suggest we ride it as far down as we can. Friday didn't really give us a good reference point to place a tighter stop but there is an intraday congestion area between $45.00 and $45.40 so a tighter stop could be placed above there. QQQQ may bounce and retrace some of Friday's losses but I expect the selling to resume. I've adjusted the targets above and suggest readers tighten stops as they are hit to protect against a reversal. $43.25 is a high area of interest to tighten stops or take profits. This level should give us a nice +30% gain.

Current Position: August $45.00 PUTS, entry was at $1.85

Annotated Chart:
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Entry on July 8, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 100 million
Listed on July 7, 2010


Starbucks Corp. - SBUX - close 25.49 change +0.14 stop 26.05 *NEW*

Target(s): 25.30 (hit), 25.00, 24.85, 24.40
Key Support/Resistance Areas: 26.50, 26.00, 25.25, 24.80, 24.00, 23.60, 22.50
Current Gain/Loss: -37.1%
Time Frame: 1 to 2 days
New Positions: No

Comments:
7/19: SBUX reports earnings after the bell on Wednesday and I suggest readers exit positions prior to the close on Wednesday. Today the stock was down about -1% in early trading and I'm looking for more weakness tomorrow. We have 3 near term targets listed above which are good areas to consider exiting positions tightening stops to ride this down as far as we can prior to earnings. For options traders, I strongly encourage you to exit prior to earnings as the volatility could get sucked out of the premium.

7/17: On Friday morning SBUX closed its gap lower on 6/29 (referred to in the update below) and then took a nose dive and closed its gap higher from 7/13. All of the stock's weekly gains were essentially erased with Friday's -3% loss. Similar to the Q's above SBUX didn't give us a good reference point on Friday to place tighter stop so I have moved the stop down to the top of last week's congestion area at $26.05. This should be enough room to see how far we can ride SBUX back down so we can turn this trade into a winner. The targets can be used as a guide to for potential bounce points on the way down.

Current Position: August $25.00 PUTS, entry was at $1.40

Entry on July 8, 2010
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on July 3, 2010


Wynn Resorts - WYNN - close 80.01 change +0.44 stop 85.50

Target(s): 77.75, 75.50, 72.25
Key Support/Resistance Areas: 85.00, 84.00, 76.50, 72.00
Current Gain/Loss: -11%
Time Frame: 1 week
New Positions: Yes

Comments:
7/17: WYNN broke down early and hit our trigger of $79.10 to enter short positions. The stock then recovered the remainder of the day and closed marginally higher. WYNN broke through an intraday down trend line and then rallied back up to test it from underneath which I am expecting to be a kiss goodbye. It is also below its 20-day and 50-day SMA's which should provide further resistance. However, I expect this to be a quick trade and suggest readers be quick to tighten stops or simply take profits if WYNN proceeds lower from here. Considering today's reversal I have listed a target just above today's low as the immediate near term target. I've also adjusted the more aggressive targets to give us the best chance at hitting them and taking profits.

7/15: I'm looking for WYNN to break down from here and touch its longer term upward trend line that began in November. This is at about $74.50 which is our first target. If the broader market is weak I see no reason why WYNN won't trade down to its 200-day SMA which it hasn't done since last July. The stock also broke below its 20-day and 50-day SMA's on Friday. I suggest readers initiate short positions if WYNN trades to $80.80 or $79.10 which is below Friday's low, whichever occurs first. NOTE: I view this trade as being aggressive and potentially quick.

Current Position: August $75.00 PUTS, entry was at $3.50

Entry on July 19, 2010
Earnings 7/29/10 (unconfirmed)
Average Daily Volume: 2.92 million
Listed on July 17, 2010

Ingersoll-Rand - IR - close 34.98 change +0.61 stop 35.75 *NEW*

Target(s): 34.20, 33.70, 33.25, 32.55
Key Support/Resistance Areas: 37.00, 36.50, 35.60, 34.20, 33.11, 31.50, 30.12
Final Gain/Loss: -15.55%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
7/17: After early strength IR traded down to our target at $34.20. The stock was showing overall relative strength compared to broader market and was at a key support area which was the reason we closed the trade for -15% loss. IR made a double bottom with Wednesday's low at $34.15 and took off. There should be weakness tomorrow so if readers still have positions I suggest protecting capital and trailing stops down to get as much out the stock's decline as possible. IR needs to break below $34.15 to get any more downside.

7/17: IR held up better than I thought it would on Friday's sell off but still closed down -1.60%. The stock almost hit our first target again. This is obviously a key support level so if breaks through we will have a chance to take profits. The stock remains in a bear flag on the daily chart and appears to be consolidating before breaking lower. I've adjusted the targets above and suggest readers use these as a guide to tighten stops and exit positions if the stock heads lower from here. I've also tightened the stop to $35.75 which above the 200-day SMA.

7/15: IR was under pressure early and came within 1 penny of our first target before reversing. As a result, this target has been adjusted up 5 cents. IR is forming a bear flag on its daily chart and any broader market weakness should send this stock lower, and fast. My comments from below remain the same.

Closed Position: August $35.00 PUTS at $1.90, entry was at $2.25

Annotated Chart:
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Entry on July 8, 2010
Earnings 7/19/2010 (unconfirmed)
Average Daily Volume: 5.4 million
Listed on July 7, 2010