Current Portfolio:


CALL Play Updates

Human Genome Sciences - HGSI - close 25.16 change -0.11 stop 23.95

Target(s): 25.95, 26.50, 27.00, 27.55
Key Support/Resistance Areas: 28.00, 27.10, 26.60, 24.70, 24.25
Current Gain/Loss: -15%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
7/29: HGSI pulled a repeat from yesterday's price action. My comments remain the same except that readers may want to consider adding a $25.95 target to protect capital. This is near today's highs just below Monday's intraday support and HGSI found strong resistance here. It is certainly a good level to consider tightening stops. For now the bullish thesis remains in tact per my comments below but the stock needs to bounce from here.

7/28: HGSI pulled back to its upward trend line and 50-day SMA as mentioned in last night's updates. The stock remains in its upward channel and above its 50-day and 20-day SMA's. I am looking for HGSI to bounce from here and believe this is a good entry point with a tight stop.

7/27: HGSI traded to our $25.50 trigger to enter long positions and then bounced into the close. HGSI has solid support down to $24.70 which is near the 50-day SMA and recent upward trend line. We may have to exhibit a little patience to allow HGSI to gather its footing but I expect the stock to maintain its upward trend line. I made some minor adjustments to the above targets.

Current Position: September $26.00 CALL, entry was at $1.82

Entry on July 27, 2010
Earnings Date 10/25/10 (unconfirmed)
Average Daily Volume: 4.2 million
Listed on 7/24/10


ProShares UltraShort 20 YR Treasury - TBT - close 36.95 change -0.02 stop 34.25

Target(s): 37.50 (hit), 38.00, 39.25, 40.50, 41.95
Key Support/Resistance Areas: 42.00, 41,00, 39.70, 38.25, 37.55, 34.65
Current Gain/Loss: +9%
Time Frame: Several Weeks
New Positions: Yes

Comments:
7/29: TBT shot right up to its 50-day SMA this morning and then backed off closing nearly unchanged. The $37.50 to $38.00 area is acting as resistance as I have suspected. I remain bullish on TBT and suggest patience as it works its way through these levels. We've also been suggesting taking some profits off the table to book gains and protect capital and today provided another chance. For options traders, call positions could have sold for about $1.75 on the surge higher today which would have represented about +40% gains. Strength in equities will bode well for TBT so if you believe a big sell-off is pending I I suggest protecting profits in this position. $37.50 is still a valid target and I recommend protecting profits if TBT trades up there again. If TBT keeps knocking on the door at this resistance level it should eventually open but there is nothing wrong with booking a gain in these market conditions.

7/28: TBT found resistance right at $37.50 as mentioned in last night's updates and this proved to be a good spot to take a portion of your profits off the table. TBT has intraday support at current levels and all the way down to its 20-day SMA which also corresponds to the backside of the broken downtrend line $36.25. The ETF could pullback down to this area and still be considered bullish. I'm comfortable giving this some room to work and am looking for a better reference point to tighten the stop.

7/27: TBT broke above its most recent downtrend line and closed +1.92% higher on the day. The next level of resistance is $37.50 to $38.00 which is just below its 50-day SMA. TBT will most likely find resistance in this area. Our first target is $37.50 which is not a bad place to consider taking profits or tightening stops. For options traders our current gain is +30.9% and at $37.50 it should be about +42%. Ultimately I expect TBT to trade up to the $39.00 to $41.00 level which is near our more aggressive targets. However, it will not do this in a straight line. So taking some profits off of the table or tightening stops is a good strategy. I plan to officially tighten the stop when there is a better reference point but be aware that there should be a pullback in the $37.50 to $38.00 level.

Current Position: September $37.00 CALL, entry was at $1.23

Entry on July 26, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 3.8 million
Listed on July 24, 2010


ProShares Ultra Basic Materials - UYM - close 30.23 change +0.10 stop 27.20

Target(s): 30.35, 31.20
Key Support/Resistance Areas: 31.30, 30.50, 29.00, 28.00, 27.25
Time Frame: 1 week

Comments:
7/29: UYM is not letting us in. The ETF hit a low of $29.50 today and bounced hard. This could also be considered as an entry which may set-up a double bottom pattern on another pullback. I'll reevaluate the play this weekend and come up with a game plan. My comments from below have not changed.

7/28: Our trigger to enter long positions at $29.10 is getting close. $29.00 is a key support/resistance area dating back to the fall of 2009 which is why I am sticking with the $29.10 entry price. However, I will also add that the 38.2% retracement from the 7/20 lows to the 7/27 highs is $29.28, the 50% retracement is $28.54, and the 61.8% retracement is $27.78. And the 50-day SMA is near $28.00. All of these areas can be considered as good long entry points but it is a decision that needs to be made as market conditions develop. Conservative traders may want to consider lowering their entry to the $28.55 area but I'm just not certain UYM will make it down there. The broader market strength or weakness will determine how far UYM pulls back.

Suggested Position: September $30.00 CALL, current ask $2.95, estimated ask at entry $2.15 (I suggest entering this position with a limit order between the bid/ask spread. Try to enter at no more than 5 to 10 cents above the middle of the bid/ask spread)

Entry on July xx
Earnings Date N/A (unconfirmed)
Average Daily Volume: 1.9 million
Listed on 7/22/10


CLOSED BEARISH PLAYS

Semiconductor HOLDRS Trust - SMH - close 27.64 change -0.44 stop 29.66

Target(s): 27.55 (hit), 27.15
Key Support/Resistance Areas: 29.00, 28.20, 27.40, 27.00
Final Gain/Loss: +42.0%
Time Frame: 1 week
New Positions: Closed

Comments:
7/29: Per last night's updates we protected profits at $29.55 and are out of SMH for a much needed +42% gain. I suspected this may happen fast and taking profits was the smart thing to do in this fast moving market. I chose $27.55 as the target because it is just above the 20-day and 50-day SMA's. This has proven to be support for the semi's so far. We still may get more pullback but I wouldn't expect much more than a trip to the 200-day SMA unless things get real ugly in the broader market.

7/28: Short positions were initiated in SMH this morning and the ETF proceeded to break down and out of the ascending wedge and dark cloud cover mentioned in yesterday's play release. SMH has intraday support at current levels but if it breaks we should hit our first target of $27.55 (raised 5 cents) relatively quick. This is near the 20-day SMA and a good place to tighten stops to protect profits. SMH will probably bounce there and it may happen fast so please protect profits.

7/27: I'm sticking with ETF's for now to filter out some of the earnings noise. SMH finds itself at the top of a trading range between $26.00 and $29.00 for the past three months. Today's candle on the ETF is a dark cloud cover pattern which is considered a reversal signal. The candle opened above yesterday's high and then pierced half of the prior day's candle. This is considered an exhaustion gap and I believe SMH, along with the broader market, will retrace some of the recent gains. SMH has also formed a bearish wedge over the past couple of weeks and it should break to the downside for a price correction, especially considering the overbought conditions. We'll place an initial stop at $29.66 to give this some room and will adjust it once we are in the position.

Closed Position: September $28.00 PUTS at $1.52, entry was at $1.07

Annotated chart:

Entry on July 28, 2010
Earnings: N/A (unconfirmed)
Average Daily Volume: 15 million
Listed on July 27, 2010


SPDR S&P 500 ETF - SPY - close 110.29 change -0.54 stop 113.55

Target(s): 110.30 (hit), 109.55 (hit), 108.60, 107.75
Key Support/Resistance Areas: 113.20, 111.65, 110.00, 109.50, 108.55
Final Gain/Loss: +45.5%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
7/29: SPY made it down to our $109.55 target twice today and then bounced hard. In last night's updates I mentioned this may happen fast and to be ready to take profits if we get there. The model portfolio is flat the position for another much needed +45.5% gain. For readers who may still have positions there is intraday resistance at current levels. Please protect the profits that are left. Two tighter stops I would consider are 1,111.90 and 1,112.40 but these will seriously eat away at current gains.

7/28: SPY drifted lower the entire day and came within 16 cents of hitting our $110.30 target. I believe SPY is destined to touch its upward trend line from the 7/1 lows which is near our 2nd target of $109.50, however, protecting profits against a reversal is highly suggested. A trip down to this area could happen fast so I suggest placing an order and be ready to take profits if we get there. SPY may also bounce in the $110 area which is the mid-July highs and just below our first target. I'm not quite ready to tighten the stop yet.

7/27: The gap higher in the S&P 500 today allowed us to enter short positions in SPY at a better price. SPY drifted lower most of the day and I am expecting more downside, at least in the near term. I am going to offer a higher first target at $110.30 which is just above the mid-July highs. SPY will probably bounce at this level and it is a good place to protect against reversal. A tighter stop could be placed at $112.55 which is just above today's highs.

Closed Position: Long September $110.00 PUTS at $4.22, entry was at $2.90

Annotated chart:

Entry on July 27, 2010
Earnings: N/A (unconfirmed)
Average Daily Volume: 236 million
Listed on July 26, 2010