Current Portfolio:


CALL Play Updates

Human Genome Sciences - HGSI - close 26.35 change -0.26 stop 24.65

Target(s): 27.20, 28.20, 29.20
Key Support/Resistance Areas: 29.80, 28.24, 27.80, 26.80, 25.00
Current Gain/Loss: -5%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/14: We are long HGSI calls at 90 cents. The stock traded within yesterday's range so there not much to report. HGSI remains in its upward channel and above its 20 and 50-day SMA's. I'm looking for HGSI to bounce back up towards its 200-day SMA. My comments from below remain the same.

8/12: We're back for another long play in HGSI which produced a winner for us a few weeks ago. The biotech sector has been a relative strong performer recently as it has maintained its upward trend line from the 7/1 lows while the broader market has not. I like HGSI and I suggest we initiate long positions now. The stock is trading in an upward channel and bounced nicely today at the bottom of the channel. HGSI is above its 20-day and 50-day SMA's and looks poised to make another higher high. I'm looking to make $1.50 to $3.00 on this trade. We'll use a stop at $24.65 which is below the 50-day SMA.

Current Position: Long September $28.00 CALL, entry was at $0.90

Annotated Chart:

Entry on August 13, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 2.9 million
Listed on August 12, 2010


SPDR Gold Trust - GLD - close 118.74 change -0.03 stop 112.50

Target(s): 121.60, 123.00, 125.00
Key Support/Resistance Areas: 123.00, 119.10, 116.50, 113.50
Current Gain/Loss: +3.3%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/14: GLD is consolidating in a tight range above its 50-day SMA. We need a break above $119.15 which should spark more buying. If readers are not in positions a break above this level could be used as a more conservative approach. There is a swing high of $119.54 from December that may also act as resistance but I think the aforementioned level is more important. I also like GLD on any weakness.

8/12: GLD gained +1.43% today. Unfortunately for us, the gains came overnight so we did not get filled at a better price. Nonetheless, gold is gaining momentum and if it trades above $119.15, which is near the July highs, GLD should be on the fast path to retest its YTD highs and possibly print new highs. We may see a pullback to close the gap higher today, and if it does it will present another opportunity to get in if readers aren't already in.

8/11: I'm not necessarily a longer term bull on gold, but if the Fed is going to monetize our country's debt gold is going to catch a bid, and I believe now is a perfect time to get in via GLD. Considering the events of the past few days gold and gold miners should catch a bid here and act as a defensive play. From a technical perspective GLD bounced perfectly off of its upward trend line from its lows on 8/17 to 2/5 to 7/28. And I think GLD will print new all time highs within the next several of weeks. I suggest readers enter long positions now. I've provided three realistic targets that will produce good winning trades if reached. Our stop is below the 200-day SMA at 112.50.

Current Position: Long September $120.00 CALL, entry was at $1.80

Annotated Chart:

Entry on August 12, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 12.4 million
Listed on August 10, 2010


Volatility Index - VIX - close: 26.24 change: +0.51 stop: 19.60

Target(s): 25.95 (hit), 27.20, 28.00, 31.50, 35.00
Key Support/Resistance Areas: 20.00, 22.00, 24.00, 26.00, 28.00
Current Gain/Loss: +25.4%
Time Frame: 1 week
New Positions: Yes, on weakness

Comments:
8/14: VIX closed near its highs of the day and we currently have a +25% gain in this position. Exiting this trade could become somewhat tricky depending on what happens next week. I suspect we may get a bounce in the broader market next week so we may need to exhibit some patience with this trade. However, if we head lower first I believe the chances of a hard reversal becomes higher. So if that happens I suggest tightening stops as the VIX heads higher and as our targets approach. $27.20 and $28.00 are likely exit points on a quick down move prior to a bounce.

8/12: The VIX came within 9 cents of hitting our second target so I am going to lower the target to $27.20. If we get further weakness in the S&P 500 prior to a bounce the VIX may spike up to our targets and then retreat like it did today. Therefore, taking profits or tightening stops if that happens is the smart play. If the market finds its legs and bounces from here we will need to exhibit some patience with the trade.

8/11: I spoke too soon thinking we caught a break yesterday when the VIX traded to within 1 penny of our trigger before backing off. It turns out it was a bad break as the SPX gapped lower today and hence the VIX gapped higher. So we would have gotten a better a fill yesterday had we been triggered. Nonetheless, it appears the market has spoken and this trade has some potential. We are long September 30 calls at $2.95. The VIX is now almost at its 50-day SMA and actually hit our first target this afternoon. Considering the massive sell-off today this trade is shaping up to be quicker than I thought.

NOTE: September VIX options expire on Wednesday, Sept. 15th, not Friday

Current Position: Long VIX September $30 CALL, entry was at $2.95

Annotated Chart:

Entry on August 11, 2010
Earnings Date N/A
Average Daily Volume N/A
Listed on August 7, 2010


PUT Play Updates

Leggett & Platt - LEG - close 19.68 change -0.22 stop 21.75

Target(s): 19.85(hit), 19.40, 18.70 18.40
Key Support/Resistance Areas: 21.50, 20.50, 19.80, 19.00, 18.50
Current Gain/Loss: +46%
Time Frame: 1 to 2 weeks
New Positions: Yes, on strength

Comments:
8/14: LEG closed below the $19.80 support level I mentioned in Thursday's updates and our gain is now +46%. If there is weakness in the broader market early this week our $19.40 target could be hit fast, and it should give us a +65% gain so I suggest either taking profits or tightening stops to protect gains if we get there. I've added a more aggressive target of $18.40 for readers interested in riding this down farther but I doubt we get there before a some sort of bounce. You can always get back in later.

8/12: LEG hit our first target today and we now have a +33% gain in the position. The stock is finding support at the 7/19 and 7/20 lows which were just below $19.80. This is why my first target was $19.85. If it breaks here it should be a vacuum down to the $19.40 area which is our second target (raised 5 cents). This target should give us a +65% gain so I suggest either taking profits or tightening stops to protect gains if we get there.

8/11: LEG PUTS were initiated at the open for 75 cents as the stock traded below yesterday's low. LEG drifted down all day long and we currently have gain of +20%. Our targets are approaching which are near support areas so I suggest trailing or tightening stops on the way down to protect profits.

Current Position: Long September $20.00 PUT, entry was at $0.75

Annotated Chart:

Entry on August 11, 2010
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 1.45 million
Listed on August 10, 2010


Occidental Petrol. - OXY - close: 75.39 change: -1.07 stop: 81.05

Target(s): 74.00, 71.50, 67.50
Key Support/Resistance Areas: 75-74.00, 70.00, 65.00
Current Gain/Loss: N/A
Time Frame: Several Weeks
New Positions: Yes, trigger at $77.50

Comments:
8/14: Hope is not a good strategy when you are in a position, but I suppose it's OK if you're not in yet. I sure hope OXY bounces to $77.50 so our trigger to enter short positions is reached. All we want is a bounce in the stock so we can exploit it. There is so much overhead congestion, moving averages, trend lines, etc. to keep this stock in check. I want to remove the lower trigger to enter for now. If OXY breaks down prior to bouncing the stock could reverse on us so I don't to get trapped. I like the short set up on strength and suggest looking for a quick move down to the adjusted targets above. I will also add that OXY could bounce higher than $77.50. It really just depends on the strength in the oil sector and how far the broader market can bounce. A bounce much over $79.00 doesn't seem likely.

8/12: OXY came within 25 cents of our trigger to enter short positions. I think this is a good entry and there is a lot of overhead resistance to keep any additional strength in check. My comments from below remain the same.

8/11: Considering today's broad based sell off I am inclined to suggest we take advantage of any strength in OXY to initiate short positions. The S&P 500 closed above its 50-day SMA today so we could get a bounce in equities before the selling continues. OXY's high on 8/10 was $78.14. All of the stock's major moving averages are also overhead and a downward trend line that started on 6/21. I am suggesting we use a bounce to $77.50 or on weakness to $73.90 as a trigger to enter short positions, whichever occurs first.

Suggested Position: Buy September $70.00 PUT, current ask $1.29, etstimated ask at entry $0.75

Annotated Chart:

Entry on August XX
Earnings Date 10/21/10 (unconfirmed)
Average Daily Volume 4.4 million
Listed on August 7th, 2010


Procter & Gamble - PG - close: 59.82 change: -0.17 stop: 63.26

Target(s): 59.50, 59.05, 58.05, 57.25
Key Support/Resistance Areas: 59.00, 61.00
Current Gain/Loss: +44%
Time Frame: 2 to 3 weeks
New Positions: Yes, on strength

Comments:
8/14: Rallies in PG keep getting sold into. We have a nice gain in this position and it could turn into a big winner if PG breaks below $59.00 which is below our 2nd target. I'm inclined to hang on to this position to see if the selling begins, however, that probably means enduring a bounce this week. PG is also a defensive play so the decline in the stock may take a while. If we get down to $59.05 I suggest tightening stops too see if we can get more out of the trade. If we do get to this level we should have close to a +100% gain. That's hard to beat.

8/12: This morning PG came within 8 cents of reaching our 1st target before reversing with the market. Positions could have exited for a +60%. So I've raised that target 20 cents to $59.50 should PG retest this area. The PG chart looks good to the short side but there is support near $59.00. Tomorrow we get CPI and retail sales data and this could spark selling if the reports are bad. If PG gets down to $59.50 again it may break through this support. There is more support $59.00 which are the January and July lows. PG bounced hard at these levels so I've added $59.05 as a target as well. I would be inclined to take profits or at least tighten stops as PG approaches these levels. We now have a +44% gain so protect profits if the weakness continues.

Current Position: Long September $57.50 PUT, entry was at $0.36

Annotated Chart:

Entry on August 10, 2010
Earnings Date 10/28/10 (unconfirmed)
Average Daily Volume 2.5 million