Editor's Note:

The market's rebound has stalled. Does the downtrend resume? Or will stocks see some end-of-quarter window dressing?

We were expecting market weakness on Wednesday afternoon. Unfortunately DE and SRCL still managed to hit our stop loss. We did see WLT hit our trigger to buy puts.

-James

Current Portfolio:


CALL Play Updates

Forest Labs Inc. - FRX - close: 39.98 change: -0.17

Stop Loss: 36.75
Target(s): 39.00, 42.50
Current Option Gain/Loss: +150.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/22 update: FRX traded to $40.52 this morning before slowly drifting back toward round-number support at $40.00. I don't expect it to hold. FRX will likely fall back toward its prior trading range in the $39-38 area. FRX remains overbought and more conservative traders may want to take profits now and exit completely. I am not suggesting new positions at this time.

- Suggested Positions -

Long the August $37 call (FRX1120H37) Entry @ $1.40

06/21 new stop loss @ 36.75
06/20 new stop loss @ 35.75
06/13 1st target hit @ $39.00. August $37 call @ $2.85 (+103.5%)
06/11 New stop loss @ 34.90
06/10 Planned exit of June $37 call. exit $1.10 (+69.2%)
06/09 Prepare to exit the June calls on June 10th at the close
06/04 new stop loss @ 34.45
05/28 New stop loss @ 33.75

Entry on May 20th at $35.29
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 3.2 million
Listed on May 19th, 2011


SPDR Gold ETF - GLD - close: 150.99 change: +0.23

Stop Loss: 147.40
Target(s): 155.00, 159.75
Current Option Gain/Loss: - 1.8% & - 8.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/22 update: The GLD opened at $151.01 and almost made it to $152 before paring its gains. I don't see any changes from my prior comments. We can still launch positions now or if you're nimble enough then consider waiting for a dip near the trendline of higher lows in the $149-148 area. Our first target is $155.00.

- Suggested SMALL Positions -

Long July $150 call (GLD1116G150) Entry @ $2.74

- or -

Long Aug. $155 call (GLD1120H155) Entry @ $2.25

Entry on June 22 at $151.01
Earnings Date --/--/--
Average Daily Volume = 12.2 million
Listed on June 21, 2011


PUT Play Updates

Becton, Dickinson and Company - BDX - close: 86.39 change: -0.14

Stop Loss: --.--
Target(s): 80.50
Current Option Gain/Loss: -100.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/22 update: BDX traded toward resistance near $87 and then rolled over. This move can be used as a new entry point for puts but I am somewhat hesitant to launch new positions right here. Several of the short-term technical indicators look bullish.

NOTE: There appears to be no bid for the July $80 puts but that might be a bug on the CBOE website. Or it could be the fact we have less than four weeks before July options expire.

Since there is no bid for the option right now I am removing our stop loss.

- Suggested (SMALL) Positions -

Long July $80 put (BDX1116S80) Entry @ $0.50

06/22 The bid for our option has vanished. I am removing our stop loss on this trade.

Entry on June 13th at $84.95
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on June 11th, 2011


Diamond Offshore Drilling, Inc. - DO - close: 68.70 change: +0.68

Stop Loss: 70.55
Target(s): 64.50, 62.50
Current Option Gain/Loss: -39.7% & - 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/22 update: Shares of DO were upgraded this morning and the stock gapped open higher but the rally stalled. Shares found resistance right where we expected near the $70.00 level. This failed rally move today looks like a new bearish entry point to buy puts. I'm adding a second position tonight. We have a stop loss at $70.55. More conservative traders may want to tighten theirs closer to $70.00.

Earlier Comments:
Our targets are $64.50 and $62.50. FYI: Traders should note that the most recent data listed short interest at more than 14% of the float. That does raise the risk of a short squeeze should the stock suddenly find strength.

- Suggested Positions -

Long July $67.50 PUT (DO1116S67.5) entry @ $2.09

- Second Position -

Buy the July $67.50 PUT (DO1116S67.5) current ask $1.31

06/22 failed rally at $70 is a new entry point. add 2nd position
06/15 new stop loss @ 70.55
06/13 new stop loss @ 71.55

chart:

Entry on June 8th at $68.91
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on June 7th, 2011


Transocean Ltd. - RIG - close: 62.08 change: +0.19

Stop Loss: 66.15
Target(s): 58.00, 55.25
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/22 update: RIG managed a minor bounce on very low volume, which isn't too surprising since investors were in a wait-and-see mode with the FOMC meeting and Bernanke's press conference. I remain bearish here but would probably wait for a stronger failed rally type of move near the $64-65 area before launching positions.

We wanted to keep our position size small to limit our risk.

- Suggested (SMALL) Positions -

Long July $60 puts (RIG1116S60) Entry @ $1.32

06/20 RIG has hit $60. Cautious traders may want to take profits now (option @ +68%). The newsletter's target is $58.00

Entry on June 13th at $63.32
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 4.3 million
Listed on June 11th, 2011


SanDisk Corp. - SNDK - close: 42.54 change: -0.32

Stop Loss: 45.05
Target(s): 40.50, 36.00
Current Option Gain/Loss: + 2.7% & - 21.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/22 update: There was no follow through on yesterday's bounce in SNDK. I am not suggesting new positions at this time.

Our targets are $40.50 and $36.00, given enough time. FYI: The P&F chart for SNDK is bearish with a $30 target.

- Suggested Positions -

Long July $42.00 PUT (SNDK1116S42) Entry @ $1.10

- or -

Long July $40.00 PUT (SNDK1116S40) Entry @ $0.69

06/18 new stop loss @ 45.05
06/08 New stop loss @ 46.25

Entry on June 6th at $44.31
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 5.8 million
Listed on June 4th, 2011


T.Rowe Price Associates - TROW - close: 57.53 change: -1.21

Stop Loss: 62.05
Target(s): 55.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see Trigger

Comments:
06/22 update: Hmm.... TROW is reversing sooner than expected. We wanted to see a bounce toward resistance at $60.00 but shares immediately reversed this morning near its 20-dma. The stock underperformed with a -2.0% loss. Aggressive traders may want to consider buying puts now and using a stop above yesterday's high near $59.25. I don't want to chase it so we'll wait and see how TROW finishes this week before adjusting our strategy or dropping it as a candidate.

Our current strategy remains the same with a trigger to buy puts at $60.00.

Trigger @ 60.00

- Suggested Positions -

buy the July $60 PUT (TROW1116S60)

Entry on June xxth at $ xx.xx
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on June 13th, 2011


Walter Energy, Inc. - WLT - close: 109.96 change: +0.01

Stop Loss: 115.50
Target(s): 100.50
Current Option Gain/Loss: +17.5% & + 5.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/22 update: Excellent news! WLT rallied up to $112.40 and reversed. The stock closed virtually unchanged on the session. This is the failed rally we were looking for. Our trigger to buy puts was hit at $112.00 and I would still consider new positions now. We do not want to hold over the late July earnings report.

- Suggested Positions -

Long July $105 PUT (WLT1116S105) Entry @ 2.00

- or -

Long Sept. $100 PUT (WLT1117U100) Entry @ 4.85

chart:

Entry on June 22 at $112.00
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on June 18th, 2011


CLOSED BEARISH PLAYS

Deere & Co - DE - close: 81.57 change: -0.56

Stop Loss: 82.75
Target(s): 75.25, 71.00
Current Option Gain/Loss: -73.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/22 update: DE spiked to $83.00 this morning but failed to get past this level. Shares struggled with technical resistance at the exponential 200-dma and then eventually closed lower on the day. Our stop loss was hit at $82.75 closing our trade. More aggressive traders may want to re-open bearish positions given the failed rally at $83.00.

- Suggested Positions -

July $75 PUT (DE1116S75) Entry @ $1.52, exit $0.40 (-73.6%)

06/22 Stopped @ 82.75, option @ -73.6%

chart:

Entry on June 16th at $79.25
Earnings Date 08/17/11 (unconfirmed)
Average Daily Volume = 5.7 million
Listed on June 15th, 2011


Stericycle Inc. - SRCL - close: 87.97 change: +0.66

Stop Loss: 88.05
Target(s): 84.00, 81.00
Current Option Gain/Loss: -66.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/22 update: SRCL managed an afternoon rally through resistance near $88.00 and its 100-dma. Our stop loss was hit at $88.05. Our play is closed but I would keep SRCL on your watch list. A new failed rally near the 50-dma or $90.00 might be another entry point to buy puts.

- Suggested Positions -

July $85 PUT (SRCL1116S85) Entry @ $1.50, exit $0.50 (-66.6%)

06/22 stopped out @ 88.05, option @ -66.6%
06/21 Readers may want to exit early!
06/15 adjusted 2nd target to $81.00.
06/11 new stop loss @ 88.05
06/08 Exit June $85 puts. Bid @ $1.00 (+100%)
06/04 new stop loss @ 90.05

chart:

Entry on May 31st at $88.78
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 502 thousand
Listed on May 28th, 2011