We are ready for whatever the market gives us on Wednesday.

Editor's Note:

The market is poised to move fast and I believe we are positioned to take advantage of any material downdraft. An upside surprise could be painful but with only two active put plays the damage should be minimal.

Regardless of market direction we should have a couple positions that profit. The rest of the week could see a strong directional move so be prepared and please have your stops in place.

Current Portfolio:


CALL Play Updates

Health Care REIT - HCN - close: 62.24 change: -0.01

Stop Loss: 59.85
Target(s): 64.75
Time Frame: exit prior to the Aug 6th earnings
New Positions: see below

Comments:
07/31/12 update: No change today and it may take a positive market to see the stock move much higher before earnings on August 6th.

Let's keep the faith and see if it can add to its gains. Support has been strong at $61 so the risk appears to be minimal.

FYI: The Point & Figure chart for HCN is bullish with a $70 target.

- Suggested Positions -

Long Aug $60 call (HCN1218H60) entry $1.55

Entry on July 24 at $61.15
Earnings Date 08/06/12 (confirmed)
Average Daily Volume = 1.5 million
Listed on July 23, 2012


Hess Corp. - HES - close: 47.16 change: -1.02

Stop Loss: 45.35
Target(s): 49.85
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/31/12 update: Hess declined with crude prices but is still holding much of the gains from last week. If the Fed acts, crude will rise and energy stocks follow crude prices. Conversely, if the Fed does not act the dollar will strengthen and crude prices will fall along with energy stocks.

- Suggested Positions -

Long AUG $47.50 call (HES1218H47.5) Entry $1.05

- or -

Long SEP $47.50 call (HES1222I47.5) Entry $2.02

07/26/12 triggered on gap open higher at $46.65

Entry on July 26 at $46.65
Earnings Date 07/25/12
Average Daily Volume = 4.3 million
Listed on July 25, 2012


PUT Play Updates

United Rentals, Inc. - URI - close: 28.91 change: -.26

Stop Loss: 31.65
Target(s): 23.00
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description
Comments:
07/31/12 update: URI returned to the support at $28.90 with a minor decline. A negative market will likely push it back to multi-month lows at $27.

FYI: The Point & Figure chart for URI is bearish with a long-term $17 target.

Trigger: None

Positions

Long Sep $26 PUT (URI1222U26) @ $1.25

Entry on July 30 at $ 29.70
Earnings Date 07/17/12
Average Daily Volume = 4.4 million
Listed on July 26, 2012


iShares Russell 2000 ETF - IWM - close: 78.41 change: -0.70

Stop Loss: 81.25
Target(s): 75.75
Time Frame: 2-4 weeks
New Positions: Yes, see below

Company Description
Comments:
07/31/12 update: I would say we are perfectly positioned for a negative Fed event. If the Fed fails to act and the ECB fails to satisfy the markets the IWM is poised to retest its lows from last week at $76. The wild card is the ADP employment and a big number could disrupt our plans.

The target is a decline to the June support at $75.

Trigger: IWM at $78.85, hit at 11:40 AM on July 39th

Positions

Long Oct $78 PUT (IWM1220V78) @ $3.26, Stop $81.25 on IWM

Entry on July 30 at $ 78.85
Average Daily Volume = 60.0 million
Listed on July 28, 2012


Akamai Technologies - AKAM - close: 35.19 change: -.64

Stop Loss: 36.75
Target(s): 32.00
Time Frame: 2-4 weeks
New Positions: Yes, see below

Company Description
Comments:
07/31/12 update: Akamai has not yet been opened. The entry trigger is a trade at $34.85. AKAM closed within 34 cents of that trigger so we are poised perfectly for a down market.

Why We Like It:
Akamai reported earnings of 43 cents last week that beat the street and raised guidance. The stock soared +25% on the news. That was on Thursday. Friday's market short squeeze failed to add any material gains to that spike BUT Monday's lackluster market also failed to produce a material decline in AKAM.

After a 25% spike well above the consolidation range of the last three months you would expect the spike to fade and profit taking appear. The raised guidance is probably what is holding shares up. However, if the Nasdaq begins to roll over on less than expected help from the ECB/Fed then profit taking could begin with a vengeance.

This is a high risk play. If we do get a dip to trigger our put entry and the market turns around the dip in AKAM could be seen as a buying opportunity.

I am looking for AKAM to retrace about half of its gains from last week if profit taking appears.

I am recommending we buy the Sept $34 put in anticipation of a possible decline to the June support at $32.

Trigger: Enter only with an AKAM trade at $34.85

- Suggested Positions -

Position: Long Sept $34 PUT (AKAM1222U34), currently $1.19

Entry on UNOPENED xx at $ xx.xx
Average Daily Volume = 3.3 million
Listed on July 30, 2012