Option Investor

Daily Newsletter, Wednesday, 7/15/2009

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Thank You Intel

by Jim Brown

Click here to email Jim Brown
The Intel earnings and outlook powered the markets with another giant short squeeze and set the stage for a critical resistance test when IBM and GOOG report on Thursday.

Market Stats Table

The focus was on tech stocks at the open and the short covering did not let up all day. The Intel (Nasdaq:INTC) news caused short covering in all the chip stocks and techs in general. As the indexes moved higher those that had shorted the broader market were forced to cover as well. A true short covering rally is a pleasure to watch as long as you are not short.

There were no earnings at the open to change the market sentiment as all eyes are focused on Thursday's earnings from IBM, GOOG, HOG, JPM and NOK. Today was a breather day for earnings watchers.

The economics today were led by the Consumer Price Index report for June. The headline number was a rise in prices by +0.7%. Economy.com was expecting a rise of only +0.2% compared to a gain of only +0.1% in May. Most of the June gains were due to an increase in gasoline prices. The energy CPI rose by +7.4% from May to June while the food CPI only rose +0.1%. The Core CPI, excluding food and energy, rose by only +0.2%. This is exactly what the Fed wants to see. Slightly above a deflation rate but a slow enough rise that inflation is not a problem. The year over year core rate at +1.1% is the lowest in over two years.

Consumer Price Index Chart

The NY Empire State Manufacturing Survey rose to the highest level in 11 months at only -0.6 in July. This was a substantial improvement from the -9.4 in June and the low of -38.2 in March. New orders rose to +5.9 from -8.1 and shipments rose to +11.0 from -4.8. Without a sudden deterioration of conditions the index should return to positive territory next month.

Empire State Manufacturing Survey Chart

The Industrial Production for June declined only -0.4%, up from a decline of -1.1% in May. This is the smallest decline since the crisis began in 2008. Overall production output has fallen -15.1% from its peak and ranks with the most severe recessions ever recorded. However, capacity utilization fell to 68.0% and the lowest level during this recession. That is only 0.2% below May so the rate of decline is slowing. A lot of the decline continues to be auto production which fell again by -2.6%. This should correct next month as GM and Chrysler increase output at some plants that were closed for most of Q2.

Industrial Production Chart

Crude oil inventories continued to decline with a drop of -2.8 million barrels for the week to 344.5 million barrels. Crude levels have fallen significantly in nine of the last ten weeks. Inventories topped at 375.3 million barrels back on May 1st. At 344.5 million barrels today that is still 16% above year ago levels. Distillate inventories including jet fuel and diesel are 26.7% above year ago levels. Until there is a serious increase in economic activity there is little reason for a sustained rally in crude. Global demand is still about 1 mbpd below production so global inventories are increasing. It would be even worse if China were not currently increasing their reserves by 160%.

EIA Oil Inventory Chart

The biggest report for the day was the FOMC minutes for the June Fed meeting. The minutes showed that the Fed was concerned the economy was still weak and susceptible to further shocks. The continued uneasiness in the financial markets was still a problem for the Fed. The sudden decline of CIT Group (Nyse:CIT) this week is an example.

CIT stock was halted Wednesday afternoon as rumors of a bankruptcy or bailout made the rounds. CIT has been on the brink of bankruptcy due to a decline in asset values as its loan portfolios deteriorate. The Treasury Dept, Federal Reserve and FDIC have been meeting to try and find a way to help CIT. The sharp decline in the stock this week came on increased worries that liquidity at CIT may have worsened to quickly for the regulators to be of help. Most consumers believe that the financial crisis is over but there are still a long list of companies in trouble and the Fed is concerned there may still be shocks to the system.

However, the Fed was optimistic in the minutes saying real consumer spending had firmed in the second quarter and the pace of contraction was moderating. They believed that single-family housing starts had neared a bottom although home inventories were still a problem. Despite a narrowing of credit spreads the Fed was still concerned about the health of the financial sector and interbank lending.

The Fed discussed ways to remove the rate accommodation (raise rates) and remove liquidity from the market when the time was right. Given the amount of assets they have put on their balance sheet this will be no small task. They did indicate they did not expect to begin removing liquidity or raising rates until next year.

The Fed raised its projections for 2009 GDP growth to -1.5% to -1.0% from -2.0% to -1.3%. For 2010 they raised the estimate to +3.1% from +3.0%. They also raised their projections for the unemployment rate to 9.8%-10.1% from 9.2%-9.6%. As long as the unemployment rate is rising we can expect the Fed to remain on hold.

Traders held their breath while the FOMC minutes were disseminated and the market sank only slightly before continuing its upward move. There was no sell the news event as we normally see from the minutes release. Analysts believed this was due to the slightly more optimistic tone and the comments about not changing its bias until early 2010.

In stock news trucker JB Hunt (Nasdaq:JBHT) lost more than 10% after its second quarter profit fell by more than half and missed street expectations. JBHT earned 23 cents after items and analysts were expecting 31-cents. JBHT said customer shipping bids were particularly low.

JBHT Chart

Capital One (Nyse:COF) said credit card delinquencies had improved and defaults were less than expected. COF said this was the fourth straight month of improvements in delinquencies. Defaults in June fell to 4.77% from 4.9% in May.

American Express (Nyse:AXP) said accounts 30 days past due shrank to 4.4% of total loans for June after a 4.7% rate in may and 4.9% in April. AXP charge offs improved slightly to 9.9% from 10.0% the prior month. Capital One's charge off rate rose to 9.73% from 9.41%. The news prompted yet another short squeeze in COF with a +12% gain and +11% in AXP.

Boeing (Nyse:BA) said it would have to lay off 1,000 additional workers because of cutbacks in Defense Department spending. Boeing is the second largest defense contractor and said they would have to bring the staffing requirements inline with government spending. Lockheed said it would cut 600 workers for the same reason. The administration is cutting back on missile defense programs and the Future Combat Systems program is being restructured.

In the "you can't make this up" category the former stock of GM prior to bankruptcy changed symbols again to (MTLQQ). It is now called Motors Liquidation Company. The symbol changed because regulators were concerned that people were buying the stock of GMGMQ and thinking it was tied to GM in some way. I have told you here several times that the old GM stock is worthless. Now regulators are also saying it is worthless but changing the symbol so people can still trade it. Go figure? FINRA and the SEC issued a full page warning about it. Read Warning Here FINRA said as recently as last Friday newsletters and promoters were touting the purchase of the GMGMQ stock. The price of he stock dropped -52% because of the warning but 102 million shares still traded. There is a sucker born every minute.

Motors Liquidation Chart

American Airlines (Nyse:AMR) posted earnings that beat the street with only a -$1.14 loss compared to analyst estimates for a -$1.28 loss. Passenger revenue fell -21% and obliterated the savings coming from the cheaper fuel. If you could have looked into the future last July 11th with oil at $147 you would have thought that $60 oil on July 11th 2009 would be a major windfall for the airlines and they would surely make money. You would have been wrong despite the massive downsizing of the U.S. route system and available capacity. Planes are flying full with long lists of standby passengers but there are dramatically fewer planes flying. AMR said bookings for the rest of 2009 are still falling and running behind 2008 levels. AMR said revenue from additional fees like checking bags and onboard food rose +7.4% to $565 million for the quarter. American is rated as the third most likely to fail during a liquidity crisis behind US Airways and United.

My wife came back from Chicago O'Hare to Denver on Monday night and there were 130 standby passengers trying to get on her United flight to Denver. United has a flight from Chicago to Denver almost every hour and there was still not enough capacity. To top that off they lost her luggage and the luggage of about 10 other passengers on the same flight. Fortunately it arrived a couple hours later on another United flight.

American Airlines Chart

Late today computer industry tracker IDC announced that PC sales fell less than expected in Q2. IDC said shipments fell by -3%, which was better than the forecast of -6% decline. Gartner, which also tracks computer sales, estimated Q2 sales declined -5% but that was better than their forecast for a -10% drop. Both now expect positive PC growth by Q4.

Earnings are still going to be the focus on Thursday with IBM, and HOG. So far there have been 33 S&P-500 companies report. 67% beat estimates, 24% missed expectations and 9% reported inline. Beat in mind that the best earnings are normally those first to report. For tomorrow most analysts believe Google (Nasdaq:GOOG) will beat estimates and they also believe GOOG is priced to perfection with the +$43 gain over the last week to close at $438 today. Resistance is $440 so most players would be taking profits here.

(Nyse:IBM) is widely expected to beat expectations but like Google they have risen about 10% over the last week to close at $107 today. Resistance on IBM is $110.

Harley Davidson (Nyse:HOG)is the wild card. This high-ticket consumer discretionary item could show some weakness in sales. Getting a loan for a $20,000-$40,000 bike could be a challenge and many workers who would normally be lusting over the new models are just trying to make the house payment after losing their jobs. If Harley says anything positive about sales trends it would be a very positive economic indicator. Expectations are low so volatility could be high.

Earnings Calendar

Fund flows for Q2 totaled $136 billion and the biggest influx of cash in over two years. This cash came in on the rebound and some believe that means the eager money is already invested. However, there is still plenty of cash on the sidelines and you can bet those investors are watching this weeks rally and praying they will get another chance for a better entry later this summer.

Remember, this is option expiration week and much of this rally is related to short covering of option positions. If you were writing covered calls on your long stock and thinking the spring rally was over then you are really stressing today. After three days of gains it appears those calls that were comfortably out of the money last week are now in the money and you are in danger of losing your stock. You can bet that thousands of investors are clawing back those calls or buying additional stock to use when those calls are exercised. Never underestimate the power of an option expiration in the same week as a major earnings surprise. The best laid plans of mice and men sometimes go astray.

The internals are suggesting this rally is over extended. The TRIN at 0.34 and TRINQ at 0.32 are definitely in seriously overbought territory. These levels suggest an immediate bout of profit taking but that could be resolved in just a few minutes at the open. The VIX actually went up on Wednesday instead of down. Normally when there is a strongly bullish rally the VIX implodes because everyone is bullish. This was not the case today. The VIX gain nearly a point and that indicates there was a lot of put buying as the rally progressed. Quite a few people are not convinced this rally has staying power.

The Dow rallied +256 points to close just over strong resistance at 8600. This is a critical resistance level and it will probably take another serious earnings surprise to keep it going higher. JPM, BIIB, MAR, MTG and HOG all report in the morning before the open so that will be the focal point for the continued rally. JPM and HOG are probably the most critical for continued market sentiment.

IF the Dow can move over 8600 then it will find very strong resistance at 8800 and again at 9000. The S&P is a clone of the Dow with major resistance at 930-950. It is too early to tell if the change in market sentiment from the earnings surprises will power a summer rally over those levels once the short covering ends. The Dow is up +625 points or roughly +8% in the last three days. The S&P gained +7%. By any metric this is seriously overbought in the short term. Even if there is a major sentiment reversal in progress we should see a pause to reload. That is especially true because this is an expiration week. I would definitely not chase the market here and let's see what happens after expiration week passes.

Dow Chart

S&P-500 Chart

The Nasdaq rallied +3.5% or +63 points after the Intel earnings. Add in the comments from Gartner and IDC and tech appears bullet proof. The rally overcame the downtrend that had produce a new lower low the prior week. Now the Nasdaq appears ready to test critical resistance at 1870 and a breakout there would be very bullish. Coming the day before expiration with IBM and GOOG earnings anything is possible.

Nasdaq Chart

For external events on Thursday we have former Treasury Secretary Hank Paulson giving testimony to lawmakers on the BAC/MER acquisition controversy. That testimony begins at 9:AM and is sure to be contentious but probably not market moving. At 10:00 we get the Philly Fed Survey and official expectations are for a sharp decline in activity with the headline number falling from -2.2 to -10.0. This could be a brown shoot that could cool economic expectations. However, an upside surprise could be very positive. I suggest not chasing the market and another strong day could set the stage for a short term put play for a brief pullback. The strongest earnings are the first ones and the sentiment can change just as quickly to the downside. I am a watcher today rather than a buyer.

Jim Brown

New Plays

Building Materials & Shipping

by James Brown

Click here to email James Brown


Ameron Intl. - AMN - close: 69.24 change: +2.70 stop: 64.95

Why We Like It:
AMN sells various building materials and supplies around the world. Shares broke out over resistance in the $60-62 zone in late June. Since then it has been consolidating sideways under new resistance at $70.00. Now the stock looks poised to begin a new leg higher. The Point & Figure chart is bullish with an $82 target. The July 1st high was $70.25. I am suggesting readers buy AMN at $70.50. Our target is $79.50. My time frame is six to eight weeks. I do consider this somewhat aggressive because AMN does not trade with a lot of volume.

Annotated chart:

Entry on      July xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          09/21/09 (unconfirmed)    
Average Daily Volume:       150 thousand
Listed on  July 15, 2009    

Diana Shipping - DSX - close: 14.29 change: +0.29 stop: 12.70

Why We Like It:
The Baltic Dry Goods index is starting to curl higher again and the shipping stocks are bouncing off their lows. This Greek shipping company just broke through resistance at $14.00 and its 200-dma (currently 13.78). I am suggesting readers buy DSX on a dip in the $13.80-13.50 zone. We'll use a stop loss at $12.70. Our first target is $16.40.

Annotated chart:

Entry on      July xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          08/06/09 (unconfirmed)    
Average Daily Volume:      1.27 million 
Listed on  July 15, 2009    

In Play Updates and Reviews

Semiconductors lead the market higher

by James Brown

Click here to email James Brown

Editor's Note:

There were a lot of investors, both big and small, that were short stocks (and the market) going into this week. A lot of them were still short this morning. When the global markets around the world began to rally and the U.S. markets opened higher there was a rush for the exits that never slowed down. We had several bearish plays get stopped out.

BULLISH Play Updates

Double-Long Oil ETN - DXO - close: 3.74 change: +0.29 stop: 3.28

Crude oil has finally begun to bounce thanks to a breakdown in the dollar. The DXO gained 8.4% and is now challenging its 10-mda and will soon challenge its 200-dma.

Our first target is $3.90. Our second target is $4.20. We want to exit the majority of our position at the first target. FYI: Keep an eye on the U.S. dollar. A weak dollar should boost oil prices.

Entry on      July 09 at $ 3.48 /gap down entry
                              /originally listed at $3.60
Change since picked:     + 0.27   			
Earnings Date          00/00/00 
Average Daily Volume:      12.4 million 
Listed on  July 09, 2009    

MEDNAX Inc. - MD - close: 42.85 change: +0.19 stop: 41.90 *new*

We should be careful here. The market soared almost 3% today and MD only gained 0.44%. That's a warning. I am raising our stop loss to $41.90. Our first target is $47.40.

Entry on      July 01 at $43.01 *triggered       
Change since picked:     - 0.16   			
Earnings Date          08/03/09 (unconfirmed)    
Average Daily Volume:       367 thousand
Listed on  June 30, 2009    

Morgan Stanley - MS - close: 28.80 change: +0.92 stop: 25.95 *new*

Readers may want to start taking profits in MS right here above $28.00. The stock hit $29.33 this afternoon and pared its gains to just 3.2%. Shares already look short-term overbought. I'm not suggesting new bullish positions and we're raising the stop loss to $25.95. MS has exceeded our first target at $27.75. Our second target is $29.75. We don't want to hold over the late July earnings so the play may close early.

--New Trade, buy dip @ 25.25 --
Entry on      July 08 at $25.25 *triggered       
Change since picked:     + 3.55
                              /1st target hit @ 27.75 (+9.9%)
Earnings Date          07/22/09 (unconfirmed)    
Average Daily Volume:      29.4 million 
Listed on  June 23, 2009    

NATCO Group - NTG - close: 33.40 change: +1.53 stop: 29.75

Energy stocks were in rally mode with the market and oil both rising sharply. NTG gapped open at $32.56 (our trigger was 32.55) and the stock eventually closed with a 4.8% gain. More conservative traders may want to consider adjusting their stop loss a little higher. If you did not open positions this morning I would wait for a dip before launching new plays. There is some resistance at $34.00 but our target is $37.50. We do not want to hold over the early August earnings report.


Entry on      July 15 at $32.56 *triggered/gap higher entry
Change since picked:     + 0.84   			
Earnings Date          08/03/09 (unconfirmed)    
Average Daily Volume:       270 thousand
Listed on  July 14, 2009    

Ross Stores - ROST - close: 43.14 change: +1.30 stop: 39.95 *new*

ROST is soaring to new all-time highs. The stock gained 3.1% today. I am raising our stop loss to $39.95. Our first target is $45.75. Our second target is $49.45. My time frame is about six weeks.

Entry on      July 13 at $41.60 
Change since picked:     + 1.54   			
Earnings Date          08/20/09 (unconfirmed)    
Average Daily Volume:       2.4 million 
Listed on  July 13, 2009    

Tupperware - TUP - close: 28.09 change: +0.73 stop: 24.95

No luck. We were betting on a pull back before TUP moved higher. Our entry point is at $26.50. More aggressive traders may want to chase it here. I'm suggesting readers wait. Our target is $29.75. The Point & Figure chart is very bullish with a $56 target but we don't want to hold over earnings.

Entry on      July xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          07/22/09 (confirmed)    
Average Daily Volume:       521 thousand
Listed on  July 14, 2009    

Western Digital - WDC - close: 27.69 chg: +1.41 stop: 24.60

Tech stocks were leaders thanks to Intel's better than expected earnings report. WDC gapped open higher at $27.09 and rallied to new multi-month highs. Our first WDC target is $29.75.

Entry on      June 25 at $26.10 *triggered       
Change since picked:     + 1.59   			
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       4.6 million 
Listed on  June 24, 2009    

BEARISH Play Updates

Gamestop - GME - close: 21.64 change: +0.01 stop: 22.65

GME continues to under perform. The stock rallied to resistance at $22.00 and failed. This could be another entry point but I hesitate to launch new bearish trades with the market melting higher.

GME has now hit our first target at $22.05 and our second target at $20.25. We are now aiming for our third and final target at $18.15.

Entry on      June 02 at $24.32 
Change since picked:     - 2.68
                              /1st target hit @ 22.05 (-9.3%)
                             /2nd target hit @ 20.25 (-16.7%)
Earnings Date          08/20/09 (unconfirmed)    
Average Daily Volume:       6.3 million 
Listed on  June 02, 2009    

Gen-Probe - GPRO - close: 39.85 change: +0.06 stop: 43.55

GPRO is under performing as well. The stock tried to breakout over $40.00 but reversed and barely closed in positive territory. I'm not suggesting new positions at this time. Our first target is $38.05. Our second target is $35.25. FYI: The P&F chart is bearish with a $32.00 target.

Entry on      June 23 at $42.03 /gap higher entry
                             /originally listed at $41.64
Change since picked:     - 2.18   			
Earnings Date          07/30/09 (unconfirmed)    
Average Daily Volume:       449 thousand
Listed on  June 23, 2009    

Humana Inc. - HUM - close: 28.52 change: +0.24 stop: 31.05

The plan is to open bearish positions on a bounce into the $29.50-30.00 zone. Our target is $25.25.

Entry on      July xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          08/03/09 (confirmed)    
Average Daily Volume:       3.1 million 
Listed on  July 14, 2009    

Intl. Speedway - ISCA - close: 25.41 chg: +0.77 stop: 27.05

The ISCA has bounced back toward resistance near $25.50 but it has also rallied back above its 50-dma and 200-dma. I am tempted to launch new bearish positions right here but I would hesitate with the market in rally mode.

I'm suggesting a stop loss at $27.05 but more conservative traders may want to try a stop closer to $26.00. Our first target is $22.10. Our second target is $20.25. My time frame is six to eight weeks.

Entry on      July 09 at $24.75 *triggered       
Change since picked:     + 0.66   			
Earnings Date          07/07/09 (confirmed)    
Average Daily Volume:       342 thousand
Listed on  July 08, 2009    

Medtronic Inc. - MDT - close: 34.54 change: +0.79 stop: 35.20

The bounce continues and MDT has now cleared its 200-dma and the $34.00 level. I'm not suggesting new positions at this time. We'll wait and watch for a failed rally in the $34.00-35.00 zone. More conservative traders may want to just exit early right now and step to the sidelines to wait for a new entry point. Our first target to take profits is $30.10. Our second target is $28.25.

Entry on      July 11 at $32.80 
Change since picked:     + 1.74   			
Earnings Date          08/18/09 (unconfirmed)    
Average Daily Volume:       6.3 million 
Listed on  July 11, 2009    

Raytheon - RTN - close: 44.52 change: +0.29 stop: 45.75

Is the rally in RTN running out of steam? The S&P 500 gains nearly 3% but RTN only gains 0.6%. The stock should have resistance near $45.00 and again near $45.50. Wait for this bounce to roll over before considering new bearish trades. Our first target is $40.25. The P&F chart is very bearish with a $13 target.

Entry on      June 24 at $44.22 
Change since picked:     + 0.30  			
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       3.5 million 
Listed on  June 24, 2009    

Walgreen Co. - WAG - close: 29.99 change: +0.59 stop: 30.51

More conservative traders may want to exit early right here. WAG still has resistance at its 50-dma and it failed to close over $30.00 today but the stock looks poised to move higher. I am not suggesting new bearish positions at this time. Our first target is $26.10.

Entry on      July 11 at $28.84 
Change since picked:     + 1.15   			
Earnings Date          09/21/09 (unconfirmed)    
Average Daily Volume:       8.4 million 
Listed on  July 11, 2009    

Homebuilders ETF - XHB - close: 11.90 change: +0.51 stop: 12.10

The short-covering was widespread in the homebuilders. The XBH soared 4.4% and is now testing resistance near $12.00 and its 200-dma. I am not suggesting new positions at this time. Our target is $10.10. I am setting a secondary target at $9.10 but I strongly suggest readers take some money off the table at $10.10.

Entry on       May 23 at $11.96 
Change since picked:     - 0.06   			
Earnings Date          00/00/00
Average Daily Volume:        10 million 
Listed on   May 23, 2009    


3x Energy Bear ETF - ERY - close: 22.31 change: -2.69 stop: 23.30

The rally in oil stocks was strong enough to send the ERY to a 10.7% loss. We were stopped out at breakeven (23.30). ERY had exceeded our first target at $27.40.


Entry on      July 02 at $23.30 *triggered       
Change since picked:     + 0.00<-- stopped out @ 23.30
                              /1st target hit @ 27.40 (+17.5%)
Earnings Date          00/00/00 
Average Daily Volume:       4.0 million 
Listed on  July 01, 2009    


DuPont - DD - close: 26.26 change: +1.43 stop: 26.26

The market's widespread rally sent DD to a 5.5% gain. The stock barreled past resistance at $26.00 at $26.25 and at a handful of major moving averages. This is a big bullish breakout for this stock.


Entry on      June 16 at $25.20 
Change since picked:     + 1.06 <-- stopped out @ 26.26 (+4.2%)
Earnings Date          07/21/09 (confirmed)    
Average Daily Volume:       9.1 million 
Listed on  June 16, 2009    

iShares Mexico - EWW - close: 37.61 change: +2.17 stop: 38.05

The EWW still has serious resistance at $38.00 but the sheer volume behind today's rally and bullish breakout over resistance is a reason to exit. Normal volume is 3.9 million shares and today EWW traded over 11 million. Exit early!


Entry on      June 22 at $34.92 
Change since picked:     + 2.69<-- exit early (+7.7%)
Earnings Date          00/00/00 
Average Daily Volume:       3.9 million 
Listed on  June 22, 2009    

iShares Materials - MXI - close: 47.14 change: +2.14 stop: 47.50

It's time to exit early our MXI play. Commodities were very strong and with the dollar breaking down the rally could continue. MXI had exceeded our first target at $44.00.


Entry on      June 16 at $47.55 
Change since picked:     - 0.41 <-- exit early (-0.0%)
                              /1st target hit 44.00 (-7.4%)
Earnings Date          00/00/00 
Average Daily Volume:       170 thousand
Listed on  June 16, 2009    

PACCAR Inc. - PCAR - close: 31.56 change: +1.22 stop: 31.26

The market's short covering was very sharp this morning and PCAR quickly broke through the $31.00 level and hit our stop loss.


Entry on      July 08 at $28.90 *triggered       
Change since picked:     + 2.36<-- stopped out @ 31.26 (+7.4%)
Earnings Date          07/21/09 (unconfirmed)    
Average Daily Volume:       4.1 million 
Listed on  July 07, 2009    

Steel Index - SLX - close: 42.72 change: +2.81 stop: 42.65

We were correct in expecting a bounce in the SLX but it looks like our stop loss was too tight. Shares hit our trigger to short the SLX at $41.50 and then our stop loss to cover at $42.65 in the same day.


Entry on      July 15 at $41.50 *triggered       
Change since picked:     + 1.15 <-- stopped out @ 42.65 (+2.7%)
Earnings Date          07/23/09 (unconfirmed)    
Average Daily Volume:       297 thousand
Listed on  July 06, 2009    

TTM Tech. - TTMI - close: 9.04 change: +0.46 stop: 9.01

Semiconductors helped lead the market higher thanks to Intel's earnings report. TTMI immediately spiked higher this morning and broke through the $9.00 level closing this play.


Entry on      July 11 at $ 8.25 
Change since picked:     + 0.76<-- stopped out @ 9.01 (+9.2%)
Earnings Date          07/29/09 (unconfirmed)    
Average Daily Volume:       378 thousand
Listed on  July 11, 2009    

S&P Retail SPDRs - XRT - close: 28.62 change: +0.82 stop: 28.45

The retail stocks have continued to rally in spite of terrible same-store sales numbers and a struggling consumer. The XRT broke out to new four-week highs and hit our stop loss at $28.45.


Entry on      July 07 at $26.07 
Change since picked:     + 2.38<-- stopped out @ 28.45 (+9.1%)
Earnings Date          00/00/00 
Average Daily Volume:        19 million 
Listed on  July 07, 2009