Editor's Note:
Damage control has set in as this rally has obviously exceeded my expectations. We were stopped out of INFA today and I have made adjustments to targets on most positions. We've had a tough week in short positions after a very profitable last half of June. I'm confident we will get good exits on our current positions and get things back on track once we have more clarity of the next move in the market. I'll have June results posted this weekend. Please email me with any questions.

Current Portfolio:

BULLISH Play Updates

PowerShares DB Agriculture Fund - DBA - close 24.70 change +0.21 stop 24.28

Target(s): 24.60 (hit), 24.95
Key Support/Resistance Areas: 25.00, 24.70, 24.40, 23.55, 23.40
Current Gain/Loss: +3.35%
Time Frame: Several weeks
New Positions: No

7/13: DBA is getting close to hitting our target which may happen tomorrow. If it does we will close the positions. We will keep our current stop in place to give DBA room to work.

7/12: DBA is forming a bull flag and I am expecting the ETF to break higher. Call activity has been picking up in the ETF with 2,000 August contracts purchased today. This bodes well for our bullish position and I am looking for our final target of $24.95 to be hit, possibly this week. $24.60 is still a valid target that was hit last week and we have a relatively tight stop to protect against reversal.

7/10: We are hanging in here with DBA. I adjusted the stop down a few cents to $24.28 which is below Thursday's low and the 100-day SMA. This stop guarantees us of a winning position if DBA reverses lower. Our first target of $24.60 was hit on Thursday and our current gain is +2.68%. It appears DBA is consolidating prior to moving higher. We are looking for $24.95.

Current Position: Long DBA stock, entry was $23.90

Options Traders:
Suggested Position: August $23.00 CALLS

Entry on July 7, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 792,000
Listed on 7/6/10

Merck & Co - MRK - close 36.45 change +0.36 stop 34.79

Target(s): 37.20, 37.75, 38.60, 39.35
Key Support/Resistance Areas: 39.50, 38.75, 38.00, 36.35, 35.80
Current Gain/Loss: +1.67%
Time Frame: 1 to 2 weeks
New Positions: Yes

7/13: MRK closed above resistance of $36.35 and looks like it is headed towards our targets. If the broader market continues bouncing we should have no issues hitting our target(s) and MRK could also act as a defensive play if there is a pullback.

7/12: MRK traded down to $35.84 in early trading which triggered our long entry. The stock then drifted higher throughout the day. MRK appears to be forming a bull flag on its daily chart. A break above Thursday's high of $36.40 should get things moving higher relatively quick. Since we were able to get the lower entry trigger today I am going to offer a lowered 1st target of $37.20 which is a good place to consider at least consider tightening stops. I've also adjusted our primary target of $37.95 down 20 cents to $37.75.

Current Position: Long MRK stock, entry was at $35.85

Options Traders: August $36.00 CALLS

Entry on July 12, 2010
Earnings Date 7/30/10 (unconfirmed)
Average Daily Volume: 18 million
Listed on 7/10/10

Suntech Power Holdings - STP - close 10.50 change -0.07 stop 10.29 *NEW*

Target(s): 10.73, 10.93, 11.35, 11.90, 12.15
Key Support/Resistance Areas: 10.50, 9.90
Current Gain/Loss: -1.41%
Time Frame: Less than 1 week
New Positions: No

7/13: STP popped higher this morning and made a double on the intraday chart at $10.80 and that's all we got. Our target of $10.73 was hit and it remains a valid target. Today's pullback was on lighter volume than the recent advances. I think we may get a $10.93 print tomorrow which is where I suggest tightening stops or talking profits. I've tightened the stop to $10.29 which is below yesterday's low.

7/12: STP retraced the gains I was looking for which triggered our entry for long positions at $10.65. This morning Citigroup initiated coverage in STP with a sell rating while at the same time initiating TSL with a buy and YGE with a hold. This appears to be the main reason the stock sold off -7% today. There have been a slew of other downgrades from analysts in recent weeks which has beaten down STP so let's just say Citi is late to the party. I don't necessarily mind that because when the selling ends opportunities for long positions begin to surface as sellers wane and buyers appear. In other words STP has already taken the medicine from the previous downgrades and the most recent from Citi may begin to exhaust sellers again. From a technical perspective the bullish case remains intact as STP closed above its break out resistance level of $10.50. And if the market continues to bounce STP should see buyers step in. However, in lieu of today's news it is prudent to begin looking for an exit on this trade. I am going to raise the stop to $10.09 which is just below the 50-day SMA and I have also tightened the targets. $10.73 and $10.93 are intraday support/resistance levels and are good places to consider tightening stops or taking profits. Conservative traders should consider simply exiting positions. Going forward I plan to tighten the stops daily to see if we can turn this into a winning trade. NOTE: STP is a volatile stock and I view this as a speculative play. Please use proper position size to limit risk.

Current Position: Long STP stock at $10.73, entry was at $10.65

Entry on July 12, 2010
Earnings Date 8/19/10 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on 7/10/10

BEARISH Play Updates

Lululemon Athletica Inc. - LULU - close 39.13 change +0.26 stop 41.30 *NEW*

Target(s): 37.95, 37.20, 35.80
Key Support/Resistance Areas: 42.25, 39.75, 37.00, 35.16, 32.75
Current Gain/Loss: +0.05%
Time Frame: 1 week
New Positions: Yes

7/13: LULU managed to eek out a 26 cent gain today as the market catapulted higher. This is under performance and confirms my bearish outlook for the stock. We could get a little more bounce in this position but when the market pulls back LULU should go lower relatively quick. However, in the spirit of following the market we need to be careful and not get too greedy by expecting LULU to simply rollover and give us a big gain. As such, I've added $37.95 as the first target which just above yesterday's low. This level is -3% lower from our entry price and if you bought options they should return about +15% at $37.95. Tightening stops at this level is suggested to see if we cn get more out off the position.

7/12: Finally, LULU hit our trigger of $39.15 to enter short positions. The stock immediately lost $1.25 and then recovered. One thing is clear on the intraday charts and that is the volume when the stock was declining this morning was much greater compared to its recovery. I like the volume pattern and think LULU retests its lows before breaking higher. Should it break higher the 50-day SMA sits at $39.87 which should keep things under control. I've also listed a target of $37.20 which is just above a key support/resistance area of $37.00. Some might view this level as forming an inverse head and shoulders pattern on the hourly chart so it would be prudent to consider tightening stops at this level. This level will also produce a decent gain in the position.

7/10: LULU is getting ever so close to our entry. The stock traded to within 8 cents on Friday and backed off. The bounce over the past few days has been on extremely light volume showing a lack of participation. This is one of the most bloated retail stocks out there trading at a P/E of 38. It is a novelty retailer and sometimes the P/E doesn't matter so I will keep a tight leash on this and use a stop of $41.30 which is just above the 20-day and 50-day SMA's. LULU has not tested them from below since breaking through them in June. I like the short set-up and want to lower the entry trigger to $39.15. I have also adjusted the targets. I'm looking for LULU to make quick trip back down to test its lows and possibly break them.

Current Position: Short LULU stock, entry was at $39.15

Option Traders: August $35.00 PUTS

Entry on July 12, 2010
Earnings 9/9/2010 (unconfirmed)
Average Daily Volume: 1.89 million
Listed on July 1, 2010

PowerShares QQQQ Trust - QQQQ - close 45.33 change +0.58 stop 46.90

Target(s): 43.75, 42.55, 41.80, 41.05
Key Support/Resistance Areas: 46.77, 45.25, 44.46, 43.50, 42.50, 41.00
Current gain/loss: -2.33%
Time Frame: 1 to 2 weeks
New Positions: Yes

7/13: It appears the Q's are going to spike higher in the morning as a result of earnings from Intel. The NASDAQ 100 futures are currently up over 1% as of this writing. This equates to a price in the Q's of approximately $45.85. The recent patterns after Intel reports show significant market sell offs in the ensuing days after the initial spike. If you believe this time is different and we continue to go higher I suggest exiting early tomorrow or place a new stop above the highs of tomorrow. $46.15 gives you some room and is above the 200-day SMA (near QQQQ's close today) and the 50-day SMA's. But this level could also get picked off as a stop on a spike higher, only to see QQQQ reverse lower. I believe we will see our first target of $43.75 before our official stop of $46.90 so I am sticking with the original plan.

7/12: QQQQ backed off right at its 20-day SMA this morning which also corresponds to the ETF's February highs. This level is a logical reversal point for QQQQ, however, Intel reports earnings tomorrow after the bell so that is the wild card for the short term price direction. I've adjusted our near term target to $43.75 which is just above the lows on 7/8.

7/10: QQQQ is bouncing but I expect the selling to resume soon. In light of the choppy trading that I foresee I am going offer a near term target of $43.60 which is $1 lower than current levels. For readers in PUT positions they should be worth about $2.15 (entry was at $1.85) which would be a +16% gain. This target is near the June 8 low and may form an inverse head and shoulders pattern. I suggest being quick to tighten stops at this level to protect profits. QQQQ may bounce up to its 20-day or 50-day SMA just overhead before reversing so I suggest being patient. There was a lot of volume in the August PUT strikes on Friday and large blocks bought on the offer. This is a good sign for a move lower but earnings is the wild card.

Current Position: Short QQQQ stock, entry was at $44.30

Options Traders: August $45.00 PUTS

Entry on July 8, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 100 million
Listed on July 7, 2010

Sherwin-Williams - SHW - close 73.22 change +1.20 stop 76.70

Target(s): 71.90, 71.15, 70.50, 69.25
Key Support/Resistance Areas: 75.90, 73.50, 71.10, 69.00, 68.00, 66.50
Current Gain/Loss: -0.65%
Time Frame: 1 to 2 weeks
New Positions: Yes

7/13: SHW remains below a key resistance level near at $73.50. If we get some selling in the broader market SHW should go lower relatively quick. I've narrowed the targets and suggest tightening stops or exiting on weakness.

7/12: SHW pulled a repeat of Friday in that the stock opened higher and drifted lower the entire day. Any market weakness should send this stock lower towards our targets. I want to offer another target of $70.50 which is just above the resistance highs (which may now act as support) from 7/1 to 7/6. This level will give us a +3% gain and is an area to consider tightening stops to protect profits.

7/10: We opened short positions in SHW at the open on Friday. The stock proceed to drift lower the entire day. I am expecting the stock to reverse lower from here as it has rallied into resistance and its 20-day SMA from below. Our first target is $69.25.

Current Position: Short SHW stock., entry was at $72.75

Options Traders: August $70.00 PUTS

Entry on July 9, 2010
Earnings 7/22/10 (unconfirmed)
Average Daily Volume: 1.48 million
Listed on July 8, 2010

Starbucks Corp. - SBUX - close 25.94 change +0.67 stop 26.75

Target(s): 25.25, 24.85, 24.25, 23.70
Key Support/Resistance Areas: 26.50, 26.00, 25.25, 24.80, 24.00, 23.60, 22.50
Current Gain/Loss: -4.81%
Time Frame: 1 to 2 weeks
New Positions: Yes, with a tight stop

7/13: SBUX is just not giving us the pullback I anticipated. The stock has rallied +10% from its lows last week in five trading days. It bounced straight up from its 200-day SMA right into its 50-day and 20-day SMA's. I keep anticipating a reverse lower and if it doesn't happen soon I suppose the concerns of strapped consumers buying $5 latte's are a thing of the past. There is a gap to be filled up to $26.39 and that might be where this is headed before a turn back down. I've tightened the above targets and suggest we begin to exit positions on weakness. These levels are good places to at least tighten stops.

7/12: SBUX sold off this morning but drifted higher the remainder of the day. SBUX has resistance at current levels and I am looking for the stock to make a lower high and reverse to retest its lows.

7/10: SBUX has retraced some of its recent decline as the market has bounced. The stock is testing its 100-day SMA from below and the backside of its broken upward trend line for the first time since breaking in late June. The 100-day SMA has been an important reference point for the stock in 2010. We are also near an important support/resistance level of $25.25 so this is a logical place for SBUX to reverse back down. However, the broader market direction will most determine our fate on this position. A tighter stop could be placed at $25.80 but the bounce may go a little further so patience is suggested. I am looking for SBUX to make a lower high and reverse back down to at least retest its lows. I like new positions at these levels.

Current Position: Short SBUX stock, entry was at $24.25

Options Traders: August $25.00 PUTS

Entry on July 8, 2010
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on July 3, 2010


Informatica Corporation - INFA - close 26.30 change +0.90 stop 26.10

Target(s): 24.80, 23.82, 23.00, 22.75, 22.15
Key Support/Resistance Areas: 25.35, 24.60, 23.80, 23.25, 22.60, 22.00
Final Gain/Loss: -6.31%
Time Frame: 1 to 2 weeks
New Positions: Closed

7/13: Our stop was hit today in INFA and we are flat the position for a -6.31% loss. Simply put, the market has rallied much higher and faster than I anticipated. We never even got a pullback to give us chance to exit. So we are done with INFA and will move on to the next opportunity. Readers who may still have positions I would be looking to exit or tighten stops near today's low at $25.54. The stock should see this level prior to bouncing much higher but the market has been somewhat irrational. If history repeats itself INFA's recent rallies have been met with big and fast sell-offs.

7/12: INFA printed a topping tail candlestick on Monday and I am looking for the stock to move lower from here. My comments from 7/10 remain the same.

7/10: INFA has retraced about 50% of its recent decline and finds itself right at its 20-day and 50-day SMA's. I didn't think the stock would get much higher than $25.00 on any bounce but have been proven wrong. There is some congestion overhead to provide resistance and this is a logical place for the stock make a lower high and reverse, but the broader market direction will most likely determine our fate on this position. I have added a target of $24.80 for readers looking for a quick exit and to limit losses on this position. This is just above the 200-day SMA and the high from 7/6. This may provide some support on a pullback and is a good area to tighten stops.

Current Position: Short INFA stock, entry was at $24.55

Option Traders: August $25.00 PUT

Annotated chart:

Entry on July 6, 2010
Earnings 7/22/2010 (unconfirmed)
Average Daily Volume: 1.72 million
Listed on July 1, 2010