Current Portfolio:

BULLISH Play Updates

Bally Technologies - BYI - close 34.96 change -0.41 stop 32.30

Target(s): 35.75, 36.60, 37.50
Key Support/Resistance Areas: 37.50, 36.75, 35.75, 34.20, 32.50
Time Frame: Several Weeks

7/27: We are waiting for our trigger to enter long positions at $34.30. One of BYI's peers (IGT) reported earnings after the bell today that was in line with expectations but they missed revenue slightly and narrowed guidance. IGT is getting hit in the after market and this will probably hurt BYI tomorrow. However, BYI trades at a much lower PE ratio than IGT and our entry trigger of $37.30 is near a prior resistance area which should now act as support. I still like the set-up and suggest we take advantage of the weakness should BYI trade down to this level.

7/26: BYI broke out of a primary downtrend line today that began on 5/13. The stock closed +4% higher on the day but I expect a pullback with the broader market and suggest readers initiate long positions if BYI trades down to $34.30. The $34.30 level is just above a resistance area from the past several weeks and there is also a newly formed upward trend line that should act as support if BYI retraces some of today's gains. I'm looking for BYI to trade up to its 50-day SMA which is above our first target of $36.70. If we get filled and BYI trades to our first target the gain would be just shy of +7%. Our stop will be $32.30 and it will be adjusted once we are in the position and have a better reference point to move it up.

Suggested Position: Long BYI stock if it trades to $34.30

Options Traders: September $35.00 CALL, current ask $2.10, estimated ask at entry $1.75

Entry on July xx
Earnings 8/12/10 (unconfirmed)
Average Daily Volume: 1.38 million
Listed on July 26, 2010

ProShares UltraShort 20 YR Treasury - TBT - close 37.22 change +0.70 stop 34.25

Target(s): 37.50, 38.00, 39.25, 40.50, 41.95
Key Support/Resistance Areas: 42.00, 41,00, 39.70, 38.25, 37.55, 34.65
Current Gain/Loss: +1.94%
Time Frame: Several Weeks
New Positions: Yes

7/27: TBT broke above its most recent downtrend line and closed +1.92% higher on the day. The next level of resistance is $37.50 to $38.00 which is just below its 50-day SMA. TBT will most likely find resistance in this area. Our first target is $37.50 which is not a bad place to consider taking profits or tightening stops. For options traders our current gain is +30.9% and at $37.50 it should be about +42%. Ultimately I expect TBT to trade up to the $39.00 to $41.00 level which is near our more aggressive targets. However, it will not do this in a straight line. So taking some profits off of the table or tightening stops is a good strategy. I plan to officially tighten the stop when there is a better reference point but be aware that there should be a pullback in the $37.50 to $38.00 level.

7/26: TBT was initiated at the open. The ETF is finding some resistance at its secondary downtrend line but it appears it is only a matter of time before this is broken and TBT breaks to the upside. My comments from the play release remain the same.

7/24: I think bonds are way overvalued and are due for a correction. TBT is an leveraged inversely correlated instrument. Typically bond prices move opposite of stock prices, i.e. as the stock prices decline prices of bonds generally move higher and bond yields move lower, and vice-versa. So a long play in TBT is a bet that bond prices will decline and bond yields will rise which means that money will be flowing out of the bond market and probably into the stock market. In general, bonds are slow movers so TBT gives you more bang for your buck and is highly liquid with average daily volume of about 8 million shares. TBT mad a double bottom on 7/1 and 7/21 and I believe it is poised to move higher. The ETF closed above its 20-day SMA and a prior resistance level at $36.30. TBT has a downtrend line to deal with but I am not expecting it to experience too much trouble here. Our immediate target is $37.50 which near a prior resistance level and just under the ETF's 50-day SMA. TBT will probably find resistance there and when it finds its footing and moves higher we will have a reference point to trail the stop higher. My intention is that this trade could last several weeks and I think TBT could make a run up to its October 2009 lows which is near $42.00. Interest rates are at all time lows and I just don't see them going any lower which will bode well for a long position in TBT. Our stop is $34.25 which is below the YTD lows. NOTE: If there is weakness in equities early this week TBT will probably pullback so patience is most likely needed. A lower entry could be considered in the $36.00 area but I'm not certain we will get it.

Current Position: Long TBT stock, entry was at $36.51

Options Traders: September $37.00 CALL

Entry on July 27, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 3.8 million
Listed on July 24, 2010

BEARISH Play Updates

Crown Holdings - CCK - close 27.73 change +0.14 stop 28.38

Target(s): 27.60(hit), 27.35, 27.00, 26.80
Key Support/Resistance Areas: 27.35, 27.00, 26.25, 25.90, 25.50, 25.00
Current Gain/Loss: -1.12%
Time Frame: 1 week
New Positions: No

7/27: I'm sticking with the set-up in CCK and expect there to be weakness in the broader market. This should allow us to exit positions at a better. Our target of $27.60 was hit again and CCK printed a lower low and lower high than yesterday's candle. $27.60 remains a valid target and I suggest tightening stops if it gets down there again.

7/26: CCK closed down -1.14% and hit our target of $27.60 this afternoon. I expect there to be a pullback in the broader market and I think we will be able to exit positions at a better price. If this correction comes I suspect it may be fast so please use the above targets as a guide to tighten stops or exit positions. My comments from 7/24 have not changed.

7/24: My thesis of a daily reversal bar and pullback in CCK has failed so far. We have a tight stop overhead to limit losses should the stock continue defying gravity. CCK gained about +10% last week and it is way overdue for a retracement. The stock (and the broader market in general) need a retracement to regain some steam before there can be any sustained move higher. I suspect the market will do this early next week which is when I suggest we exit positions. I have listed four tight targets above which can be used as a guide to tighten stops and exit positions. Ideally, trailing stops down will get the most out of this trade and protect against the hard reversals we have been experiencing lately. Our final target of $26.80 is close to a gap higher on 7/22 that needs to be filled and would produce a decent gain in the position. The small caps need to pullback and I suspect they will prior to moving much higher.

Current Position: Short CCK stock, entry was at $27.56

Options Traders: September $25.00 PUTS

Entry on July 22
Earnings 10/7/10 (unconfirmed)
Average Daily Volume: 1.43 million
Listed on July 21, 2010

SPDR S&P 500 ETF - SPY - close 111.55 change -0.01 stop 113.55

Target(s): 110.30, 109.50, 108.60, 107.75
Key Support/Resistance Areas: 113.20, 111.65, 110.00, 109.50, 108.55
Current Gain/Loss: +0.58%
Time Frame: 1 to 2 weeks
New Positions: Yes

7/27: The gap higher in the S&P 500 today allowed us to enter short positions in SPY at a better price. SPY drifted lower most of the day and I am expecting more downside, at least in the near term. I am going to offer a higher first target at $110.30 which is just above the mid-July highs. SPY will probably bounce at this level and it is a good place to protect against reversal. A tighter stop could be placed at $112.55 which is just above today's highs.

7/26: SPY has rallied right into resistance and its 200-day SMA from below. This is a logical place for SPY to turn back lower towards its 50-day SMA. We are playing for a retracement which I think SPY will do prior to moving much higher. The bottom line is that SPY is need of healthy pullback before it can move much higher. I've chosen a stop of $113.55 which is above the June highs and the 100-day SMA.

Current Position: Short SPY stock, entry was at 112.20

Options Traders: September $110.00 PUT

Entry on July 27, 2010
Earnings: N/A (unconfirmed)
Average Daily Volume: 236 million
Listed on July 26, 2010


Costco Wholesale - COST - close 57.21 change +1.50 stop 57.25

Target(s): 55.40, 54.80, 54.30
Key Support/Resistance Areas: 56.80, 55.60, 54.25, 53.40, 51.50
Current Gain/Loss: -3.15%
Time Frame: 1 week
New Positions: No

7/27: In the pre-market Stifel raised COST to a buy from a hold which started the buying and short covering and determined our fate in this trade. COST gapped +1.4% higher at the open and our stop was hit this afternoon. The stock rallied right through its 50-day SMA with little resistance. The stop was placed at $57.25 because it was above the 50-day SMA and the most recent lower high. In hindsight it probably should have been a little higher. For readers who may still have positions I would place a stop above today's highs and the primary downtrend line. COST should retrace some of today's gains especially if the broader market is weak. I do not know how much further COST can go but it has entered a congestion area dating back to September of 2009 which should keep things in check. At a minimum the stock should close the gap higher today before moving much higher.

7/26: My comments from 7/24 have not changed. COST drifted lower the entire day and traded to within 5 cents of our first target above before bouncing. We are looking for a pullback in the broader market and COST should easily trade towards our revised targets giving us the chance to exit a winning position.

7/24: COST traded to $55.50 which triggered our entry for short positions. There is intraday resistance right at this level plus a downtrend line from 6/15 so this is a logical spot for COST to retrace some of the gains from the past two days. COST has now had two powerful rallies since 7/7 off of the $53.50 support level (i.e. double bottom). There is obviously a lot of support at this level and I just don't see it revisiting those lows for awhile. As such, we need to adjust so I suggest we stay nimble on this trade and begin looking for an exit. I have adjusted our targets above to use as a guide to tighten stops or simply take profits. I am looking for a small gain on this trade, nothing more. At a minimum COST should turn back to test its 20-day SMA near $55.40. Our next targets are $54.80 and $54.30. I expect the broader market to be weak early this week which should get COST moving towards these targets.

Closed Position: Short COST stock at $57.25, entry was at $55.50

Annotated chart:

Entry on July 23, 2010
Earnings 10/7/10 (unconfirmed)
Average Daily Volume: 3.76 million
Listed on July 20, 2010