Current Portfolio:

BULLISH Play Updates

Bally Technologies - BYI - close 33.37 change +1.07 stop 32.70 *NEW*

Target(s): 32.95 (hit), 33.95, 34.95, 35.70
Key Support/Resistance Areas: 37.50, 36.75, 35.75, 34.00, 32.50
Current Gain/Loss: -2.71%
Time Frame: Several Weeks
New Positions: No

8/2: BYI rebounded today and closed +3.31% higher. Let's tighten the stop to $32.70 and see how much more we can get out of this position. I suggest readers consider closing positions if our target of $33.95 is hit. This level is just below a key resistance area from the past month and at a minimum stops should be tightened.

7/31: BYI opened at our stop of $31.84 so we must let the opening range resolve itself prior to executing the stop. This is a stop rule we have utilized in the past and I suggest all readers use. Essentially, when a stock gaps open near or below a predetermined stop let the first 15 or 30 minute opening range close. Then place the protective stop below the range for long positions. For short positions place the stop above the range. This provides a better measure of the true strength or weakness in the stock and often times will keep you in the position looking for a better exit. Considering the current volatile conditions this rule is a must have. It worked perfectly in BYI today and keeps us fighting another day. BYI recovered nicely and our targets should come into play prior to our new stop of $31.72 getting hit, which is below today's low. I've also adjusted the targets slightly. If BYI can find its footing here and equities are strong next week the stock should find its way up to the $34.00 level.

Current Position: Long BYI stock, entry was at $34.30

Options Traders: Long September $35.00 CALL

Entry on July 28, 2010
Earnings 8/12/10 (unconfirmed)
Average Daily Volume: 1.38 million
Listed on July 26, 2010

Teck Resources Ltd - TCK - close 36.92 change +1.67 stop 32.65

Target(s): 36.00, 36.90, 37.70
Key Support/Resistance Areas: 37.00, 36.00, 34.75, 34.00, 33.00, 32.25
Current Gain/Loss: N/A
Time Frame: 1 to 2 weeks
New Positions: Yes

8/2: TCK gapped higher at the open and ran away from us. The stock closed +4.74% on the day and has already hit our first two targets. TCK has resistance at current levels and should retrace some of today's gains. I suggest we be patient and see if TCK heads toward closing today's gap higher before initiating long positions. Let's adjust our trigger up to $35.55 which is just below today's low and 30 cents above the gap. The 20-day and 50-day SMA's are now rising and should provide support if TCK goes any lower that this. TCK is also trading in an upward channel and if the broader market remains strong the stock should trade to new highs. Let's take advantage of any weakness.

7/31: TCK has broken out of its primary downtrend that began on 4/7 and surged higher this past week up to its 200-day SMA before turning down. Material stocks are gaining momentum and I think the recent pullback has allowed them to regain energy for a continued move higher. The stock is maintaining an upward trend line that began on 7/1 and is also above its 20-day and 50-day SMA's. I suggest we us a trigger $34.85 to initiate long positions. Our stop will be $31.80 which is below the 20-day and 50-day SMA's and the recent upward trend line. The stop will be adjusted once we are in the position.

Suggested Position: Long TCK stock if it trades down to $35.55

Options Traders: September $36.00 CALL, current ask $2.89, estimated ask at entry $2.15

Entry on August xx
Earnings More than 2 months (unconfirmed)
Average Daily Volume: 6.4 million
Listed on July 31, 2010

Oil Service HOLDRS - OIH - close 109.53 change +4.39 stop 107.90 *NEW*

Target(s): 108.50 (hit), 110.25, 111.20
Key Support/Resistance Areas: 110.50, 108.60, 107.00, 104.75, 102.80
Current Gain/Loss: +1.89%
Time Frame: 1 to 2 weeks
New Positions: No

8/2: OIH gapped higher this morning and broke through the $107.00 resistance level of the ascending triangle mentioned in the play release. The sector never looked back and OIH posted +4.18% gains on the day. Call positions were initiated at the open and have already gained +27%. Our target of $108.50 was hit and OIH came within 2 cents of our reaching our $110.30 target before closing about 80 cents below its high of the day. I've adjusted the $110.30 target down 5 cents and have also added $111.20 which is below the 100-day SMA. If OIH breaks over today's high of $110.28 I recommend readers tighten stops to protect against a reversal. There is nothing wrong with booking gains at current levels as well. I've adjusted the stop up to $107.90 to protect capital but a tighter stop could be placed at $108.45.

7/31: I'm sticking with an ETF here to eliminate some of the earnings noise and mitigate risk in individual names. Oil service stocks have been beaten down and are now showing signs of life. OIH is forming an ascending triangle on its daily chart and has made a series of higher lows since it bottomed on 6/1. The ETF is above its 20-day and 50-day SMA's which is providing further support. I'm comfortable with positions at current levels with tight a stop of $102.30 which is below the low from 7/23. We will either be right or right out of this trade. We are playing for a breakout above $107.00 into the $108.50 to $110.00 area which is near our two targets. $108.50 was a prior support level in the fall of 2009 so OIH could see some resistance there. As OIH approaches our targets I suggest readers be quick to take profits or tighten stops.

Current Position: Long OIH stock, entry was at $107.50

Options Traders: Long September $110.00 CALL

Entry on August 2, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 8 million
Listed on July 31, 2010

ProShares UltraShort 20 YR Treasury - TBT - close 36.74 change +0.89 stop 35.55 *NEW*

Target(s): 36.90, 37.50 (hit), 38.00, 39.25, 40.50
Key Support/Resistance Areas: 42.00, 41,00, 39.70, 38.25, 37.55, 34.65
Current Gain/Loss: +0.63%
Time Frame: Several Weeks
New Positions: Yes

8/2: It appears Friday's sell-off in TBT was short lived as I suspected. However, the price action in bonds and equities still seems somewhat disconnected. TBT looks like it is forming a higher low and has 20 more cents to go before closing the gap down on Friday. This will likely act as intraday resistance but I expect TBT to eventually break it and trade back up to our $37.50 target and possibly our more aggressive targets. I suggest readers begin to trail stops higher to see if we can catch a larger move. For now, I've moved the stop up to $35.55 which is below Friday's lows and the upward trend line on the daily chart.

7/31: The price action in bonds on Friday has me scratching my head in amazement. Bond yields tanked and bond prices surged (i.e. money was flowing into the bond market as traders were snatching up bonds at ridiculously low yields) which caused TBT to gap lower and close -2.98% on the day. This was an uncharacteristic huge move and is not normal. What's more interesting is that bonds never gave anything back throughout the day as equities surged higher on Friday morning after their gap lower. One of the two following scenarios has got to give here and the tone should be set in trading on Monday. Either money will flow out of stocks and into bonds creating a big sell off in equities (bad for TBT) or money will flow out of bonds and into equities creating a rally in equities (good for TBT). Medium to longer term I am bearish on equities but in the short term I think the latter is going to happen and we will see stocks rally, or at least hold up, with money flowing out of bonds. This will get our position in TBT moving back in the right direction. I really like new positions in TBT at these levels as well. Looking at a longer term weekly chart of bond prices (i.e. /ZN or TLT) one might think bonds have room to run to their fall 2008/spring 2009 highs. But this was the financial crises and money markets were failing and there is simply no crises like that right now. The other side of that argument is that maybe we are on the verge of a crises and we should listen to what the bond market is telling us. While I believe another crises is bound to happen I'm just not buying that argument quite yet. I believe there can be a sell-off in equities without a surge higher in bond prices or drop in yields. Nonetheless, we have to manage the trade and $36.90 is a level readers may want to consider exiting TBT. This would close the gap lower from today while also booking a winning trade. In the end, I think today's sell-off in TBT was an anomaly that will either be corrected early next week or we are on the verge of a bigger sell-off in equities. Unfortunately, today provided us very few clues as to what will happen. The above targets can be used as guide to tighten stops or simply take profits.

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

Options Traders: Long September $37.00 CALL

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