Editor's Note:
Good evening. Our short positions took a beating today. I have narrowed targets on shorts and suggest readers begin to look for exits on weakness or tighten stops to protect capital. Please email me with any questions.

Current Portfolio:

BULLISH Play Updates

The Andersons, Inc - ANDE - close 36.56 change +0.68 stop 34.45

Target(s): 38.90, 40.50, 41.50
Key Support/Resistance Areas: 41.50, 40.50, 39.20, 38.00, 35.50
Current Gain/Loss: -1.24%
Time Frame: 1 to 3 weeks
New Positions: Yes

9/1: ANDE remains in a high tight bull flag. If the broader market strength continues the stock should break higher and head towards our targets. All of my comments below remain the same.

8/31: ANDE closed relatively flat on the day. The stock remains above the key support level in the $35.00 to $35.50 area which is the logical area for a bounce back higher. This area is not a bad place to consider new bullish positions.

8/28: ANDE is hanging tough and maintaining its upward trend line with the 20-day SMA acting as support. I'm looking for the stock to break out higher and move up towards our targets.

Current Position: Long ANDE stock, entry was at $37.02

Options Traders: Buy December $40.00 Calls, current ask $2.10

Entry on August 19, 2010
Earnings 10/28/2010 (unconfirmed)
Average Daily Volume: 180,000
Listed on August 18, 2010

Ultrashort MSCI Europe - EPV - close 19.54 change -1.78 stop 17.78

Target(s): 20.00, 20.50, 21.00, 22.00
Key Support/Resistance Areas: To Follow
Time Frame: 1 to 2 weeks

NOTE: This is an double inverse ETF and a bearish play on European equities. Expect volatility and use small position size to manage risk.

9/1: Wow, EPV gapped nearly -6% lower at the open which was below our stop so this position was not opened, i.e. we would have been simultaneously stopped out. European equities rallied on the heels of economic data just like here in the US. The question remains whether this is a one day event or the start of something bigger. We probably won't know that until Friday's employment numbers but I suspect we may get some follow through to today's rally. EPV looks like it wants to fill the gap higher on 8/11 which would be a pullback to the $18.90 area. If we can get filled at this price I suggest initiating a small long position in EPV (bearish position in European equities) and play for a bounce in the ETF. I've adjusted our targets and stops.

8/31: EPV has broken out of its long term downward trend line and has made a series of higher highs and higher lows throughout the month of August. I believe there will be a correction in European stocks and this one way to play it. I suggest we initiate positions if EPV trades to down to $21.10 and we'll use a tight stop of $20.21 to keep losses small if we are wrong. Our first two targets are +6% and +10% higher respectively.

Suggested Position: Long EPV stock if it trades to $21.10

Entry on August xx
Earnings N/A
Average Daily Volume: 259,000
Listed on August 31, 2010

Rackspace Hosting, Inc - RAX - close 20.12 change +0.43 stop 17.95

Target(s): 20.75(hit), 21.30, 23.00
Key Support/Resistance Areas: 23.50, 21.40, 20.00, 19.00, 18.00
Current Gain/Loss: +2.39%
Time Frame: 3 to 5 weeks
New Positions: Yes, preferably on a pullback

9/1: We are looking good here as RAX is above the key $20.00 support level and the ascending triangle that has been forming since June. Now we need follow through. If RAX spikes back up to our first target protect profits or consider taking a portion of your position off of the table.

8/31: RAX experienced a set-back today when Benchmark Co. cut its rating to hold from buy. The firm reiterated their price target of $22. RAX closed at $19.69 and if it goes to $22.00 we will be happy campers. Once this selling subsides RAX should turn back up. The stock is maintaining its primary upward trend line and is still above all of its major moving averages. For options traders we have December strikes so time is on our side for now. Readers may want to consider this pullback as an entry point.

8/28: Wow! RAX surged nearly +8% higher on Friday and is approaching our 2nd target. I think this stock has the potential of reaching its 52-week highs near our final target of $23.00. RAX is also being talked about as a potential takeover target in the cloud computing space which is why I have suggested the December options, i.e. to give this time to work. Readers may want to consider taking some profits off of the table and keeping the remainder of your position open to see if RAX rewards us.

Current Position: Long RAX stock, entry was at $19.65

Options Traders: Long December $21.00 CALL

Entry on August 25, 2010
Earnings 11/9/2010 (unconfirmed)
Average Daily Volume: 1.75 million
Listed on August 25, 2010

BEARISH Play Updates

Automatic Data Processing - ADP - close: 39.37 change: +0.76 stop: 40.75 *NEW*

Target(s): 38.85 (hit), 38.05, 37.25, 36.50
Key Support/Resistance Areas: 41.00, 39.00, 37.30
Current Gain/Loss: -1.60%
Time Frame: Several weeks
New Positions: Yes

9/1: ADP double topped with the high on 8/23 before pulling back. My comments from below remain valid in regard to exercising caution with this trade. Our stop is above the 30-day and 50-day SMA so we need this bounce to be short lived if our targets are going to be met.

8/31: ADP is moving slow and I am concerned of a broader market bounce in equities. We have a small gain in this trade and I suggest readers use caution. I've added a target of $38.05 and have lowered the stop to $40.75.

8/28: ADP looks ready to bounce along side the broader market. The stock closed right on a steep downtrend line but I think it's only a matter of time before it's broken. Readers may want to consider using a tighter stop or simply exiting positions. Our official stop is above the 20 and 50-day SMA's but a tighter stop of $40.10 could be used. I've also listed a target near breakeven ($38.85) on the trade. ADP could show some weakness early in the week and this could be used a logical exit point as it is an intraday support level.

Current Positions: Short ADP stock, entry was at $38.75

Option Traders: Long November $37.00 puts

Entry on August 24, 2010
Earnings Date 10/28/10 (unconfirmed)
Average Daily Volume: 3.2 million
Listed on August 19, 2010

Chesapeake Energy - CHK - close 21.24 change +0.56 stop 21.60

Target(s): 20.60, 20.20, 19.70 (hit), 19.10
Key Support/Resistance Areas: 22.50, 21.60, 20.30, 19.65, 18.75, 18.00
Current Gain/Loss: -2.07% Time Frame: 1 to 2 weeks
New Positions: Yes

9/1: After having a +5% gain during the breakdown on 8/25 we now have a -2% loss and are vicariously close to getting stopped out in CHK. The stock closed below the 50-day SMA and the backside of the its recent broken downtrend line. But any further broader market strength is probably going to stop us out. I believe the stop is in the right place and suggest readers step aside if it is hit. I've added two targets just below which are good places to consider closing positions or tightening stops to protect capital.

8/31: CHK has printed two topping tail candlesticks off of the 20-day SMA from below and a downward trend line. This is a bearish signal but we will most likely need more weakness in the market for CHK to move lower.

8/28: My comments from below about CHK violating the prior days candlesticks is not a good sign for this short position. Our stop is $21.60 so we won't get hurt too bad if we are taken out but readers should be aware that Friday's pattern can be considered a reversal pattern. In hindsight, we should have taken the +5% gain we had from the breakdown on 8/25. Nice job to readers that did.

Current Position: Short CHK stock, entry was at $20.81

Options Traders: Long October $20.00 PUTS

Entry on August 16, 2010
Earnings: 11/2/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on August 14, 2010

Starbucks Corp. - SBUX - close: 23.68 change: +0.70 stop: 25.05

Target(s): 22.70, 22.20, 21.30
Key Support/Resistance Areas: 25.00, 23.50, 22.00, 21.00, 20.00
Current Gain/Loss: -1.63%
Time Frame: Several weeks
New Positions: Yes

9/1: Readers may want to consider a tighter stop in the $25.50 area which is above the stock's primary downtrend line and the 200 & 20-day SMA's. However, this stop would be just below the 50-day SMA. The primary downtrend line and 20-day SMA are in the $24.00 area and SBUX has filled a gap down. All of these factors should keep bounces in check but broader market strength will most likely still lift the stock if it continues.

8/31: SBUX shed almost -2% today. Volume was much higher than in recent days when the stock was drifting higher. If there is broader market weakness in the coming days SBUX could quickly trade down to our targets. Otherwise, there is a bunch overhead congestion which should keep bounces in check.

8/28: My best guess is that SBUX has some unhappy shareholders at higher prices which should keep bounces in the stock in check. There is a lot of congestion overhead but we may need to exhibit some patience through a bounce.

Current Position: Short SBUX stock, entry was at $23.30

Options Traders: Long October $23.00 puts

Entry on August 24, 2010
Earnings Date 11/04/10 (unconfirmed)
Average Daily Volume: 8.0 million
Listed on August 19, 2010


HNSI, Inc - HNSI - close 26.29 change +.11 stop 28.11

Target(s): 25.80 (hit), 25.40, 25.05, 23.75
Key Support/Resistance Areas: 28.90, 27.25, 25.80, 200-SMA, 23.50, 22.00
Final Gain/Loss: -3.35%
Time Frame: 1 to 2 weeks
New Positions: Closed

9/1: HSNI hit our first target yesterday at $25.80 and has rallied +8% off of its lows. We had a +5% gain and were stopped out to the tick this afternoon for -3.35% loss. The lesson learned is that we have to protect profits or simply take them when given the chance. I tightened the stop to $28.11 yesterday because it was above all of its moving averages and recent swing highs. In hindsight, the stop may have been too tight but it may have also been the right call if HNSI continues higher. Time will only tell.

8/31: HSNI hit our $25.80 target this afternoon before bouncing and closing in positive territory. I want to tighten the stop to $28.11 to protect against a more meaningful bounce. I've added $25.40 as a target with $25.05 as the next target which is just above the stock's 200-day SMA. I would be taking profits or tightening stops to protect them as these levels approach. $25.80 is still a valid target and could be construed as a double bottom play by some traders so readers should still consider taking profits here as well.

8/28: HSNI may bounce with the broader market but I will be surprised if it takes out the downtrend line from its April highs. I have tightened the targets significantly and suggest readers take a small gain or tighten stops to protect the gains should HSNI reach them.

Closed Position: Short HSNI stock at $28.11, entry was at $27.20

Annotated chart:

Entry on August 25, 2010
Earnings: 11/11/2010 (unconfirmed)
Average Daily Volume: 495,000
Listed on August 24, 2010