Editor's Note:
Good evening. This week has been painfully slow with the indexes trading in a fairly tight sideways channel. Tomorrow's Jobless Claims report and Producer Price Index released in the pre-market will likely set the tone for the remainder of the week. After the pre-market reports we have the Philly Fed Survey and on Friday the CPI Index and Consumer Sentiment report. If these reports are bullish stocks are likely to break out higher so readers should use caution on short positions. On the contrary, if these reports are bearish we will likely experience a sharp sell-off. Throw in OPEX week and it becomes difficult to determine which way the broader market heads from here. There is one thing I do know for sure and that is the market can not continually gap higher and go up in a straight line. So I also caution readers of a breakout higher only to see it fail.

If we do head lower I suspect pullbacks will most likely be bought unless the data is extremely bad or more unfavorable news surfaces, which must be considered. In any event, we have long and short positions with a bias to the long side and any moves tomorrow or Friday may present opportunities to open new positions at better prices than we currently have. Please feel free to email me with any questions.

Current Portfolio:

BULLISH Play Updates

The Andersons, Inc - ANDE - close 39.65 change +1.75 stop 38.90 *NEW*

Target(s): 38.40 (hit), 38.95 (hit), 39.90, 41.50
Key Support/Resistance Areas: 41.50, 40.50, 39.20, 37.50 to 38.00, 35.50
Current Gain/Loss: +6.32%
Time Frame: 1 to 3 weeks
New Positions: No

9/15: ANDE has surged nearly +10% in about a week and the market is overbought so I suggest we close this position tomorrow and book a nice gain. The stock has rallied into a prior support area that lasted about 6 months from the fall of 2007 into the spring of 2008. It could be tough to break through this level without a pullback and I would rather protect profits here. Let's tighten the stop to $38.90 and if it is not hit exit the position at the close tomorrow if our targets are not reached. For readers who want to give this more time to work, additional intraday support begins at $38.40 and $37.25. These would be logical areas to consider looser stops.

9/14: We got the breakout today but it was short lived as ANDE closed only slightly positive after gaining nearly +3% in morning trading and almost hit our first target. The stock sold off the remainder of the day and printed an ugly topping tail candlestick. The good news is that today's closing price was a new 52-week high close. ANDE has solid support at current levels and below but the broader market looks ready to pullback. Readers may want to consider a tighter stop in $36.45 to $36.90 area.

9/13: ANDE closed right at $37.50 which is where the stock has struggled recently. If price keeps knocking at this level the door should open. Now we need a breakout.

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

Brocade Communications - BRCD - close 5.67 change -0.23 stop 5.34 *NEW*

Target(s): 6.00, 6.20, 6.50
Key Support/Resistance Areas: 6.60, 6.20, 6.00, 5.75, 5.40, 5.00
Current Gain/Loss: -1.39%
Time Frame: 1 to 3 weeks
New Positions: Only with tight stops

9/15: Oh what a day makes. At an analyst day this afternoon BRCD said they were expecting gross margins to be at the low end of their estimated range in 2011. This news sent the stock tumbling. As such, I want to tighten the stop $5.34 and suggest we step aside if it is hit. I've lowered the first target to $5.95 which is just below today's high.

9/14: BRCD pulled a repeat of yesterday and printed its third consecutive bottoming tail candlestick. The stock remains in a bull flag but could pullback with the broader market. I think pullbacks can be bought and will be short lived.

9/13: BRCD was under a little pressure early but the stock recovered nicely and closed near its highs of the day. The stock is just below the 200-day SMA and our first target is approaching.

9/11: BRCD traded down to $5.72 and bounced nicely on Friday. We are long the stock at $5.75. It's too bad we missed our initial trigger by 4 cents at $5.46 but I still like the set-up. I've increased the first target to $6.00.

Current Position: Long BRCD stock, entry was at $5.75

Options Traders: Long October $6 CALL

Entry on September 10, 2010
Earnings 11/23/10 (unconfirmed)
Average Daily Volume: 12.7 million
Listed on September 4, 2010

Noble Corp - NE - close 35.06 change -0.29 stop 32.25

Target(s): 36.85, 38.30
Key Support/Resistance Areas: 36.95, 38.50, 33.50
Current Gain/Loss: +1.33%
Time Frame: 1 to 3 weeks
New Positions: Yes

9/15: NE traded down to $34.36 and bounced hard into the close. Our first target is just under the 200-day SMA and near the 8/4 highs. Our stop is below the converging 20, 50, and 100 day moving averages. My comments from the play release remain the same.

9/13 & 9/14: We are waiting to be triggered at $34.60, which is about -2% lower from current levels. My comments from the play release below have not changed.

9/11: Fundamentally NE is a cheap stock that trades at a PE under 7. Technically, the stock broke out of a downtrend line that began on 4/27. Volume has been picking up as the stock is moving higher and it is also consolidating near its highs on lighter volume, which is a bullish sign. I suggest we use a trigger of $34.60 to open long positions. Our two targets are +6.5% and +10.5% higher. Our initial stop will be $32.25 which is below the rising 20-day and 50-day SMA's.

Current Position: Long NE stock, entry was at $34.60

Options Traders: Long October $36.00 CALL

Entry on September 15, 2010
Earnings 10/20/10 (unconfirmed)
Average Daily Volume: 3.7 million
Listed on September 11, 2010

Northern Oil & Gas - NOG - close 14.96 change -0.04 stop 14.25

Target(s): 15.95, 16.50
Key Support/Resistance Areas: 17.25, 16.20, 15.75, 15.00, 14.60
Current Gain/Loss: -0.60%
Time Frame: 1 to 3 weeks
New Positions: Yes

9/15: NOG traded in a fairly tight range and remains above support. My comments from below have not changed.

9/14: We are long NOG at $15.05. There is solid support all the way down to $14.60 including an upward trend line, the 20 and 50-day moving averages and prior support/resistance levels. Pullbacks should get bought and I like new positions on any further dips. Our first target has been lowered 5 cents to $15.95 which is +6% higher than our entry. I've left the play release below.

9/8: Oil and oil stocks should do well on the slightest prospects of an economic recovery. NOG is a land based driller with major assets in the Bakken region in North Dakota, which is one of the largest discoveries of proven oil reserves ever found in the United States. NOG is forming a bull flag on its daily chart and looks poised to breakout. The stock is consolidating above all of its major moving averages which should also help to provide support on any pullbacks. I suggest readers use a trigger $15.05 to initiate long positions. Our two targets are +6% and +9% higher. Our stop is below all of the moving averages and the recent upward trend line.

Current Position: Long NOG stock, entry was at $15.05

Options Traders: Long October $15.00 CALL

Entry on September 14, 2010
Earnings 10/25/10 (unconfirmed)
Average Daily Volume: 506,000
Listed on September 8, 2010

iPath S&P 500 VIX ST Futures - VXX - close 17.31 change -0.26 stop 16.60

Target(s): 19.60, 20.40
Key Support/Resistance Areas: 17.50, 19.75, 20.60
Current Gain/Loss: -2.20%
Time Frame: 1 week
New Positions: Yes

NOTE: I view this as an aggressive trade so small position size is recommended. Long VXX is a bearish play on equities, however, it is listed as long play because we are long the underlying instrument.

9/15: VXX opened higher today but struggled to hold on to its gains as the market recovered from early losses. Tomorrow's jobless claims is likely to set the tone for the broader market for the remainder of the week. If there is a sell-off I can easily see VXX surging 5% to 10% higher. Otherwise, it will inch closer to our stop and we may need to exhibit some patience.

9/14: We are long VXX as of today's open which is a bearish play on equities. I'm looking for a quick spike in volatility with a pullback in the broader market. There is resistance at $18.50 which could easily get hit with one big down day in the market. My comments from the play release remain valid.

9/13: The market is overbought and needs a healthy pullback to regain its energy. Traders are getting complacent and I believe there will be a spike in volatility in the coming days. VXX printed a new 52-week low today which barely undercut its 4/21 low which was just before the S&P 500 began to sell-off in earnest. This creates a potential double bottom set-up and I suggest readers initiate long positions at current levels. I also view this as a good hedge against our open long positions in the model portfolio. Our profit targets are +11% and +16% from current levels.

Suggested Position: Long VXX stock at current levels

Options Traders: Buy October $19.00 CALL, current ask $1.00

Entry on September 14, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 21 million
Listed on September 13, 2010

BEARISH Play Updates

Freeport-McMoRan - FCX - close 81.40 change -0.04 stop 84.55

Target(s): 78.00, 76.80, 75.75
Key Support/Resistance Areas: 84.25, 76.50, 75.00
Current Gain/Loss: -0.56%
Time Frame: 1 week
New Positions: Yes

9/15: FCX looked vulnerable this morning but recovered with the remainder of the market. We are short the stock at $80.95 and are looking for a move down towards the August highs. My comments from the play release below have not changed.

9/14: FCX has gained nearly +20% since its low on 8/25 less than 3 weeks ago. The stock has surged higher, virtually in a straight line with little to no pause. FCX has rallied right into its primary downtrend line from its January highs and also closed at a prior resistance level from mid-March. This type of move is not sustainable and I suggest readers open short positions at current levels and play for a retracement of the stock's recent gains. Our primary target is $76.80 which is about -5.5% lower than current levels, and also just above a 38.2% retracement from the 8/25 lows to today's highs. For options traders, if this target is reached it should produce a gain of approximately +60% to +65%. This could be a quick trade and a good strategy would be to immediately place a "good til cancelled" or "one cancels the other" order immediately after the position is entered and be ready to take profits or get out should our stop get hit.

Current Position: Short FCX stock, entry was at $80.95

Options Traders: Long October $75.00 PUT

Entry on September 15, 2008
Earnings: 10/20/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on September 14, 2010

Intuit, Inc. - INTU - close 44.10 change +0.20 stop 45.32

Target(s): 42.00, 41.40, 40.50
Key Support/Resistance Areas: 45.00, 43.25, 42.00, 41.35, 50-day SMA
Current Gain/Loss: -1.78%
Time Frame: 1 to 2 weeks
New Positions: Yes

9/15: My comments from below have not changed.

9/14: INTU is maintaining an intraday downtrend line and I'm expecting the stock to turn lower with the broader market. $43.25 is a key level for the stock break and head lower.

9/11: We got a little unlucky with the gap lower in INTU on Friday but it was expected on the heels of a downgrade. Nonetheless, I'm looking for the stock to continue lower. The broader market will most likely determine how far this goes. Our first two targets are -3% and -4.5% lower from here. The play write-up is below.

9/9: UBS cut its rating on INTU from neutral to buy this afternoon, which is when the selling in the stock began in earnest. In addition, price targets from other analysts are in the $45 range which INTU printed on Tuesday. The stock also printed all-time highs on Tuesday but is showing signs of an imminent decline, especially if the broader market pulls back. Tuesday's candlestick is a reversal pattern and it was confirmed today with a bearish engulfing candlestick. I suggest readers initiate short positions at current levels and play for a pullback to our targets which are near three support/resistance levels. Our stop will be just over Tuesday's high. Our targets are -4.5% to -8% below current levels. I also think this is a good play to consider options which creates defined risk. For example, buying 4 contracts of the October $42.50 strike for 90 cents (mid point of the current bid/ask spread) will cost you $360.00. Should INTU stock move -$1.50 lower over the next 1 to 2 weeks those options should be worth about $1.40. This would represent a +55% gain (or a $200 return on your $360 at risk). I bring this up due to all of the M&A activity and I would rather see readers protect against a large gap if INTU happens to be a takeover target, although I haven't heard anything to substantiate this. Simply put, the stock looks ready for a pullback. Please email me with any questions.

Current Position: Short INTU stock, entry was at $43.33

Option Traders: Long October $42.50 PUTS

Entry on September, 10, 2010
Earnings: 11/18/2010 (unconfirmed)
Average Daily Volume: 4 million
Listed on September 9, 2010


Power-One, Inc - PWER - close 9.67 change -1.49 stop 9.68

Target(s): 11.60, 12.00, 12.50
Key Support/Resistance Areas: 13.00, 11.75, 50-day, 9.50
Final Gain/Loss: -10.37%
Time Frame: 1 to 3 weeks

9/15: Ouch! Cautious comments from an analyst at The Street apparently triggered a chain reaction of selling in PWER today. Volume surged to 17 million shares compared to the daily average of around 5 million and broke through multiple levels of support, an upward trend line, and its 20 and 50-day moving averages like they weren't even there. A couple of hours later Think Equity defended the company but the damage was already done. Our position was opened and closed within a matter of hours. Regardless of the reasons this one hurts and it is one of the reasons we use stops. And with a possible pullback in the market looming PWER could go lower. I like the company but the stock looks in trouble so we must move onward.

9/13 & 9/14: I suggest we remain patient and wait for our trigger at $10.80 which is just above the rising 20 and 50-day SMA's and an upward trend line. A pullback in the broader market should get us there.

9/11: Well, PWER came within 1 penny of triggering our long entry so I'm going to raise the trigger to $10.80. Either someone doesn't want to let us in long positions or I am good at picking intraday support levels. Maybe both but we should get filled in the next day or two. There is lots of support below that I think will hold (see below comments).

Closed Position: Long PWER stock at $9.68, entry was at $10.

Annotated chart:

Entry on September 15
Earnings 10/21/10 (unconfirmed)
Average Daily Volume: 5.3 million
Listed on September 7, 2010