Editor's Note: Good Evening. We are still getting whipped around and managing swing trades remains difficult without being able to trade intraday. As instructed in yesterday's updates we closed ARO, ACI, and AAPL early due to the market strength. I've explained in the updates how we managed the stops. We have a nice gain in PBR so please protect profits. I would not hesitate to close longs or shorts tomorrow if the market makes any big moves. We remain short in TD and FCX is still a new short play, along with SPY and ALTR as new entries to the portfolio. I like most of indexes short at these levels as they are coming into resistance and SMA's from below. The risk/reward is also attractive as you can place tighter stops and be right out if you are wrong. Keep staying nimble and email me with any questions.

Current Portfolio:

CALL Play Updates

Direct TV - DTV - close 38.55 change +0.85 stop 35.70

Target(s): 38.20, 38.50, 39.50, 41.50
Key Support/Resistance Areas: 38.60, 37.00, 36.30
Current Gain/Loss: N/A
Time Frame: Several weeks
New Positions: Waiting to be triggered

I am keeping the set-up on this trade the same and waiting for the stock to reach its 50-day SMA prior to entering. It has to trade down there and we will be ready to pounce on the stock when it does. The 50-day SMA is currently $36.60 but is rising.

Suggested Position: Buy July $37.00 CALL if DTV trades down to its 50-day SMA currently near $36.50, current ask $1.91, estimated ask at entry $1.40

Entry on June xx
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 12.3 million
Listed on 6/5/10

Petroleo Brasileiro SA - PBR - close 38.57 change +1.01 stop 37.65 *NEW*

Target(s): 38.50 (HIT), 39.25, 39.95
Key Support/Resistance Areas: 37.45, 36.25
Current Gain/Loss: +42%
Time Frame: 1 week
New Positions:

PBR had a nice day and hit our first target of $38.50. If readers still have positions I suggest tightening stops to protect profits. The market was strong today but I would not hesitate to sell the position and book a profit if things start to rollover tomorrow. I would also suggest selling into any further strength tomorrow. We are also moving our stop to breakeven at $37.65.

Current Position: July $37.00 CALL, entry at $2.39

Entry on June xx
Earnings Date 8/13/10 (unconfirmed)
Average Daily Volume: 19.6 million
Listed on 6/8/10

Qualcomm Inc - QCOM - close 34.72 change -0.55 stop 34.20

Target(s): 20-day SMA, 36.45 (hit), $36.75, 38.00, 38.95
Key Support/Resistance Areas: 37.50, 37.00, 36.25, 35.25, 34.50
Current Gain/Loss: -18%
Time Frame: 1 to 2 weeks
New Positions: No

It took a while for QCOM to get going but it finally did at the end of the session, keeping us alive for another day. I've been disappointed with the performance of the stock the last couple of days but things seem to be picking up. The stock closed above a 5 day intraday downtrend line so this is positive for a move higher from here. I expect QCOM to at least trade up to its 20-day SMA which is just below $36.00. This should create a small winner and is good place to tighten stops to see if we can get more out the stock.

Current Position: July $36.00 CALL, entry at $1.30

Entry on 6/1/2010
Earnings Date 7/21/2010 (unconfirmed)
Average Daily Volume: 26 million
Listed on 5/29/10

Quest Software - QSFT - close 19.07 change +0.59 stop 18.58 *NEW*

Target(s): 19.60, 20.00, 20.50, 21.00
Key Support/Resistance Areas: 18.40, 18.70, 19.36, 20-day SMA, 50-day SMA
Current Gain/Loss: -29%
Time Frame: Several weeks
New Positions: Yes

After underperforming yesterday technology stocks shifted gears again. QSFT gapped up higher and pierced the entire wick of yesterday's candlestick. This is a bullish signal so I am hoping for follow through tomorrow. The stock is now back above the recent breakout of resistance at $18.70 that it pierced through yesterday. And it has also made a series of higher lows on the intraday charts. We are going to tighten the stop to $18.58 which is below today's opening low and below the 20-day SMA and aforementioned support/resistance level. I would also urge readers to consider selling into strength as the week comes to an end by trailing stops or closing positions.

Current Position: July $20.00 CALL, entry at $0.85

Entry on June 7, 2010
Earnings Date 8/10/10 (unconfirmed)
Average Daily Volume: 1.9 million
Listed on 6/2/10

PUT Play Updates

Toronto Dominion Bank - TD - close 68.02 change +1.93 stop 69.90

Target(s): 64.50, 62.20, 60.50
Key Support/Resistance Areas: 69.15, 68.00, 66.50, 65.60, 64.50, 63.00
Current Gain/Loss: -13%%
Time Frame: 1 to 2 weeks
New Positions: Yes, but preferably on bounces

We got a good entry on this position on Wednesday and I was comfortable letting this close without adjusting the stop. But if we surge higher from here I suggest readers cut there losses and get out of the way. The opening range is important and typically shows the overall relative strength or weakness in a stock. This is what I will be looking for tomorrow and deciding whether or not to adjust the stop. If we happen to gap higher again I will most likely use this strategy.

Current Position: July $65.00 PUT, entry was at $1.90

Entry on June 9, 2010
Earnings 9/2/2010 (unconfirmed)
Average Daily Volume: 1.4 million
Listed on June 8, 2010


Apple Inc - AAPL - close 250.51 change +7.31 stop 255.00

Target(s): 246.00 (hit), 239.00, 234.00
Key Support/Resistance Areas: 265, 260, 258, 254, 250, 243, 237, 232
Current Gain/Loss: +40.19%
Time Frame: 1 to 2 weeks
New Positions: Closed

Yesterday I urged readers to protect profits against a hard reversal and that we would be quick to close this position if the market reverses. This is what we did when the market gapped higher and opened strong. AAPL was initially weak but the market was going higher. As such, we let the initial trading settle in and placed as stop just above the first 30 minute bar at $246.25 which is where we were taken out. You can also use 15 minute bars for this strategy depending on what your comfortable with. This strategy protected our profits for a +40% gain. Shortly thereafter AAPL retreated to retest the area giving readers a second chance to cover short positions. The market was strong and closing the position was the right thing to do. We essentially closed the position at our $246 target that was hit yesterday. AAPL also broke out of its downward channel that started last Friday. For readers who still have positions I would place a stop just above the converging 20-day and 50-day SMA which are at about $251.60. A stop at $252 will give you some wiggle room for a spike higher. I still think there may have more downside to come for AAPL but protecting profits is the name of the game in this market. I could easily see AAPL trading down to its 20-week SMA which is near a long term upward trend line and just below our final target of $234 (raised $1 from $233). We may be looking for another short entry in AAPL soon, but for now we'll gladly take the profit. I've provided a 30 minute chart highlighting the exit strategy.

Closed Position: July $250.00 PUT @ $15.00, entry was at $10.70.

Annotated chart:

Entry on June 7, 2010
Earnings 7/20/2010 (unconfirmed)
Average Daily Volume: 29 million
Listed on June 5, 2010

Aeropostale, Inc. - ARO - close 28.92 change +1.17 stop 29.55

Target(s): 27.30, 27.00, 26.35, 25.25
Key Support/Resistance Areas: 29.35, 28.50, 27.50, 27.00, 26.30, 25,00
Current Gain/Loss: -25.92%
Time Frame: 1 to 2 weeks
New Positions: Closed

It wasn't meant to be with ARO. Retailers have had my number lately so I don't anticipate trading them anytime soon. In any event, per yesterday's updates we were quick to close this position today and get out of the way of the market strength. We trailed our stop as illustrated in the intraday chart below and are out of the position for -25% loss.

Closed Position: July $27.00 PUT @ $1.00, entry was at $1.35

Annotated chart:

Entry on June 8, 2010
Earnings 8/19/2010 (unconfirmed)
Average Daily Volume: 3.3 million
Listed on June 7, 2010

Arch Coal - ACI - close 22.02 change +1.51 stop 22.05

Target(s): 19.50, 18.80, 18.00
Key Support/Resistance Areas: 22.00, 21.75, 21.40, 21.00, 20.40, 19.25
Current Gain/Loss: -22.72%
Time Frame: 1 to 2 weeks
New Positions:

Coal stocks were moving so fast and surging higher this morning that we placed the stop above the high of the first 15 minute bar $21.55. The stock came back to retest this area a couple of times and it acted as support which catapulted ACI higher in the afternoon.

Closed Position: July $20.00 PUT at $0.85, entry was at $1.10

Annotated chart:

Entry on June 8, 2010
Earnings 7/22/2010 (unconfirmed)
Average Daily Volume: 6.4 million
Listed on June 7, 2010