Editor's Note: Good Evening. I am waiting to release new trades until we know whether or not this support holds on the S&P 500. It doesn't appear to me that it will but we may have to endure a bounce first. If that happens it will give us a better opportunity to initiate short positions at a better price. Tomorrow should be an interesting day. Any bounces could be violent but are also likely to be short lived. Our support on BAC was broken today and our stop was hit. However, our short position in WHR paid off and the those gains outweighed our losses on BAC. All three of our open positions currently have gains. I've adjusted some of the targets and stops to keep them from running away from us. Please email me with any questions.

Current Portfolio:

CALL Play Updates

Hanson Natural Corp - HANS - close 49.53 change -0.89 stop 38.65 *NEW*

Target(s): 39.95, 40.50 (hit), 41.25, 42.40, 43.25
Key Support/Resistance Areas: 42.50, 41.00, 40.25, 39.30, 38.50
Current Gain/Loss: +4.5%
Time Frame: 1 to 2 weeks
New Positions: Yes

6/29: HANS held up relatively well until the end of the day. The stock is maintaining its upward trend line from 5/6 and is still above its 20-day and 200-day SMA's. We still have a small gain on this position and if the market bounces HANS should do well. I am going to tighten the stop to just below the 200-day SMA at $38.65. Our first target was hit yesterday and considering today's events I suggest readers consider selling into strength, or at least protecting profits if HANS proceeds higher from here. I've listed a new target of $39.95 which is where HANS struggled to break through today. This is an area to tighten stops to see if we can get more our of the stock.

6/28: HANS closed above it 50-day SMA today and is maintaining the upward trend line that started on 5/7. The stock also traded to a new high that hasn't been since 5/18. Our first target of $40.50 was hit today but I think we have a good chance of hitting $41.25 so I am going to leave this open to see if we can get some follow through in the coming days.

6/26: HANS continues to make higher lows and if there is strength in the broader market early this week I believe our targets will be hit. On Friday the stock was increasing in the morning as the market was making now lows. The volume patterns are also bullish as the pullbacks tend to come on lighter volume. This shows me there may be institutions buying in this stock which bodes well for a bullish thesis. I've made some minor adjustments to the targets.

Current Position: August $40.00 CALLS, entry was at $2.20

Entry on June 23, 2010
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on 6/22/10

PUT Play Updates

Avon Products - AVP - close 27.07 change -0.71 stop 29.65

Target(s): 26.60, 25.80, 25.25, 24.25
Key Support/Resistance Areas: 29.50, 29.00, 28.00, 27.17, 25.75, 25.00
Current Gain/Loss: +25%
Time Frame: Several weeks
New Positions: Yes, but only on bounces

6/29: AVP is back below its 20-day SMA and I think the stock ultimately moves lower, but there could be bounce first. If the decline continues I don't anticipate it lasting too long considering the oversold conditions. As such, I have listed $26.60 as a new target which could be a logical bounce point for the stock. This is near the highs from 5/26 and 6/3. I would be quick to tighten stops or simply take profits at this level if it is hit tomorrow. However, if we bounce higher from here first I think that level becomes less important and we may see more downside.

6/28: AVP found some support at its 20-day SMA which also corresponds to its late May highs. AVP could bounce from here if the market does but I believe it will be short lived. Our stop is high enough to account for volatility and I expect the stock to trade down to $25.80 within the next week or so.

6/26: AVP ran into prior support and its 50-day SMA this past week and is now turning lower. The stock made a lower high and I believe it is due to make a lower low, or at least retest its recent lows near $25.00. If we simply catch a portion of this move we will have a nice profitable trade. Our primary target is $25.25 but I have also listed $25.80 as a target which is an area to consider tightening stops or taking profits. If the selling picks up AVP could go all the way down to the $24.00 area which was a prior support/resistance level from 10/08 and 5/09. Our stop is $29.65 and our time frame is several weeks.

Current Position: August $27.00 PUTS, entry was at $1.45

Entry on June 28, 2010
Earnings 7/29/2010 (unconfirmed)
Average Daily Volume: 4.2 million
Listed on June 26, 2010

Owens Corning - OC - close 31.42 change -0.83 stop 34.72

Target(s): 29.75, 28.80, 27.60
Key Support/Resistance Areas: 34.55, 32.90, 32.60, 31.00, 29.50, 28.50, 27.00
Current Gain/Loss: +5.4%
Time Frame: 1 to 2 weeks
New Positions: Yes, but only on bounces

6/29: August $32.50 PUTS were opened this morning at $2.75. OC saw some buyers step in late in the day and stock closed +1.6% off of its lows. It was down -2.57% on the day and the closing price of $31.42 was the lowest since June 9th. However, the market is oversold and stocks could bounce from here. OC remains below the 20-day and 50-day SMA's and its downward trend line from the May 13 highs. All of this should provide enough resistance to keep bounces under control.

6/28: OC has made a lower high and a lower low and I believe the stock will make a another lower low, or at least retest its recent lows which is almost -5% lower than current levels. The stock is testing its 20-day and 50-day SMA's from below which I also think will hold as resistance. If OC bounces there is also a downward trend line and congestion above to keep things in check. Our stop will $34.72 which is above the downward trend line and its highs from late May and Mid June.

Current Positions: August $32.50 PUTS, entry was at $2.75

Entry on June 29, 2010
Earnings 8/4/2010 (unconfirmed)
Average Daily Volume: 2.3 million
Listed on June 28, 2010

Penn National Gaming, Inc. - PENN - close 23.77 change -0.42 stop 27.60

Target(s): 24.05, 23.60, 23.05
Key Support/Resistance Areas: 27.00, 26.45, 26.00, 24.60, 24.00, 23.50, 22.50
Current Gain/Loss: N/A
Time Frame: 1 to 2 weeks
New Positions: Waiting to be triggered

6/29: Our trigger to enter shorts positions at $24.80 remains the same. If PENN trades up there in the coming days I suggest initiating short positions. There is a lot of overhead congestion and resistance above $24.80 to hold the stock down.

6/28: PENN traded to within 26 cents of our entry trigger and reversed hard to the downside, closing -4.65% on the day. The position has run away from our trigger and I do not suggest chasing it lower. Let's wait for a bounce and be ready to pull the trigger on short positions if the stock trades to our new trigger of $24.80 to enter short positions. This equates to about a 50% retracement of today's losses.

6/26: PENN has a primary and secondary downtrend line as overhead resistance along with all of its SMA's which are declining. It is also below a key support resistance area at $26.45 dating back to late 2009. I believe the stock will bounce a tad higher from here before it makes new lows in the coming days/weeks. Let's use a trigger to enter short positions at $25.75. My primary target is $23.60 but I have also listed $24.05 as a target where the stock may find some support. If the selling intensifies PENN will probably trade down to the $22.50 area which is below our most aggressive target. I'm going to place a wide initial stop at $27.60 to account for volatility and will adjust it once we are in the position.

Suggested Position: August $25.00 PUTS, current ask $2.50, estimated ask at entry $1.90

Entry on June xx
Earnings 7/26/2010 (unconfirmed)
Average Daily Volume: 738,000
Listed on June 26, 2010


Bank of America - BAC - close 15.24 change -0.18 stop 14.65

Target(s): 15.50, 15.70, 16.05
Key Support/Resistance Areas: 16.45, 16.10, 15.00
Current Gain/Loss: -35%
Time Frame: 1 week
New Positions: Closed

6/29: BAC broke below June's low and hit our stop at $14.65. We are flat the position for a loss. My basis for taking this trade was that June lows would hold for a bounce, but it failed and we have to step aside. The next level of support is $14.12 and if BAC breaks that it may go all the way down to the $12 to $13 area.

6/28: On Friday negotiators finished their work on the FinReg reform bill which provided a framework for certainty to the banks, however, on Monday that certainty is now in question. The death of Robert Byrd (D-WV) early this morning and comments from Scott Brown (R-Mass) regarding an unexpected provision in the bill are causing the Obama administration challenges. Other Democrats have come forward today stating that they will not vote for the bill because it fails to properly regulate Wall Street firms. In other words they feel there should be more regulations than in the current form of the bill. The vote was scheduled to take place before the 4th of July holiday (i.e. this week) but it is unclear if the vote will proceed as scheduled. As such, I'm going to adjust the targets lower to $15.50 and $15.70. From a technical perspective, a bullish case can be made on the intraday charts. BAC broke through an hourly downtrend line on Friday and tested the backside of it today. It also did not take out Friday's lows and on the daily chart BAC looks like it is trying to form a higher low. A bearish case can be made because the stock was turned away at the 20-day SMA and it also printed a bearish engulfing candlestick. At the end of the day I believe the broader market is oversold and I expect there to be a bounce. This should get things moving in our direction but I also suggest tightening stops and selling into strength as the stock approaches our lowered targets.

Closed Position: August $15.00 CALLS at $0.78, entry was at $1.20

Annotated Chart:

Entry on June 28, 2010
Earnings Date 7/16/10 (unconfirmed)
Average Daily Volume: 163 million
Listed on 6/26/10


Whirlpool Corp - WHR - close 89.94 change -5.70 stop 105.50

Target(s): 94.10 (hit), 91.50 (hit), 86.05
Key Support/Resistance Areas: 101.70, 99.00, 97.50, 94.00, 85.25
Current Gain/Loss: +58.40%
Time Frame: 1 to 2 weeks
New Positions: Closed

6/29: Our 2nd target of $91.50 was hit today so we are flat WHR for a +58.40% gain. There could be more downside in WHR but I would be cautious of a bounce. If readers still have positions I suggest tightening your stops to protect profits. There is intraday resistance near $92.00 and $94.00.

6/28: WHR traded up to our trigger 0f $97.50 to enter short positions. The stock hit a brick wall and sold off the remainder the day. Our primary target is $91.50 but $94.10 may provide support. This is an area to consider tightening stops and protecting profits. If WHR bounces I believe there is enough overhead resistance to keep things in check, but we may have to exhibit some patience.

Current Position: August $95.00 PUTS @ 9.90, entry was at $6.25.

Annotated Chart:

Entry on June 28, 2010
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 2 million
Listed on June 23, 2010