Editor's Note:
Good Evening. We closed 3 positions today, dropped IPI, and were stopped out of MRK. X had a huge turn around and I suggest readers be looking to take profits, especially on further strength. LULU's gains and SBUX's losses essentially offset each other. The big disappontment was DE but I think we salvaged what we could and now move forward.

The market volatility remains extremely difficult to deal with and it is not a healthy environment. Yesterday I was looking to get long at the SPX 1,055 area and now I'm looking to get short on additional strength. It seems we go from overbought to oversold in a matter of hours. Until a direction is resolved I urge readers to use small position size to properly manage risk and be quick to tighten stops and protect capital as positions are moving in the right direction. We'll keep releasing plays with good set-ups and try to stay one step ahead of the market. Please email me with any questions.

Current Portfolio:

CALL Play Updates

United States Steel - X - close 44.29 change +3.07 stop 43.15 *NEW*

Target(s): 43.25 (hit), 44.40, 45.25, 46.20
Key Support/Resistance Areas: 48.70, 46.25, 50-day SMA, 43.50, 40.80, $40.00
Current Gain/Loss: +26%
Time Frame: 1 week
New Positions: No

7/20: X made a huge turn around today and our position has now gained +26% after looking terrible yesterday. I've adjusted the targets and moved up the stop to $43.15. I suggest readers be smart about protecting profits here but also try to let the position run as far as possible. Our next target of $44.40 should be hit in the morning. This is near today's highs and the 50-day SMA and readers should consider tightening stops or simply taking profits at this level, especially if you can not trade intraday. Our next targets are $45.25 and $46.20 which are at the bottom and top of a congestion area from mid June. There is good a chance X pulls back from its 50-day SMA so caution is urged.

7/19: X if forming a bear flag on its intraday chart and looks vulnerable here. The aftermarket is looking weak and X may hit our stop tomorrow. Readers may want to consider exiting at the open to preserve capital. The stock is holding an upward trend line and is hovering around its 20-day SMA but the if the market gains momentum to the down side tomorrow I don't anticipate X moving being able swim to upstream.

Current Position: August $46.00 CALLS, entry was at $1.38

Entry on July 15, 2010
Earnings Date 7/27/10 (unconfirmed)
Average Daily Volume: 13.5 million
Listed on July 14, 2010

PUT Play Updates

PowerShares QQQQ Trust - QQQQ - close 45.26 change +0.54 stop 46.10

Target(s): 45.05, 44.85, 44.60, 44.40 (hit 7/17, 7/20), 43.75
Key Support/Resistance Areas: 46.77, 45.25, 44.46, 43.50, 42.50, 41.00
Current gain/loss: -39.00%
Time Frame: 1 weeks
New Positions: Yes

7/20: QQQQ gapped lower and traded to within 11 cents of our $43.75 target. The market looked ugly and after an early bounce and the Q's even retreated to retest its lows. For intraday traders a stop should have place above the first 30 minute high of $44.12 which would have protected small profits in this position. After this level was broken the Q's proceeded to bounce and never looked back, surging +3% from its lows. Will there be follow though? It appears there will be some with AAPL's earnings report which is boosting the NASDAQ 100 futures +0.50% in the aftermarket. This equates to about 23 cents in QQQQ which is below our stop and last week's highs. It is amazing how things changed on a whim this morning which we have seen a lot of lately, and it has helped and hurt our positions. This time it is painful but we have a plan and we need to stay nimble to find a proper exit. So I have listed additional immediate targets above which are intraday support/resistance areas. QQQQ should retrace some of these gains and these are areas where the ETF may find support. They are good areas to tighten stops or exit positions. It wouldn't surprise me to see QQQQ retrace a good portion today's gains and retest its declining 20-day SMA (currently $44.51 and declining). The Q's are also below two downtrend lines and its 200-day and 50-day SMA's. It will be interesting to see how it plays out.

7/19: The NASDAQ 100 futures are down over -1% compared to the 4:00 PM close after IBM and Texas Instruments earnings. This should put pressure on QQQQ and get the ETF moving towards our more aggressive targets. As these targets approach I suggest readers tighten stops to see how much more we can get out of the position.

Current Position: August $45.00 PUTS, entry was at $1.85

Entry on July 8, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 100 million
Listed on July 7, 2010

Wynn Resorts - WYNN - close 80.01 change +0.44 stop 85.50

Target(s): 81.50, 80.50, 79.50, 77.75
Key Support/Resistance Areas: 85.00, 84.00, 76.50, 72.00
Current Gain/Loss: -33%
Time Frame: 1 week
New Positions: Yes

7/20: Once again WYNN was down -$2 at the open and pulled a complete reversal. Conservative traders may want to consider exiting this position and preserving capital as we have already lost -$1.50 in the option premium. After WYNN broke below key support levels and its 20-day, 50-day and 100-day SMA's the stock has catapulted higher with the broader market. It's time to salvage what we can so I have listed 4 targets above and I suggest readers begin too tighten stops or exit positions at these levels. NOTE: I view this trade as being aggressive and potentially quick.

7/19: WYNN broke down early and hit our trigger of $79.10 to enter short positions. The stock then recovered the remainder of the day and closed marginally higher. WYNN broke through an intraday down trend line and then rallied back up to test it from underneath which I am expecting to be a kiss goodbye. It is also below its 20-day and 50-day SMA's which should provide further resistance. However, I expect this to be a quick trade and suggest readers be quick to tighten stops or simply take profits if WYNN proceeds lower from here. Considering today's reversal I have listed a target just above today's low as the immediate near term target. I've also adjusted the more aggressive targets to give us the best chance at hitting them and taking profits.

NOTE: I view this trade as being aggressive and potentially quick.

Current Position: August $75.00 PUTS, entry was at $3.50

Entry on July xx
Earnings 7/29/10 (unconfirmed)
Average Daily Volume: 2.92 million
Listed on July 17, 2010


Intrepid Potash, Inc. - IPI - close 23.07 change +0.90 stop 20.90

Target(s): 22.85, 23.20, 23.80
Key Support/Resistance Areas: 23.25, 22.00, 21,00
Time Frame: 1 to 2 weeks

7/20: IPI traded within 6 cents of our entry trigger again today but didn't let us in. The stock proceed to gain over +5.5% off of its lows and has already hit our first target. We came close but I can not chase the stock at these levels so I have to drop the play. Frustrating!

7/19: IPI traded to within 6 cents of our entry before bouncing. I anticipate getting filled tomorrow. Futures are down in the aftermarket so readers may want to consider entering at a lower price in the $21.50 to $21.60 area depending on the strength of the weakness tomorrow. Our official entry remains at $21.80 which is -1.5% lower than current prices.

Suggested Position: August $22.00 CALL, current ask $1.30, estimated ask at entry $1.15

Annotated Chart:

Entry on July xx
Earnings Date 8/4/10 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on 7/17/10

Merck & Co - MRK - close 35.66 change -0.14 stop 35.38

Target(s): 36.30, 36.55, 36.95, 37.45
Key Support/Resistance Areas: 39.50, 38.75, 38.00, 36.35, 35.80
Final Gain/Loss: -33.8%
Time Frame: 1 to 2 weeks
New Positions: Closed

7/20: Today's early morning weakness got us and we were stopped out of MRK at the open. The stock came within 15 cents of hitting our target on Friday and then proceeded to shed more than -4% to this morning's low. MRK broke through its 200-day, 100-day, and 20-day SMA's early and then rallied to retest them from below. It's not a pattern I like and I suggest readers who may still have positions to keep a tight leash on this trade. I would be a seller into any further strength or at least trail stops up to protect capital.

7/19: MRK had a relatively quiet day and remains above its 200-day, 50-day, and 20-day SMA's. My comments from 7/17 have not changed.

Closed Position: August $36.00 CALLS at $0.80, entry was at $1.21

Annotated Chart:

Entry on July 12, 2010
Earnings Date 7/30/10 (unconfirmed)
Average Daily Volume: 18 million
Listed on 7/10/10


Deere & Co. - DE - close 60.69 change +0.58 stop NONE

Target(s): 59.10 (hit), 58.20, 57.05
Key Support/Resistance Areas: 59.00, 58.00, 56.85, 56.15, 55.00, 54.15
Final Gain/Loss: -61.6%
Time Frame: 1 to 2 weeks
New Positions: Closed

7/20: Our target of $59.10 was hit this morning so we are flat DE for a larger loss than I would like. It looked like it was going to be an ugly day but everything reversed so exiting or tightening stops at the target to protect capital was the right move. This has been a stressful trade and I'm relieved it is over so we can find better opportunities.

7/19: DE gapped higher and then gave it up early, but rebounded into the close. I'm expecting a weak market tomorrow and suggest readers begin to tighten stops and exit positions as our targets approach. My comments from 7/17 have not changed.

Closed Position: August $55.00 PUTS at $1.15, entry was at $3.00

Annotated Chart:

Entry on July 6, 2010
Earnings 8/18/2010 (unconfirmed)
Average Daily Volume: 5.4 million
Listed on July 3, 2010

Lululemon Athletica Inc. - LULU - close 38.28 change +0.39 stop 40.42

Target(s): 38.00 (hit), 37.35 (hit), 35.80, 34.55
Key Support/Resistance Areas: 42.25, 39.75, 37.00, 35.16, 32.75
Current Gain/Loss: +11.5%
Time Frame: 1 week
New Positions: Closed

7/20: LULU opened near our target of $37.35 and oscillated around it most of the morning before breaking out with the rest of the market. The stock could not break below its upward trend line mentioned below and is just not ready to let go yet so protecting capital and closing the position for a gain was the right move. LULU has a lot of resistance up to the $40.00 to $41.00 area which could be another opportunity for a short play.

7/19: LULU came within 8 cents of our 2nd target where it found support and reversed higher. As such I'm going to raise the target 10 cents to $37.35. We currently have +3.2% gains and the new target should produce a winning trade. LULU is getting close to touching its a upward trend line from last July and the next target is a good place to tighten stops to see if we can get more out of the trade. If LULU breaks this trend line the stock could pick-up steam to the downside towards the 200-day SMA.

Closed Position: August $35.00 PUTS at $1.45, entry was at $1.30

Annotated Chart:

Entry on July 12, 2010
Earnings 8/19/2010 (unconfirmed)
Average Daily Volume: 700,000
Listed on July 1, 2010

Starbucks Corp. - SBUX - close 25.77 change +0.28 stop 26.05

Target(s): 25.30 (hit), 25.00 (hit), 24.85 (hit), 24.40
Key Support/Resistance Areas: 26.50, 26.00, 25.25, 24.80, 24.00, 23.60, 22.50
Current Gain/Loss: -17.8%
Time Frame: 1 to 2 days
New Positions: No

7/20: SBUX gapped open lower and hit our target of $24.85. Per yesterday's updates we were looking for an exit and this was the best we could get prior to earnings tomorrow. In the end, I had too loose of stop on this trade and we should have been out earlier, but we were able to limit losses as much as possible at the exit.

7/19: SBUX reports earnings after the bell on Wednesday and I suggest readers exit positions prior to the close on Wednesday. Today the stock was down about -1% in early trading and I'm looking for more weakness tomorrow. We have 3 near term targets listed above which are good areas to consider exiting positions or tightening stops to ride this down as far as we can prior to earnings. For options traders, I strongly encourage you to exit prior to earnings as the volatility could get sucked out of the premium.

Closed Position: August $25.00 PUTS at 1.15, entry was at $1.40

Annotated Chart:

Entry on July 8, 2010
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on July 3, 2010