Current Portfolio:

CALL Play Updates

ProShares UltraShort 20 YR Treasury - TBT - close 36.39 change -0.35 stop 35.55

Target(s): 36.90, 37.50 (hit), 38.00, 39.25, 40.50
Key Support/Resistance Areas: 42.00, 41,00, 39.70, 38.25, 37.55, 34.65
Current Gain/Loss: -7.3%
Time Frame: Several Weeks
New Positions: Yes

8/3: After a brief dip in early trading TBT recovered nicely. Prices are coiling on its intraday chart and a breakout should happen tomorrow or Thursday. If TBT breaks above today's highs it should easily trade to our first two targets which are both below the 50-day SMA. I suggest tightening stops at these levels to see if we can get more out of the trade. A break above the 50-day SMA should easily send TBT towards our more aggressive targets.

8/2: It appears Friday's sell-off in TBT was short lived as I suspected. However, the price action in bonds and equities still seems somewhat disconnected. TBT looks like it is forming a higher low and has 20 more cents to go before closing the gap down on Friday. This will likely act as intraday resistance but I expect TBT to eventually break it and trade back up to our $37.50 target and possibly our more aggressive targets. I suggest readers begin to trail stops higher to see if we can catch a larger move. For now, I've moved the stop up to $35.55 which is below Friday's lows and the upward trend line on the daily chart.

Current Position: Long September $37.00 CALL, entry was at $1.23

Entry on July 26, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 3.8 million
Listed on July 24, 2010

PUT Play Updates

SPDR DJIA ETF - DIA - close 106.39 change -0.34 stop 108.75

Target(s): 105.15, 104.30, 103.65
Key Support/Resistance Areas: 108.00, 107.00, 105.90, 104.75, 104.20, 103.50
Current Gain/Loss: +0.00%
Time Frame: 1 week
New Positions:

8/3: It was an inside day for DIA in that it traded within yesterday's high/low price range. DIA closed just about where it opened so we are currently breakeven on the position. I've raised the first target to $105.15 so that it is just above Friday's high as opposed to its closing price. A trip down to this level could happen fast and it is a good place to consider tightening stops or taking profits. For options traders this level should produce a +20% gain. Our next target is $104.30 which just above the 200-day SMA.

8/2: The DJIA has rallied right into prior resistance from its January highs and is forming a bearish rising wedge pattern. This pattern calls for a sharp decline but may bounce around current levels or push a little higher first. In addition, today's +2% gain in equities has created overbought conditions and I believe DIA will turn back to at least fill the gap higher from today. We'll use a tight stop of $108.75 and I have offered three very realistic near term targets, along with a more aggressive target should things get moving to the downside in earnest. The stop is above a gap down from 5/15 so if DIA closes the gap we have some room. If DIA makes it up to close this gap (5/13 close was $108.10) I would be very surprised to see it go any higher before heading towards our targets. I suggest readers be quick to tighten stops as targets approach because the drop could come quick.

Current Position: Long September $106.00 PUTS, entry was at $2.70

Entry on August 3, 2010
Earnings: N/A (unconfirmed)
Average Daily Volume: 14 million
Listed on August 2, 2010


Netflix, Inc. - NFLX - close 104.41 change +2.53 stop 100.80

Target(s): 106.25, 108.50, 111.35
Key Support/Resistance Areas: 114.00, 112.00, 108.50, 105.50, 103.00, 102.00,
Final Gain/Loss: -24%
Time Frame: 1 week
New Positions: Closed

8/3: NFLX quickly sold of this morning during the first 30 minutes of trading before rebounding over $5 the remainder of the day. This hit our stop so we are out of the position for a loss. I wanted to keep a tight stop on this trade and this morning's weakness shook us out. Stock's are at precarious levels right now and could go either way, including NFLX. Readers who still have positions should have gains so I suggest protecting them and use a tight stop to protect against a reversal. The stock needs to break above yesterday's highs of $105.00 which may produce quick pop to the upside, which is where I would be a seller or use a trailing stop.

8/2: NFLX gapped higher at the open this morning and quickly sold off to fill the gap. This isn't the price action I was expecting on such a strong tape as traders quickly took profits from gains on Thursday and Friday. I believe the stock can still bounce from here as it closed above its intraday downtrend line and the downtrend line that started on 7/22. In addition, the stock has built quite a base in the $101 to $102 area where it is currently finding solid support. However, if the broader market can not break higher from here NFLX will likely hit our stop. I have tightened the targets and suggest readers be quick to close positions or tighten stops as these areas approach.

Current Position: Long September $105.00 CALL at $4.75, entry was at $6.25.

Annotated chart:

Entry on August 2, 2010
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 3.5 million
Listed on 7/31/10

Oil Service HOLDRS - OIH - close 107.73 change -1.80 stop 107.90

Target(s): 108.50 (hit), 110.25, 111.20
Key Support/Resistance Areas: 110.50, 108.60, 107.00, 104.75, 102.80
Final Gain/Loss: +5.7%
Time Frame: 1 to 2 weeks
New Positions: Closed

8/3: After yesterday's impressive gains and trading to within 2 cents of our final target, OIH gapped lower and hit our stop this morning. Baker Hughes, which is a large holding in OIH, lost -13% after their earnings report and was responsible for big portion of the ETF's losses. So we are flat the trade for a small gain. I tightened the stop yesterday to protect capital and prevent a hard reversal. Things looked ugly this morning and even looked like OIH may try to fill yesterday's gap higher, but it rebounded nicely and is now forming an ascending triangle on today's intraday chart. If OIH breaks above $108.15 it should pop higher where I would be a seller into strength or be using a trailing stop to protect profits.

8/2: OIH gapped higher this morning and broke through the $107.00 resistance level of the ascending triangle mentioned in the play release. The sector never looked back and OIH posted +4.18% gains on the day. Call positions were initiated at the open and have already gained +27%. Our target of $108.50 was hit and OIH came within 2 cents of our reaching our $110.30 target before closing about 80 cents below its high of the day. I've adjusted the $110.30 target down 5 cents and have also added $111.20 which is below the 100-day SMA. If OIH breaks over today's high of $110.28 I recommend readers tighten stops to protect against a reversal. There is nothing wrong with booking gains at current levels as well. I've adjusted the stop up to $107.90 to protect capital but a tighter stop could be placed at $108.45.

Closed Position: Long September $110.00 CALL at $3.85, entry was at $3.65

Annotated chart:

Entry on August 2, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 8 million
Listed on July 31, 2010