IBM and Texas Instruments both reported earnings after the close and both disappointed.

IBM said newly signed service contracts fell -12% to $12.3 billion while total outsourcing services signings fell -19% to $6.5 billion. IBM fell -$6 in after hours.

TXN expressed hope for the third quarter but said weaker than expected orders from mobile phone customers like Nokia caused the company to miss Wall Street forecasts. TXN fell -5% in after hours trading.

This is not a good sign although futures are up slightly overnight after a serious plunge on the earnings news.

I am going to raise the stops in case the market rolls over on Tuesday.

VMWare reports earnings on Tuesday after the market close. We need to close the VMW position at the open on Tuesday.

I am not taking the entry on CF this morning. At the open it was only positive for about 20 seconds before it crashed. It spiked positive again about 10:00 by about 15 cents but could not hold it with some high volatility and immediately rolled over again. I believe any thinking trader would have realized that positive by about 15 cents and immediately dropping did not fit the spirit of when we want to be writing puts. No entry and cancel the play on CF.

Check the graphic for new stops.

Jim Brown

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