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Fri: Top Buys DOW KBH DHI Top Sells DIA SPY

Primary Trades:

DIA and SPY Aug or Sep in-the-money puts are buys on market bounces, and may also be used to hedge calls. DOW is fundamentally undervalued and may rise into the low 40s within a month. Sep 40 calls may be best at 0.80 or less (also, the Aug 40 calls closed at 0.50). KBH and DHI may be volatile, because many are negative on residential housing stocks, while others believe those stocks are fundamentally undervalued and the housing market will have a soft landing. KBH Jul 45 calls and DHI Jul 22.5 calls are buys on pullbacks.

Secondary Trades:

None

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Primary Trade: An intermediate or long term trade. Timing can be off substantially. Volatility not a factor. Risk is low to moderate. Potential return is often moderate.

Secondary Trade: A short term trade. Timing must be accurate or volatility must be high. Risk is high. Potential return is high.

Secondary Trades should be generally avoided, although considered. Note: If Secondary Trades are taken, they may affect Primary Trades.