Option Investor
Newsletter

Daily Newsletter, Thursday, 6/27/2013

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Consumer Spending Soothes Taper Tantrum

by Thomas Hughes

Click here to email Thomas Hughes
Introduction

Global fear of economic slowdown and tapering fears continued to ease. Asian indexes made a sharp rebound on the new stance of Chinese central bankers. The relaxed attitude carried over into the European markets which were relatively calm ahead of today's economic releases here at home. U.S. stock futures were up as well going into the 8:30 time frame and were lifted by somewhat surprising new data on the consumer. Following the announcement European and U.S. stock indexes were indicated higher.


At the open stocks held early gains before moving slightly higher ahead of the pending home sales data. Just before the release of today's housing numbers NY Fed President Dudley went on the record and stole the spotlight. In his remarks Dudley reiterated earlier comments from other Fed officials that the markets expectations of tapering and rate cuts are misplaced and “out of synch”. Rates hikes especially could some much later than expected, long after any thresh hold is reached. He also stated that policy depends on the outlook and not the data, exactly what Ben has been telling us. He went on to say that QE might even be increased if the labor market does not improve and that current assets were likely to be held by the Federeal Reserve for a “long time”.

Dudley's statements put some pressure on stocks. The SPX, INDU and COMP all shed a few points but held onto most of the mornings gains. By Mid-day the indexes had recovered the early highs. An auction of 7 year notes at 1 PM was also met with improved demand resulting in lower yields. Rick Santelli gave the auction a B+ which means it must be OK. Going into the close stocks sold off a bit but managed to maintain the lions share of today's gains with the Dow making another triple digit move.

Today's Data

The weekly jobless claims figures were accompanied by consumer spending and personal income figures. Later in the day pending home sales were added to the mix. Personal income was well ahead of expectations while spending fell a hair short. Personal income rose by 0.5% over the last month and spending rose by 0.3%. Income had been expected to rise only 0.1% with a 0.4% gain in spending. This bodes well for the state of the consumer and leads me to think that buying power is increasing. Stronger income and a growing workforce should lead to stronger GDP growth.


Initial jobless claims fell by 9,000 to 346,000 in this weeks data. This number is in line with expectations and keeps the 4 week moving average below the 350,000 mark. The four week moving average fell by 2,750 to 345,700. At this time it looks like initial claims is holding fairly steady just below the 350,000 line as compared to last year when it was holding steady just above that same line. I drop in claims would be a good sign for the labor market but for now holding steady is OK. So long as job creation out paces lay offs unemployment should tick down, not counting the recent increase we have seen in the participation rate. Next weeks releases of Challenger, ADP, NFP, Unemployment and jobless claims should be closely watched for signs of improvement.



Continuing claims and total claims moved in opposite directions from each other but both held basically flat from last week. Continuing claims fell by -1,000, total claims gained +23,146. Both metrics have been relatively flat over the last three weeks and at historic lows. On a state by state basis it looks like lay offs are mild and widespread, California is the only really volatile area and tops the list for increases in claims once again with +15,000. The next two highest states are Pennsylvania and Florida with +4,000 each. Next weeks employment data bundle may shed new light on the direction of labor trends. This time last year both figures flattened out as well before turning lower into late summer, perhaps this will happen again.

Pending home sales were releases at 10 AM. Pending sales rose only by 0.3% in April, the expectations were for a gain of 1.5% in May. The actual 6.7% increase was well above the expectation but did not provide any lift for the markets. The statements from Dudley that came out just prior may have stolen the thunder this data would have otherwise brought. This week has been a good one for the housing market. The mortgage index and new home sales both reached long term highs and are expected to keep improving. There is worry that rising rates may keep buyers out of the market but the flip side to that argument is that rising rates are also spurring some who are on the fence to get in and buy now.

Tomorrow's data includes Chicago PMI and the final reading on Michigan Sentiment. Chicago PMI is expected in at a low 52 versus the previous reading of 58.7. Michigan sentiment is expected to be near 81 versus the previous 82.7. Next week will be the really important data week. Once again we are at the end of the month and have the monthly releases of car and truck sales, construction spending, ISM, factory order and trade balance as well as the ADP employment figures, Challenger job cuts, Non-farm payrolls, jobless claims and U.S. unemployment figures. Because of the July 4th holiday next week there will be no trading or data on Thursday so next Friday will be a full one for economy watchers.

Oil Holds Steady On Demand Hopes

Signs of improvements in the housing market, easing fears over tapering and the economy are helping oil prices to hold steady. The FOMC driven jitters that emerged last week have pressured oil prices down from the recent peak but the trade found support around the $92.50 earlier in the week. Now prices have risen again to regain the $96 and the $97 level on the hopes that the economy really is improving, that demand/consumption may increase and that tapering fears are misplaced or at least too early. The Oil Index appears to be finding support at the long term trend line drawn from the 2012 lows from early June. Momentum is currently bearish but Stochastic shows there is some underlying support. Shorter term the index is above the 150 day moving average but faces resistance at 1350. Indicators suggest that support may exist around 1,300 but a retest of that support is likely. A break above 1,350 is needed to get bullish on this index again.

Oil Index

Gold Rush, But Not The Good Kind

When gold decides to make its move it makes its move. The metal has lost over 10% in over a week and nearly 30% since the January/February peak of $1700. Trading today began positive, but only by a dollar or two, but later in the day reversed and dropped by $5 or so before really taking the plunge and shedding another $25. Not much compared to the $50 and $70 dollar declines we have witnessed yesterday and last Thursday but another big decline nevertheless. My target of $1200 has been reached but the metal is still indicated down.

The Gold Index

The Gold Index has also been moving lower since breaking below the 78.6% retracement level last week. Momentum is bearish but may be peaking and the index is oversold. This is not an indication of a bottom but merely a caution against new bearish positions at this time. The index is bearish and oversold in the longer term as well but indicated lower. My target at this time is for a full retracement to the 2008 low around $65/$70.

Dollar Strengthens Versus The Yen

The new developments from China's central bankers and easing fears of FOMC tapering helped to boost Asian indexes in overnight trading. The major indexes all closed in the green with the Nikkei leading the way. The Nikkei gained close to 3% versus more modest 0.5% gains made by other regional indexes. The volatility is linked to the yen value and ongoing QE programs of Abe and Kuroda. The yen has been wavering versus the dollar and may have finally broken through an important resistance level. The pair has been trading up on a bounce from the 95 level and met with resistance last week when the FOMC put tapering firmly on the table. The pair is indicated up on the daily charts but faces resistance around the 100 level. Failure to hold the current level could bring the pair down to retest support at 95.

USD/JPY

U.S. Data Lifts European Markets

European markets had been treading water before the release of jobless claims, income and spending data. After that there was a noticeable pick up in the European markets and in the euro trade. The euro has been losing ground against the dollar, dropping the last 6 days in a row. Today's bounce also comes at the important long term support/resistance line of 1.3000. Long term indicators show that support exists at this level but trend is neutral. On the daily charts the pair is indicated down but oversold in the near term. The pair may hold at this level until the next cue from the ECB which is due out next week.

EUR/USD

Story Stocks

Earnings reports were not plentiful but there were a couple of big names on the list. For starters Winnebago nearly doubled its revenue from last year and posted earnings in line with the expected $0.27 per share. The stock popped initially on the news but failed to hold a previous area of resistance. The stock has been in a range since the beginning of the year and is indicated to remain so at this time.

Winnebago

KB Homes reported a smaller than expected loss. The home builder was expected to reported a net loss of -$0.06 but cut that by a third. The reported -$0.04 came on a 73% surge in revenue from the year ago quarter. This is the seventh quarter of net gains in home sales for the company with a 39% jump this quarter alone. The company says the 2013 outlook remains “favorable” and that they expect to see significant profits in the third and fourth quarters of this year. KBH is expected to be profitable by year end and for that profitability to continue into next year. The stocked popped initially but sold off throughout the day. The stock is sitting just above the 150 day moving average and just below the 30 day EMA with indications of support at this level.

KB Homes

ConAgra Foods reversed the previous years loss in this quarter and matched expectations. The company reported $0.59 per share but also guided the full year low a little lower than expected. Other news within the report were higher than expected cost “synergies” from a recent merger that are expected to lower operating costs. The stock jumped in early trading and was able to carry that through to the end of the day. The stock did meet with resistance that was able to contain prices for today. Indicators are bullish and point to possible higher prices.

Conagra

Nike reported after the bell and beat expectations with increased revenue and earnings. The company reported $0.76 per share versus the expected $0.74. Revenues are up 8%, future orders are up 7% and inventories are up 7%. The company was also able to increase gross margins through pricing and other means. Management has big expectations for the coming year as it positions itself to capitalize on the growing yoga wear trends and its core brands. While the company did not give any guidance the 8% increase in future orders is indicative of expected revenue and earnings growth in the coming quarters. The stock traded higher all day and increased those gains in after hours trading. The stock is moving up from long term support and is indicated higher on the daily charts. There is resistance around the recent highs of $66.30.

Nike

The Indexes

The indexes have completed another big day. The Dow made another triple digit move, I forget how many in a row it has been, the S&P nearly closed in double digits. The NASDAQ moved up more than 25 points as well and all the indexes closed off the day's highs. Starting with the SPX we can see that the index did indeed break the longer term trend set at the end of last year. After the initial fall it found support at the previous all time highs and is now bouncing higher. The bounce is finding a little resistance around the 30 day EMA and will likely find more if it tests the previous trend line. The indicators, which would be bullish if the index had not broken the trend line, are at least showing support at this level. This chart looks like it could be range bound, without a strong break back above the trend line that range is more likely. I have a neutral to bullish stance in the short term on this index.

SPX daily

Looking at the Dow the picture is a little different. This index is only just now bouncing off the same long term trend the SPX broke through last week. This index is showing similar MACD and stochastic signals that were only neutral for the SPX. The SPX was in this same position just a week ago and broke the trend. There is risk here that the general market could pull the Dow off track. It is also possible that one or more of the blue chips could be the next market leaders. Alcoa reports first and is scheduled for Monday July 8th, just two weeks away.

Dow daily

Longer term the SPX is still well above the primary trend but momentum is bearish and stochastic is moving lower. The index is still above the 150 day moving average however, and long term overbought conditions have been alleviated. This takes some of the bearish pressure off, now its time to see if the the bulls can keep prices above long term support. Earning season kicks in for real about two weeks from now, plenty of time for the index to consolidate above or break support at 1560-1575.

SPX weekly

Once again the Dow picture looks a lot different. Longer term the index is making a nice bounce from the trend line (remember these weekly candles are only partially formed at this time, tomorrow could make all the difference) and the indicators are in perfect position for a quick snap back into bull mode. These early earnings reports could stoke expectations for the rest of the season, two weeks of hoping is enough time to get the Dow back up to retest its recent highs. A break above those highs would be bullish longer term while a failure may lead to a longer term market reversal than the one we just had.

Dow weekly

It seems that the Fed, the FOMC and tapering may get moved to the back seat for a couple of weeks as earnings season comes to a boil. The index are in prime position to move up on hope or break down on fear. Since fear of the Fed appears to be receding, and so far earnings are good-ish, I think the next two weeks could see the markets drifting up. There is also the barrage of economic data we're going to get next week to consider as well. For now, the indexes are within trading ranges that may take two or more weeks to play out. As ever, be on the lookout for good trades and keep an eye on the Fed. The data may not trigger tapering but it will point to when the thresh hold, and timing of tapering, will be reached.

Until then, remember the trend!

Thomas Hughes


New Option Plays

Transportation

by James Brown

Click here to email James Brown


NEW DIRECTIONAL PUT PLAYS

CH Robinson Worldwide - CHRW - close: 55.73 change: +0.61

Stop Loss: 56.65
Target(s): 50.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
CHRW is in the transportation sector. The stock has struggled in recent weeks and been downgraded twice just this month. The $56.00-55.75 area was significant support and the breakdown several days ago is very bearish. The stock market's bounce has allowed CHRW an oversold bounce back to prior support and now new resistance.

This looks like a great entry point to launch bearish positions with today's intraday pullback from resistance near $56.00. I am suggesting a trigger to buy puts at $55.45. If triggered our target is $50.50 but we might adjust it down the road. The 2012 low was $50.81 and could be support. FYI: The Point & Figure chart for CHRW is bearish with a $48 target.

NOTE: The July options only have three weeks left.

Trigger @ 55.45

- Suggested Positions -

Buy the Jul $55 PUT (CHRW1320S55) current ask $0.80

- or -

Buy the Aug $55 PUT (CHRW1317T55) current ask $1.85

Annotated Chart:

Entry on June -- at $---.--
Average Daily Volume = 1.5 million
Listed on June 26, 2013



In Play Updates and Reviews

S&P 500 Testing Resistance

by James Brown

Click here to email James Brown

Editor's Note:

The U.S. stock market is up three days in a row. The S&P 500 tagged resistance near 1620 and its simple 50-dma this morning and stalled.

CI & SODA were triggered today.
We want to exit our GMCR trade immediately.
AGU was stopped out. EBAY has been removed.
I have updated a few stop losses tonight.


Current Portfolio:


CALL Play Updates

Automatic Data Processing - ADP - close: 69.37 change: +0.02

Stop Loss: 67.90
Target(s): 74.00
Current Option Gain/Loss: -21.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/27/13: Hmm... ADP's performance today was pretty disappointing. Shares failed at resistance near $70.00 and the stock closed virtually unchanged. That's not very encouraging given the market's widespread advance. Tonight we are raising the stop loss to $67.90. I am not suggesting new positions at this time.

- Suggested Positions -

Long Aug $70 call (ADP1317H70) entry $1.65

06/27/13 new stop loss @ 67.90

Entry on June 18 at $69.25
Average Daily Volume = 1.8 million
Listed on June 17, 2013


Cigna Corp. - CI - close: 72.56 change: +1.19

Stop Loss: 69.75
Target(s): 74.85
Current Option Gain/Loss: + 9.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/27/13: The rally in CI continues and shares broke through short-term resistance at the $72.00 level. Our trigger to buy calls was hit at $72.05.

FYI: The Point & Figure chart for CI is bullish with an $82 target.

- Suggested Positions -

Long Oct $75 call (CI1319J75) entry $2.40

06/25/13 correction: use the October $75 call (CI1319j75)

Entry on June 27 at $72.05
Average Daily Volume = 1.8 million
Listed on June 24, 2013


CME Group Inc. - CME - close: 76.52 change: +0.21

Stop Loss: 74.95
Target(s): 84.00
Current Option Gain/Loss: -53.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/27/13: Warning! I am growing increasingly worried about our CME trade. The U.S. stock market has produced one of its biggest three-day rallies of the year and shares of CME have not participated. Readers will want to seriously consider an early exit now. I am not suggesting new positions.

Earlier Comments:
I do expect some resistance at $80.00 but our target is $84.00.

*small positions* - Suggested Positions -

Long Jul $80 call (CME1320G80) entry $1.30

06/27/13 Reiterating the idea to just exit early now
06/26/13 new stop loss @ 74.95, readers may want to exit early now since CME is not participating in the market's rally.

Entry on June 25 at $77.85
Average Daily Volume = 3.0 million
Listed on June 22, 2013


Green Mtn Coffee Roasters - GMCR - close: 73.84 change: -1.77

Stop Loss: 67.75
Target(s): 95.00
Current Option Gain/Loss: Jul80c: -35.1% & Aug85c: -20.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/27/13: Caution! The action in GMCR today was bearish. Shares gapped open higher but struggled with short-term technical resistance at its 10-dma. Then midday, around lunchtime, the stock collapsed and shares eventually settled with a -2.3% loss, still clinging to technical support at its 40-dma. Technically today's move has created a bearish engulfing candlestick reversal pattern.

We are suggesting an early exit immediately. Close positions at the opening bell tomorrow morning.

Earlier Comments:
GMCR can be a volatile stock so we do want to keep our position size small to limit risk.

- Suggested Positions -

Long Jul $80 call (GMCR1320G80) entry $1.45

- or -

Long Aug $85 call (GMCR1317H85) entry $3.20

06/27/13 suggest an early exit immediately (at the open tomorrow)
06/26/13 triggered at $76.00
06/24/13 Strategy Update: Move the trigger to buy calls down to $76.00. Also add a second buy-the-dip trigger at $70.50. Adjust the stop loss down to $67.75. Adjust the options to July $80 or August $85 calls

Entry on June 26 at $76.00
Average Daily Volume = 3.3 million
Listed on June 19, 2013


Starbucks Corp. - SBUX - close: 65.69 change: -0.11

Stop Loss: 62.75
Target(s): 69.50
Current Option Gain/Loss: Jul$65c: +21.4% & Aug65c: +16.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/27/13: SBUX also gapped open higher this morning but the rally didn't last very long. Shares underperformed the broader market with a -0.16% decline. The simple 50-dma has risen to $63.15. Tonight I am raising the stop loss to $62.75.

- Suggested Positions -

Long Jul $65 call (SBUX1320G65) entry $1.35

- or -

Long Aug $65 call (SBUX1317H65) entry $2.30

06/27/13 new stop loss @ 62.75
06/21/13 triggered at $64.25.

Entry on June 21 at $64.25
Average Daily Volume = 4.6 million
Listed on June 20, 2013


Shutterfly, Inc. - SFLY - close: 56.11 change: +0.08

Stop Loss: 52.40
Target(s): 59.75
Current Option Gain/Loss: Jul55c: + 0.0% & Aug60c: - 2.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/27/13: SFLY has extended its rally to five days in a row. Yet today's performance was less than exciting with a meager eight-cent gain. Has the rally run out of steam? Shares may need to retrace back toward $54.00 or its 10-dma before moving higher.

Earlier Comments:
The $55.00 level is significant resistance and a breakout here could spark a short squeeze. The most recent data listed short interest at 19% of the small 34 million share float. FYI: The Point & Figure chart for SFLY is bullish with an $84 target.

- Suggested Positions -

Long Jul $55 call (SFLY1320G55) entry $2.40*

- or -

Long Aug $60 call (SFLY1317H60) entry $2.00*

06/26/13 triggered on gap open higher at $55.43. Trigger was $55.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on June 26 at $55.43
Average Daily Volume = 628 thousand
Listed on June 25, 2013


SodaStream Intl. - SODA - close: 72.35 change: +1.05

Stop Loss: 68.65
Target(s): 79.00
Current Option Gain/Loss: -10.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/27/13: The rebound in SODA continued and shares finally broke the two-week trend of lower highs. Shares also hit our suggested trigger to buy calls at $72.50.

Earlier Comments:
Last Friday's high was $72.35. If we are triggered at $72.50 our target is $79.00. The stock struggled with resistance at $80.00 back in 2011 so the $80 level could still be trouble. SODA can be a volatile stock so traders may want to limit their position size to reduce risk.

- Suggested Positions -

Long Jul $75 call (SODA1320G75) entry $2.45

Entry on June 27 at $72.50
Average Daily Volume = 1.5 million
Listed on June 22, 2013


S&P500 SPDR ETF - SPY - close: 161.08 change: +0.94

Stop Loss: 158.75
Target(s): 164.75
Current Option Gain/Loss: +36.2%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
06/27/13: This is it! Today and tomorrow is a very important (short-term) test for the S&P 500 and the SPY. The S&P 500 index has resistance near 1620 and its simple 50-dma (that's about 162.00 for the SPY).

The S&P 500 index hit 1620.07 and stalled. A reversal here might reaffirm the down trend that began from the May 22nd peak. A breakout higher could spark some short covering.

We are adjusting the stop loss on this trade to $158.75 and adjusting the exit target to $164.75. Cautious traders may want to just take profits now (currently up +36%). I am not suggesting new positions.

- Suggested Positions -

Long Aug $162 call (SPY1317H162) entry $2.40

06/27/13 new stop loss @ 158.75, adjust target to $164.75
06/22/13 adjust stop loss to $152.90
06/21/13 triggered on dip at $158.00

Entry on June 21 at $158.00
Average Daily Volume = 162 million
Listed on June 20, 2013


SPDR S&P Oil & Gas Exploration - XOP - close: 58.36 change: -0.07

Stop Loss: 55.90
Target(s): 62.50
Current Option Gain/Loss: -12.7%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
06/27/13: Uh-oh! The action in the energy sector today was worrisome. Crude oil prices rallied but the energy sector retreated from its morning highs. The action in the XOP looks bearish with a second failed rally in two days time near its 50-dma and 100-dma. Let me repeat - this is a warning signal. I am not suggesting new positions and more conservative traders may want to just exit now.

The plan was to keep our position size small to limit our risk.

*small positions* - Suggested Positions -

Long Sep $60 call (XOP1321i60) entry $2.35*

06/27/13 Warning! The action in the XOP looked bearish today
06/26/13 triggered on gap higher at $58.80. Trigger was $58.60
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on June 26 at $58.80
Average Daily Volume = 4.2 million
Listed on June 25, 2013


PUT Play Updates

Joy Global, Inc. - JOY - close: 49.44 change: +0.45

Stop Loss: 50.25
Target(s): 41.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
06/27/13: JOY managed a bounce today but the down trend remains unchanged. There is no change from my Wednesday night new play comments.

Earlier Comments:
The stock has been underperforming and shares hit new lows for the year this week. JOY did not participate in the market bounce today. It might be tempting to buy puts now but JOY does appear to have what could be significant support in the $47.50-48.00 zone dating back to summer of 2012 (see the weekly chart below). Therefore, I am suggesting a trigger to buy puts at $47.40. If triggered our multi-week target is $41.00.

Trigger @ 47.40

- Suggested Positions -

Buy the Aug $45 PUT (JOY1317T45)

Entry on June -- at $---.--
Average Daily Volume = 2.1 million
Listed on June 26, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 59.72 change: +0.14

Stop Loss: 53.75
Target(s): 74.50
Current Option Gain/Loss: +37.2%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
06/27/13: CBI didn't move much on Thursday. Shares merely drifted sideways along resistance near the $60.00 level.

Earlier Comments:
Last time we added CBI we successfully caught the bounce from mid April back toward its March highs. You can read the background details and bullish fundamentals for CBI in our original play description
here, since it still applies. Just scroll down to the "longer-term trades" section of the page.

*Small Positions* - Suggested Positions -

Long 2014 Jan $65 call (CBI1418A65) entry $2.55

06/24/13 triggered @ 56.75
06/22/13 adjust entry trigger to $56.75
06/15/13 entry strategy change: change the breakout trigger at $65.25 to a buy-the-dip trigger at $56.50. Adjust the stop loss to $53.75.
Adjust the option strike to the 2014 Jan. $65 call

Entry on June 24 at $56.75
Average Daily Volume = 1.8 million
Listed on June 01, 2013


CLOSED BEARISH PLAYS

Agrium Inc. - AGU - close: 86.52 change: -0.51

Stop Loss: 87.71
Target(s): 81.00
Current Option Gain/Loss: - 28.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/27/13: Our AGU trade has been stopped out. We tried to prevent this from happening by adjusting the stop loss higher last night to $87.71, which was just above the simple 10-dma. The expectation was AGU might rebound to its 10-dma and reverse. Unfortunately the stock market's widespread rally this morning produced a gap open higher in AGU and shares opened at $87.79, stopping us out immediately. Pouring salt in the wound was AGU's failure at the $88.00 level and subsequent underperformance with a -0.5% drop today. Nimble traders may want to buy puts again with a stop above today's high.

Earlier Comments:
I am suggesting we limit our position size and keep positions small to limit our risk.

*Small Positions* - Suggested Positions -

Jul $85 PUT (AGU1320s85) entry $1.25 exit $0.90 (- 28.0%)

06/27/13 stopped out on gap open higher at $87.79
06/26/13 adjust stop loss to $87.71
06/22/13 new stop loss @ 87.60
06/20/13 triggered on gap down at $87.71, trigger was $87.80
06/19/13 keep position size small.

chart:

Entry on June -- at $---.--
Average Daily Volume = 744 thousand
Listed on June 15, 2013


eBay Inc. - EBAY - close: 52.14 change: +0.81

Stop Loss: 52.05
Target(s): 45.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
06/27/13: EBAY outperformed the market again with a +1.5% gain. Shares are not cooperating with us. The larger trend still looks bearish. Plus today's rally did stall at its simple 200-dma. Yet it seems unlikely that EBAY will hit our suggested entry point at $49.85 soon. Therefore we are removing it from the newsletter. Investors may want to keep an eye on EBAY for a breakdown below $50.00. Although at the moment the rebound this week is forming a potential bullish reversal pattern on EBAY's weekly chart.

Trade did not open.

06/27/13 removed from the newsletter
06/22/13 adjust option strike from July $50 put to Aug. $50 put

chart:

Entry on June -- at $---.--
Average Daily Volume = 10.7 million
Listed on June 12, 2013