Option Investor
Newsletter

Daily Newsletter, Wednesday, 11/13/2013

Table of Contents

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

Market Wrap

More Fed-Induced Rally

by Keene Little

Click here to email Keene Little
Following head-fake Thursday last week we've had a strong rebound in the stock market, keeping the pattern of bullish opex weeks alive. It looks like further upside potential from here as bullish hopes continue following rumors of more Fed support from Janet Yellen.

Market Stats

Last Thursday's strong decline was looking decidedly bearish for the stock market but like so many previous Thursdays prior to opex week it was just a head fake to draw the bears in and provide short-covering fuel to get a stronger rally going. Friday's big turnaround was proof of what was done on Thursday. Slight market manipulation perhaps? Big-money banks and their hedge fund buddies know how to play this game and they play it well. The pattern of bullish opex weeks, to protect sold puts and make some short-term money with weekly options, is holding again and when that pattern changes we'll know the market is talking. But for now it's looking like we've got some further upside potential.

There were rumors this morning that the Fed's Chairwoman-elect Janet Yellen was going to release a copy of her comments that she'll present at the Senate's hearing on Thursday. It's expected that she will continue the Fed's accommodative strategy, which the market of course loves to hear. There was a final spurt into the close as the rumors of the release of her comments persisted and they were in fact released after the close. Equity futures are higher in the after-hours session. We could see the market continue higher on the "good" news that Yellen will continue to feed money to the banksters. But the short-term pattern has it looking ready for at least a pullback to correct today's rally so there could be a little bit of sell-the-news on Thursday.

There was very little news and even fewer economic news to move the market today other than the expected positive (for the market) news from Janet Yellen. Between that and the effort to rally the market during opex week the poor bears didn't stand a chance. Now we look for upside targets to see how it does from here.

As is true for the other indexes, NDX provides a study in channels and I'll start with its charts tonight. There are a few trend lines and price projections in the 3350-3500 area, which is where NDX is now trading, so while I see further upside potential we have to keep in mind NDX has now entered a potentially strong area of resistance. The weekly chart shows two slightly different up-channels, one starting from the November 2008 low through the October 2011 low and the other from the March 2009 low through the October 2011 low. The tops of those two channels are currently near 3380 and 3460. A trend line along the highs from December 2012 - May 2013 is currently near 3435.

Nasdaq-100, NDX, Weekly chart

Not shown on the weekly chart above is a large 3-wave rally off the 2002 low. NDX has made it above the price projection at 3355 where the 2nd leg of the rally off the 2002 low is 162% of the 1st leg (the 2nd leg is the 2009-2013 rally). The rally from 2009 will have two equal legs at 3412, only 7 points above today's closing high. If the bulls can keep this up for a little longer we could see it reach the trend line along the highs from December 2012 and the top of the up-channel from 2009, both near 3485 in mid-December. So there's clearly some more upside potential but there's also a lot of congestion right here that could thwart the bull's efforts at any time.

Adding in some shorter-term up-channels and trend lines along highs and lows since September-October, along with a price projection for the 5th wave in the move up from August, there's upside potential to about 3425-3440. If it can rally through that area then the next price projection is at 3513 (where the 5th wave would equal the 1st wave up from August). As long as this morning's low at 3346 holds we should see higher prices but this is a rally that could fail at any time to caution is required if holding long positions. My feeling is that the catalyst for a market decline will arrive during the night from overseas and it will start us down with a large gap down that will not recover like this week's gaps.

Nasdaq-100, NDX, Daily chart

Key Levels for NDX:
- bullish above 3402
- bearish below 3346

From a shorter-term perspective, the 3-wave move down from October 30th has now been followed by a 3-wave move (so far) back up and achieved two equal legs up from November 7th at 3398. Watching today's rally, NDX stayed within an up-channel from this morning's low and came close to the top of it with the final push higher into the close. Today's rally counts well as a 5-wave move and therefore calls for a pullback Thursday morning before pressing higher again. But if the 3-wave move up from November 7th completes a b-wave in what will become a larger A-B-C pullback from October 30th then we'll see the start of a stronger decline. But it's unlikely that we've seen the final high if that happens. A stronger pullback would be good for a trade but only a trade. A drop back below price-level S/R near 3367 would be bearish, which would be confirmed with a drop below this morning's low near 3346. In the meantime the bulls have done nothing wrong.

Nasdaq-100, NDX, 60-min chart

A similar 5-wave move up from August, shown on the NDX daily chart, is shown on the SPX chart. It has a tighter rising wedge pattern because of the relatively small 4th wave correction (the pullback off the October 30th high). The top of the wedge is currently near 1793 and will be near 1800 by mid-week next week. So that gives us a potential target zone for the rally. On the weekly chart (not shown) I have a price projection to about 1830 so that will be the upside target if the bulls blast through 1800. Most are now expecting the market to press higher into the end of the year but I can't help but wonder if most are going to be very disappointed with what the market gives them instead. Respect the upside but worry about the downside.

S&P 500, SPX, Daily chart

Key Levels for SPX:
- bullish above 1750
- bearish below 1730

The DOW has been struggling at the trend line along the highs from August-September, currently near 15778, and just missed tagging the top of its up-channel from April-May on November 7th. But it was able to tag the top of its channel today at 15820. The risk now is that the rally is complete and we'll see the market start back down. But I've drawn a trend line along the highs on October 30th and November 7th, which could be the top of a small rising wedge pattern to finish its rally, and that trend line will be near 15890 by the end of the week. Perhaps we'll see a small throw-over above the line to complete its rally. With the waning momentum it's hard to bet on much more of a rally from here but we also know the buying keeps coming anyway. Again, respect the potentially bearish setup here if you're playing the long side. As for the bears, patience, your day will come. A break below this morning's low at 15672 would be the green light for the bears.

Dow Industrials, INDU, Daily chart

Key Levels for DOW:
- bullish above 15,820
- bearish below 15,672

Last Thursday's decline for the RUT found support at its uptrend line from November-June (log price scale) and just above its 50-dma. Today's rally, especially with the jam higher into the close, has it now back above its 20-dma near 1107. The pattern supports the idea that we'll see another leg up to the top of its rising wedge pattern, which is the trend line along the highs from September 2012 - July 2013, currently near 1139. A throw-over finish by mid-week next week could see the RUT ring the bell at 1150. The pattern stays bullish as long as this morning's low at 1095 is not broken.

Russell-2000, RUT, Daily chart

Key Levels for RUT:
- bullish above 1110
- bearish below 1095

On November 4th the TRAN had closed above the top of its up-channel from June but dropped back inside the channel the next day. It again closed above the channel today with a minor new high but it's pushing higher with a significant bearish divergence against the highs since October 28th. It could continue to press higher but it's a risky place for bulls.

Transportation Index, TRAN, Daily chart

The U.S. dollar almost made it up to its 200-dma last week, now near 81.82, after pushing above its 50-dma. I show a steeper pullback before continuing higher but I wouldn't be surprised to see the 50-dma, now near 80.54, act as support. The next big test for dollar bulls will be the 200-dma and the broken uptrend line from August 2011 - February 2013, currently near 81.90. A rally above 82.00 would be more bullish for the dollar.

U.S. Dollar contract, DX, Daily chart

The dollar's strength has been putting the metals and other commodities under pressure and gold now looks like it could break support at its uptrend line from June-October. But that trend line is acting as support at the moment and as long as the October 15th low at 1251 is not broken there remains the possibility for a stronger rally leg to start from here. I consider it the less likely possibility but it will be the price action over the next couple of days that should answer the question as to whether support is going to hold or not.

Gold continuous contract, GC, Daily chart

There are two other commodity-related charts that I want to show because it highlights some of the disconnect in the current stock market, which is of course more concerned with the Fed's constant injection of money than in such silly things as the health of our economy. Dr. Copper is telling us the patient (economy) is not healthy and typically the stock market reflects the same. But so far, not this time.

The price of copper is generally recognized as one of the better indicators of global economic health and right now it's sending out a distress signal. Today it broke below the September low at 3.19 and suggests lower prices dead ahead. This follows the break of its H&S neckline shown on the weekly chart below. The summer bounce was a back test of the neckline and it appears to be tipping back over now. The first downside target is 2.13 for two equal legs down from February 2011 and then potentially down to about 1.50 (the H&S price objective), which it last saw in March 2009. A collapse in the price of copper, if it comes, should be a strong signal that the stock market should soon follow.

Copper futures contract, HG, Weekly chart

From a broader perspective, the weekly chart of the commodity index is shown below. It has now broken below the August low and looks to be heading lower. It would have two equal legs down from 2011 near 103 so that's the downside potential for now. A lack of demand for commodities is driving prices lower so why isn't the stock market reflecting the same thing?

DJ UBS Commodity index, DJUBS, Weekly chart

The chart below is one I've shown before and it's has only gotten further out of whack. This compares SPX, which is the black price line, to the DJUBS Commodity index, which is the pink price line. They normally trade very closely aligned, which makes sense because both reflect the strength in the economy. Demand for commodities naturally affects the prices paid and when the economy slows so too does demand, which in turn drops the prices of the commodities. Basic Economics 101. The stock market typically leads a slowing economy by about 6 months as analysts see the slowing in consumer and business spending as predictors of slower profits for companies. The stock market should have been following the commodities index but instead the spread between the two has widened since 2011, thanks to the Fed money pouring into the stock market through the banks. The decline in the commodity index is real; the rally in the stock market is false. And when the stock market loses faith in the Fed's ability to hold it up I suspect that gap is going to be closed quickly (which means lower prices for both in the years ahead). As noted on the chart, the stock market rally from 2011 is a Fed-induced bubble and we all know how bubbles end (not well). It really isn't different this time.

SPX vs. DJUBS, Weekly chart

Oil is now getting close to support at its uptrend line from June 2012 - April 2013, currently near 91.80. It could be good for a big bounce as depicted on the chart below. I show a bounce into December back up to about 101 before turning back down in what would be a stronger decline early next year. It's the same story here -- lower demand (and higher production) is causing prices to drop. I don't anticipate that changing anytime soon.

Oil continuous contract, CL, Daily chart

As further evidence of a slowing economy affecting company earnings, the 3rd-quarter earnings season has been mixed at best. Worse, 4th-quarter guidance has been mostly negative. The last figure I saw last week, from Factset, stated 84% of the companies that have issued 4th-quarter guidance have issued negative guidance. The same picture was presented last quarter and that didn't stop the stock market from making new highs so the negative guidance for the 4th quarter does not mean the stock market will head lower from here. It is instead further evidence of the gap shown on the SPX vs. DJUBS chart and it will matter when it matters. Once it matters we'll start hearing the bulls howling in protest that the market shouldn't be selling off because the Fed won't let it. Think again is all I'll have to say.

Tomorrow's economic reports include unemployment claims, which are expected to show 330K new claims. This follows 336K in new claims the week prior and the 4-week average is running near 348K. How anyone could get excited about 204K new jobs in last week's payrolls number is beyond me. People are losing jobs faster than they're gaining them. But of course bad news is good news because it keeps the Fed's foot on the gas pedal.

Economic reports and Summary

New all-time highs for the DOW and SPX keeps the public interested in climbing aboard this northbound train. The trend is your friend and so far the bulls don't have to worry about the bend at the end. I see some more upside potential although not that much. The waning momentum (bearish divergence) at the new highs warns bulls to be careful. I've got us into the final 5th wave of the move up from August to complete the 5th wave of the move up from November 2012. The bearish divergence fits this wave count. The short-term pattern supports higher prices but the longer-term pattern suggests caution by those chasing the market higher. We could end up with a nasty downside surprise at any time.

The rest of the week might go quiet on us as we finish up opex week. Trade carefully and don't rush any trades. This is a tricky spot.

Good luck and I'll be back with you next Wednesday.

Keene H. Little, CMT

In the end everything works out and if it doesn't work out, it is not the end. Old Indian Saying


New Option Plays

Industrial Goods & Services

by James Brown

Click here to email James Brown

Editor's Note:

In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these stocks may need to see a break past key support or resistance:

(bullish ideas)
TYL, KORS, SSYS, HSIC, ADP, WDC, MCD, CVS, WAG, ETN, ZMH, HAR, WCC, AYI, MAN, QCOM,



NEW DIRECTIONAL CALL PLAYS

Alliant Techsystems Inc. - ATK - close: 116.35 change: +2.42

Stop Loss: 113.90
Target(s): 120.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ATK is in the industrial goods sector. The company manufacturers products for the aerospace and defense industries. The company's last earnings report was bullish. ATK beat Wall Street's bottom line estimate by a wide margin and beat the revenue estimate. Management then raised their guidance.

You could certainly argue that ATK is overbought with a multi-week rally but thus far the momentum does not seem to be slowing down. The stock does have potential resistance at its 2007 highs in the $120.50-121.00 zone. I am setting our target at $120.00. More aggressive traders could aim higher. Use a trigger at $116.55.

FYI: ATK will begin trading ex-dividend on November 18th, 2013. The quarterly cash dividend should be 26 cents.

Trigger @ 116.55

- Suggested Positions -

Buy the DEC $120 call (ATK1322L120) current ask $1.70

Annotated Chart:

Entry on November -- at $---.--
Average Daily Volume = 321 thousand
Listed on November 13, 2013


United Parcel Service - UPS - close: 101.04 change: +1.22

Stop Loss: 98.45
Target(s): 108.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
UPS is in the services sector. The company provides package delivery and transportation logistics around the globe. Wall Street seems to be growing more optimistic about the upcoming holiday shopping season and expectations are it will be bullish for the delivery companies like UPS and FDX. Shares of UPS have been consolidating sideways the last few days under round-number resistance near the $100 mark. Today's session marks a bullish breakout past resistance and a new all-time high.

I am suggesting a trigger to buy calls at $101.25. More nimble traders may want to consider waiting for a potential dip near $100.50 instead. If triggered our multi-week target is $108.00.

Trigger @ 101.25

- Suggested Positions -

buy the 2014 Jan $105 call (UPS1418a105) current ask $0.76

Annotated Chart:

Entry on November -- at $---.--
Average Daily Volume = 3.8 million
Listed on November 13, 2013



In Play Updates and Reviews

DDD Hits Our Target

by James Brown

Click here to email James Brown

Editor's Note:

The big cap indices like the S&P 500 are breaking out to new all-time highs. The Russell 2000 delivered a strong gain but no new highs today.

DDD hit our exit target and we closed our STZ trade today. The DDD option doubled and the STZ option tripled in value.

Elsewhere ANDE hit our entry trigger. I have adjusted a few stop losses tonight.


Current Portfolio:


CALL Play Updates

The Andersons, Inc. - ANDE - close: 82.67 change: +2.47

Stop Loss: 78.40
Target(s): 88.00
Current Option Gain/Loss: + 3.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
ANDE continues to show relative strength with a +3.0% gain on Wednesday. The stock has broken out to new all-time highs and hit our trigger to buy calls at $81.10.

Earlier Comments:
FYI: The Point & Figure chart for ANDE is bullish with an $89 target. NOTE: I am suggesting we keep our position size small. ANDE does not see a lot of volume in its stock or its options. The option spreads are a little wide.

*small positions* - Suggested Positions -

Long 2014 Mar $85 call (ANDE1421C85) entry $3.85*
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on November 13 at $81.10
Average Daily Volume = 117 thousand
Listed on November 12, 2013


Aon Plc. - AON - close: 80.17 change: -0.40

Stop Loss: 78.75
Target(s): 85.00
Current Option Gain/Loss: -20.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
Shares of AON saw some volatility this morning as traders reacted to news that AON had been downgraded to a "neutral" before the opening bell. AON spiked down to $79.15 but quickly rebounded and spent the rest of the day hovering near the $80.00 mark. I am raising our stop loss to $78.75.

- Suggested Positions -

Long 2014 Jan $82.50 call (AON1418a82.5) entry $1.70

11/13/13 new stop loss @ 78.75

Entry on November 08 at $80.50
Average Daily Volume = 2.3 million
Listed on November 06, 2013


Cardinal Health, Inc. - CAH - close: 63.93 change: +0.93

Stop Loss: 61.40
Target(s): 67.50
Current Option Gain/Loss: +36.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
After almost two days of trading sideways shares of CH resumed its up trend. The stock outpaced the major indices with a +1.47% gain. Bear in mind that the $65.00 level could be potential round-number resistance and CAH might see a pullback. Look for support near $62.00. I am raising our stop loss up to $61.40.

- Suggested Positions -

Long 2014 Jan $65 call (CAH1418a65) entry $0.84

11/13/13 new stop loss @ 61.40

Entry on November 11 at $62.50
Average Daily Volume = 3.8 million
Listed on November 09, 2013


Costco Wholesale - COST - close: 123.17 change: +1.03

Stop Loss: 119.40
Target(s): 129.00
Current Option Gain/Loss: + 78.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
COST is looking healthier as traders buy the dip near its rising 10-dma again. Shares look ready to re-challenge the $125.00 level soon. More conservative traders might want to raise their stop loss. COST could be a little volatile tomorrow as the market reacts to retail giant Wal-Mart's (WMT) earnings report expected out tomorrow morning before the opening bell.

- Suggested Positions -

Long 2014 Jan $125 call (COST1418a125) entry $1.30

11/09/13 new stop loss @ $119.40

Entry on November 06 at $120.50
Average Daily Volume = 1.9 million
Listed on November 02, 2013


Cognizant Technology - CTSH - close: 92.83 change: +1.18

Stop Loss: 89.25
Target(s): 99.00
Current Option Gain/Loss: +23.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
The rally in CTSH continues with another new record high today. I don't see any changes from my prior comments although traders looking for an entry point may want to wait for a new dip.

Our target is $99.00. More aggressive traders may want to aim higher. The Point & Figure chart for CTSH is bullish with a $107 target.

- Suggested Positions -

Long 2014 Jan $95 call (CTSH1418a95) entry $2.15

Entry on November 12 at $91.25
Average Daily Volume = 2.1 million
Listed on November 11, 2013


GNC Holdings - GNC - close: 59.70 change: +0.64

Stop Loss: 57.95
Target(s): 64.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
GNC is still inching higher but it can't seem to breakout past resistance near $60.00, at least not yet.

Currently our plan is unchanged with a suggested trigger to buy calls at $60.50.

Trigger @ 60.50

- Suggested Positions -

Buy the DEC $60 call (GNC1322L60) current ask $1.75

Entry on November -- at $---.--
Average Daily Volume = 1.5 million
Listed on November 05, 2013


Lockheed Martin - LMT - close: 137.26 change: -0.03

Stop Loss: 134.90
Target(s): 148.50
Current Option Gain/Loss: -11.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
LMT endured a little profit taking today. Shares briefly traded below their 10-dma before bouncing back. The stock closed virtually unchanged for the session, which doesn't inspire any confidence with the market hitting new highs. I am raising our stop loss up to $134.90.

I would not be surprised to see LMT paused at the $140 level, which might be temporary round-number resistance.

- Suggested Positions -

Long 2014 Jan $140 call (LMT1418a140) entry $2.20

11/13/13 new stop loss @ 134.90

Entry on November 07 at $137.25
Average Daily Volume = 1.5 million
Listed on November 06, 2013


Pall Corp. - PLL - close: 82.96 change: +1.09

Stop Loss: 79.75
Target(s): 86.00
Current Option Gain/Loss: +18.1%
Time Frame: Exit PRIOR to earnings on Nov. 26th
New Positions: see below

Comments:
PLL has been sleepwalking sideways for two days but shares finally woke up today. The stock added +1.33% and set a new closing high.

Earlier Comments:
Our target is $86.00. However, we will plan to exit prior to PLL's earnings report in late November (not date set yet). FYI: The Point & Figure chart for PLL is bullish with a long-term $113 target.

- Suggested Positions -

Long DEC $85 call (PLL1321L85) entry $1.10

11/06/13 new stop loss @ 79.75

Entry on October 28 at $80.50
Average Daily Volume = 551 thousand
Listed on October 23, 2013


SPX Corp. - SPW - close: 94.04 change: -0.09

Stop Loss: 91.75
Target(s): 99.00
Current Option Gain/Loss: -19.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
SPW delivered a disappointing session with shares drifting sideways. I don't see any changes from my prior comments. Traders may want to wait for a rally above yesterday's high (94.64) before initiating new positions.

FYI: The Point & Figure chart for SPW is bullish with a $113 target.

- Suggested Positions -

Long DEC $95 call (SPW1322L95) entry $2.30

Entry on November 11 at $94.25
Average Daily Volume = 304 thousand
Listed on November 09, 2013


PUT Play Updates

Equinix, Inc. - EQIX - close: 157.83 change: +2.65

Stop Loss: 160.55
Target(s): 150.50
Current Option Gain/Loss: - 6.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
I am urging caution here. EQIX dipped to a new low and then reversed. Today's session (+1.7%) has created a bullish engulfing candlestick reversal pattern. The stock should still see resistance near $160 and its 10-dma but the risk for put holders just increased. I am lowering our stop loss down to $160.55.

Earlier Comments:
Please note that I am suggesting small positions to limit our risk. The most recent data listed short interest at 28% of the relatively small 39.0 million share float. That raises the risk of a short squeeze. FYI: The Point & Figure chart for EQIX is bearish with a $142 target.

*small positions* - Suggested Positions -

Long DEC $150 PUT (EQIX1322X150) entry $3.15*
11/13/13 new stop loss @ $160.55
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on November 08 at $159.00
Average Daily Volume = 1.1 million
Listed on November 07, 2013


SPDR Gold ETF - GLD - close: 122.85 change: +0.40

Stop Loss: 124.25
Target(s): 115.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
It was a relatively quiet day for the GLD. Shares did bounce but today's session created an "inside day", which can suggest investor indecision. There is no change from my prior comments.

Traders may want to limit their position size to limit risk.

I am suggesting a trigger to buy puts at $121.00. If triggered our target is $115.50. More aggressive traders may want to aim lower since the Point & Figure chart for GLD is bearish with a $110 target.

Trigger @ 121.00

- Suggested Positions -

Buy the 2014 Jan $115 PUT (GLD1418m115)

Entry on November -- at $---.--
Average Daily Volume = 7.0 million
Listed on November 12, 2013


Green Mountain Coffee Roasters - GMCR - close: 60.67 change: +0.85

Stop Loss: 61.00
Target(s): 51.50
Current Option Gain/Loss: -30.8%
Time Frame: Exit PRIOR to earnings on Nov. 20th
New Positions: see below

Comments:
Warning! Our bearish GMCR trade could be in trouble. The stock gapped down this morning and hit new multi-month lows only to sharply rebound higher. Not only that but shares outperformed the broader market with a +1.4% gain. Today's session has created a bearish engulfing candlestick reversal pattern.

More conservative traders may want to abandon ship immediately. I am lowering our stop loss down to $61.00.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk. The most recent data listed short interest at more than 40% of the 130 million share float. That does raise the risk of a short squeeze if the market bounces. Our target is $51.50.

*small positions* - Suggested Positions -

Long Dec $55 PUT (GMCR1322x55) entry $4.22

11/13/13 warning! GMCR has produced a potential bullish reversal pattern. Traders might want to exit immediately. New stop loss @ 61.00

Entry on November 07 at $58.25
Average Daily Volume = 4.7 million
Listed on November 07, 2013


Garmin Ltd. - GRMN - close: 45.89 change: +0.04

Stop Loss: 48.05
Target(s): 43.50
Current Option Gain/Loss: + 4.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
GRMN eked out a very small gain. The stock continues to underperform the broader market. Yet I am not suggesting new positions at this time. We will adjust our stop loss down to $48.05.

Earlier Comments:
I do consider this an aggressive trade. GRMN has obviously been volatile the last couple of days. Plus the most recent data listed short interest at 13% of the 121 million share float.

Our target is $43.50. At this point GRMN should be nearing significant support in the $43.00 area and we might switch directions and buy calls.

*Small Positions!* - Suggested Positions -

Long DEC $45 PUT (GRMN1322X45) entry $1.08

11/13/13 new stop loss @ 48.05
11/06/13 new stop loss @ 48.55

Entry on November 01 at $46.82
Average Daily Volume = 1.2 million
Listed on October 31, 2013



Longer-Term Play Updates



Vanguard FTSE Europe ETF - VGK - close: 56.26 change: +0.24

Stop Loss: 53.90
Target(s): Sell half @ $58.00, sell the rest at $63.00
Current Option Gain/Loss: +33.3%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
The major European markets were down almost across the board today. Yet that didn't stop the VGK. The ETF did gap lower in reaction to trading overseas but the ETF rebounded to close up on the session. There is still short-term technical resistance at the 10-dma.

Earlier Comments:
Don't forget that we have two exit targets for this trade! More conservative traders could lock in gains now with our option up +94%.

We are taking a multi-month time frame with this trade. FYI: The Point & Figure chart for VGK is bullish with a $63 target.

- Suggested Positions -

Long 2014 Mar $55 call (VGK1422C55) entry $1.80*

10/22/13 Strategy Update: Plan to exit half @ $58.00 and exit the rest at $63.00. New stop loss @ 53.90
10/19/13 new stop loss @ 52.75
09/11/13 trade opens. VGK @ 53.60
*option entry @ 1.80 is an estimate. Ask closed at $1.75 yesterday
09/10/13 entry trigger met. open positions tomorrow.
09/10/13 new stop loss @ 50.95
08/24/13 adjust the option strike from 2013 Dec $55 to $2014 Mar $55.

Entry on September 11 at $---.--
Average Daily Volume = 3.0 million
Listed on August 10, 2013


CLOSED BULLISH PLAYS

3D Systems - DDD - close: 78.12 change: +0.18

Stop Loss: 73.25
Target(s): 79.00
Current Option Gain/Loss: +125.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
Target achieved. DDD rallied up to $79.33 before paring its gains. Our exit target was hit at $79.00.

*small positions* - Suggested Positions -

Long DEC $75 call (DDD1322L75) entry $3.20 exit $7.20 (+125.0%)

11/13/13 target hit at $79.00
11/12/13 raise the exit target to $79.00, was 78.50
11/12/13 new stop loss @ 73.25

chart:

Entry on November 11 at $71.50
Average Daily Volume = 4.2 million
Listed on November 09, 2013


Constellation Brands - STZ - close: 67.30 change: +0.26

Stop Loss: 64.75
Target(s): 68.50
Current Option Gain/Loss: +240.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
Traders bought the dip again and STZ closed at a new high. Our plan was to exit positions today at the closing bell to lock in gains before our November options expired this weekend.

- Suggested Positions -

Long NOV $62.50 call (STZ1316k62.5) entry $1.38 exit $4.70 (+240.5%)

11/13/13 planned exit
11/12/13 new stop loss @ 65.95, prepare to exit positions tomorrow at the closing bell
11/07/13 new stop loss @ 64.75
11/06/13 new stop loss @ 64.25
11/05/13 new stop loss @ 63.85
10/30/13 new stop loss @ 63.40
10/29/13 new stop loss @ 63.25
10/28/13 adjust exit target to $68.50
10/22/13 new stop loss @ 61.90, readers may want to take profits now. Our option is up +84%.
10/16/13 new stop loss @ 59.75
10/11/13 trade opened on gap higher at $61.25,
trigger was $61.10

chart:

Entry on October 11 at $61.25
Average Daily Volume = 1.9 million
Listed on October 10, 2013