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Daily Newsletter, Saturday, 9/26/2015

Table of Contents

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

Market Wrap

Headline Overload

by Jim Brown

Click here to email Jim Brown

There was no shortage of headlines on Friday with John Boehner resigning, Xi Jinping at the White House, the Pope in New York, Volkswagen imploding, biotechs crashing and Janet Yellen having health issues.

Market Statistics

The markets got a heavy dose of news on Friday but none of it was particularly important to the market. The indexes opened higher with the Dow up +264 at the highs. The Dow and S&P traded sideways until mid afternoon when they rolled over to give back much of their gains. The Nasdaq did not wait for the afternoon. The opening print was the high of the day and the selling accelerated as the day progressed. The majority of the decline was the biotech sector dragging the Nasdaq lower.

The biotechs declined -5% on Friday and -11.56% for the week. The IBB ETF has 144 companies with 72% already in a bear market and 96% in correction or worse. The biotech index is -22% off its July highs.


The news broke just before the open that House Speaker John Boehner was resigning at the end of October and would leave Congress. The speculation was rampant on whether this would alter the odds of a government shutdown on October 1st or December 11th. Congress needs to vote on a continuing budget resolution before October or risk a shutdown. Currently a large number of congressmen and senators want to link a budget bill with defunding Planned Parenthood. President Obama has pledged to veto any bill with a defunding clause.

With Boehner announcing his resignation, it frees him to work with the democrats to get a clean bill passed and avoid a shutdown. However, it may only be a short-term bill because the debt ceiling battle will return again on December 11th. There are rumors that the House could pass a budget bill with an addendum saying they were going to bring up defunding again with the bigger debt ceiling battle in December. With Boehner's resignation, we may skip the October drama but face a bigger debate in December.

These events complicate the Fed's plans to hike rates. Yellen implied on Thursday there was still the potential for a hike in October or at least by December. The exact language was "Most of my colleagues and I anticipate that it will likely be appropriate to raise the target range for the federal funds rate sometime this year."

After the speech, she had to be helped from the stage after she became weak and paramedics were called. They later determined it was dehydration, heat and stress. Later she was seen having dinner with others and walking to her car alone to return to the airport. Apparently, there was nothing serious but any unexpected health issue with Yellen could throw the market into turmoil.

The president of China met with President Obama at the White House and while the public comments were cordial, the presentations were stiff and appeared to be forced. Reportedly they agreed to a cyber warfare truce but Obama said the equivalent of "talk is cheap let's see if there is any follow through."

Volkswagen is replacing officers daily in an effort to head off a terminal prosecution for criminal wrongdoing. Europe said it was going to impose tougher inspections on all automakers and the EPA in the U.S. was quick to notify automakers that it would also aggressively inspect vehicles to make sure they complied with emission rules.

President Obama is scheduled to meet with Putin at the U.N. meeting in New York and there are rumors he may also meet with Iranian officials in an effort to develop a strategy for Syria. The Ayatollah must be giddy with his newly found status as a world power.

There were plenty of headlines to keep investors distracted including an update for Q2 GDP. The headline number was revised up again from 3.7% to 3.92%. That is up from the initial estimate at 2.3% and the final Q1 growth rate at +0.64%. The upward revisions were due to increased consumer spending on services, business investment and residential investment. Increased consumer spending added +2.4% to growth. That was up from +1.2% in the prior quarter. Final sales rose +3.9% compared to a -0.2% decline in Q1. Apparently, the savings from cheaper gasoline is finally finding its way into the economy in the form of spending.

Corporate profits rose +3.5% after falling -5.8% in Q1. Inventory growth also added to the overall number but those high inventories will also detract from growth in future quarters.

Q2 was a strong quarter and significantly out of context with the prior two quarters. However, the Atlanta Fed is only forecasting 1.4% growth for Q3 compared to analyst forecasts of 2.5%. The economy is still in a muddle through period of economic volatility and has not yet found any real traction.



The final revision of Consumer Sentiment for September rose slightly from the initial report. The headline number inched up from 85.7 to 87.2 but was still well off the recent highs at 98.1 in January. This was the third consecutive monthly decline and a 12-month low. Volatility in the equity markets was blamed since equity prices in retirement accounts are directly related to how consumers feel about their finances.

The present conditions component declined from 105.1 to 101.2 and the expectations component declined from 83.4 to 78.2. Roughly 43% of respondents expect financial conditions to deteriorate and an equal 43% expect conditions to improve. Twenty-seven percent expect rising unemployment while 19% expect jobs to improve.


The calendar for next week is heavily weighted to payrolls for September. The ADP Employment on Wednesday is expected to be flat at +191,000. The Nonfarm Payrolls on Friday are expected to rise slightly from +173,000 to +203,000.

Multiple analysts have said that any Nonfarm number over 225,000 with a big upward revision to August will guarantee a rate hike in October. For the prior two months, the revisions have been positive.

Numerous analysts believe the Fed made a mistake not hiking in September and now the Fed has realized it. Yellen's speech on Thursday was somewhat hawkish as though she was trying to warn that October was back on the table.

The ISM Manufacturing on Thursday is a national report and it has been in a downtrend since last October when it topped at 57.9 and has declined to 51.1 in August. If this manufacturing index falls into contraction below 50 it would severely crimp the Fed's plans to hike in 2015.

There is an abnormally high number of Fed heads speaking this week. The market is going to be totally confused about Fed intentions by the end of the week.


There were no split announcements last week. Full Stock Split Calendar


The markets would have been a lot worse on Friday were it not for Dow component Nike (NKE). Shares rallied +9% to $125 after they reported a 23% rise in earnings to $1.34 per share, up from $1.09 in the comparison quarter. Analysts were expecting $1.19. Revenue of $8.4 billion beat estimates for $8.2 billion. The company said it sold more higher-margin shoes and other apparel. Sales of footwear in China rose +36% and apparel increased +22% and erased the fears that Chinese consumers were cutting back on purchases. Their future orders, a proxy for future earnings, rose +17%. The spike in shares put Nike at a forward PE of 28 and they may struggle to add to their gains without a pause for profit taking. Nike's $10.21 gain added roughly 79 points to the Dow or 70% of the Dow's gain.

Canaccord Genuity, Stifel, FBR Capital Markets, Cowen and Jefferies hiked target prices on Nike.


Jabil Circuit (JBL) shares rallied +12% after reporting earnings of 48 cents that beat estimates for 35 cents. Revenues of $4.68 billion beat estimates for $4.59 billion. Revenues were up +15.5% because the company makes phone casings for Apple. Electronics manufacturing services revenue rose to +59% to $2.8 billion. Diversified manufacturing services surged +47% to 41% of the total at $1.19 billion. Jabil had $914 million in cash at the end of the quarter with free cash flow at $293 million. The company guided for the current quarter to be in the range of 72-88 cents with 16 cents of charges. That compares to analyst estimates for 51 cents. Even with the charges that will be another big beat.


Dow component Caterpillar (CAT) was downgraded again with William Blair doing the honors on Friday. The analyst said "there are too many headwinds to ignore" and that downside risk outweighs upside potential. On Thursday, Caterpillar warned that revenue would be $1 billion below prior forecasts, 2016 sales would also decline and it would reduce its workforce by another 4,000-5,000 employees. Blair cut CAT from outperform to neutral and dropped the price target from $90 to $60. The analyst said weakness from China, Brazil, the energy sector and the commodity sector would last at least until next year. Caterpillar's main focus now is "managing the downturn" and it will be "challenging" according to Blair.


This was the first weekend of the Apple iPhone 6s sales. Social app company Foursquare said Apple will sell between 13-15 million phones. The company said Apple stores registered a 360% increase in customer traffic over the last week. Compared to the September 2014 release of the 6 and 6+ models with a 330% increase in foot traffic. Apple sold 10 million phones in that weekend. Most analysts are expecting 12-13 million phones to be sold.

The company tracked foot traffic in prior launches and uses that to predict sales. In 2012 traffic increased 2.4 times and in 2013 3.5 times the prior 12-week average. Foursquare has 50 million users that "check in" to businesses and other locations. They currently track traffic at 65 million businesses in 100-plus countries.

There were long lines outside all the Apple stores on Friday morning. There were some analysts questioning whether Apple could keep up with initial demand. Some colors like the rose gold (sparkling pink) were sold out very early. However, some trackers said the lines at some of the regional stores were a lot shorter than the lines at major stores in New York and California. Reston VA only had about 75 people and that was 25% of the year ago numbers. Most (87%) planned on buying the iPhone 6S Plus, which is a high profit item for Apple. Apple shares declined fractionally on the crowd news. As of Sept 15th, there were 92.636 million Apple shares short. That was the highest number since October 31st, 2014 at 99.5 million.


Apple component makers had a good day. Those include Avago (AVGO), Qualcomm (QCOM), Texas Instruments (TXN) and Skyworks Solutions (SWKS). Cirrus Logic (CRUS) spiked 15% after an iFixit tear-down showed Apple used its chips in the phones.


Shares of the CME Group (CME) rallied after the company announced a joint venture to explore opportunities with the China Foreign Exchange Trade System (CFETS). That is the major trading platform and pricing center for RMB and related products. The pair will participate in the joint development of offshore RMB products. The CME Group will also facilitate its customers trading of Chinese interbank products and CFETS will do the same for CME products. This is a major development for CME and equates to the expanding of China's currency market to global traders. Obviously, it has not happened yet but this is the first step.


Galapagos NV (GLPG) shares fell -27% after AbbVie (ABBV) said it was scrapping a deal to license a rheumatoid arthritis drug from GLPG and use one of its own instead. The AbbVie drug ABT-494 is in mid-stage studies. If it succeeds it will save AbbVie more than $1 billion a year it would have had to pay to GLPG for licensing their drug. Both drugs are a new class of medicine that blocks an inflammation-causing enzyme known as JAK1. Galapagos said it was already in talks with more than half a dozen companies about licensing filgotinib and advancing it into late stage studies. The news did not help their stock.


Coca-Cola (KO) was started with a buy rating and $45 price target at Deutsche Bank. Shares rose 1%.

3M (MMM) was upgraded from neutral to outperform at Credit Suisse with a price target of $155. The consensus target is $159.50.

Bed Bath & Beyond (BBBY) was upgraded from underperform to market perform by Telsey Advisory.

Nomura upgraded Cyberark Software (CYBR) from neutral to buy with a $62 price target.

PayPal (PYPL) was started with a buy rating at Canaccord with a $43 target.

Swift Transportation (SWFT) warned on earnings. They are now expecting 30-33 cents for the current quarter with consensus at 44 cents. They are predicting 48-54 cents for Q4 and analysts were expecting 59 cents. Full year guidance was cut from $1.64-$1.74 to $1.43-$1.52 and analysts were expecting $1.69. Shares fell -5% on the lowered guidance.

Sequenom (SQNM) warned that revenue for 2015 is now expected to be in the range of $127-$130 million. Analysts were expecting $144.9 million. Shares fell -7% on the news.

Frac sand provider Emerge Energy Services (EMES) was cut from hold to sell at Piper Jaffray with a price target of $8. Shares were already lower after the company withdrew its expected distribution guidance due to "difficult" market conditions. Emerge is a limited partnership and removing distribution guidance is the kiss of death. The company said it would not release guidance for the rest of the year.


Blackberry (BBRY) reported a loss of -24 cents compared to -39 cents in the year ago quarter. However, the adjusted loss of -13 cents was still almost double the consensus estimate for a -7 cent loss. Revenue was $490 million compared to $916 million in the year ago quarter. Analysts were expecting $622 million. Hardware contributed 41% of the revenue, services 43% and 15% from software and technology licensing. They sold 800,000 phones during the quarter. Free cash flow was $223 million. Long-term debt declined from $1.707 million to $1.322 million. The company still expects to be profitable in 2016. The Blackberry Enterprise Server, BES12, is becoming more widely accepted and could help turn the company back to profitability. However, shares closed at a 52-week low.


The earnings calendar for next week is light with only a couple big names. With the quarter ending on Wednesday, the real earnings parade will not begin until the following week.


Crude oil continued to hold over support at $44 despite negative news. There was another small decline in inventories of -1.9 million barrels but the fat lady is about to sing. Two weeks of unexpected declines should come to a halt soon.

Refinery utilization fell from 93.1% to 90.9% as the maintenance period kicks into gear. This should decline to 85-86% in the weeks ahead. Nearly 2.0 million barrels per day will be taken offline at the peak.

The bad news came from Iran. A top Iranian official said Iran was planning on increasing its oil sales by 500,000 bpd by late November or early December even before the western sanctions were expected to be removed. Ali Kardor said Iranian exports would grow by 1.0 million barrels per day by mid 2016. OPEC had not expected any additional exports to begin until Q2-2016.

The new exports would be to Asian nations with the most going to China. The Asian nations did not impose the same kind of sanctions as the western nations. China, India and South Korea still import about 1.0 mbpd even though the sanctions still exist. Iran currently produces about 3.0 mbpd with 2.0 mbpd consumed internally. Before the sanctions they produced about 4.0 mbpd.

Kardor expects only a $3-$4 drop in prices when Iran increases its exports. The official said he expects to talk to OPEC members at the December meeting about reducing their output to accommodate the additional Iranian oil in the market. Good luck with that. I doubt they will voluntarily agree to just cut production so Iran can earn more money to export terrorism in the Middle East.

The critical part for WTI prices will actually be the arrival of Iranian oil on the market. With current supply about 2.0 mbpd more than demand and global inventories rising about 25 million barrels a month there will have to be some involuntary production cuts soon. With Iran adding 500,000 bpd to start and increasing to 1.0 mbpd the high cost suppliers are going to be in serious pain.


Active rig counts declined by -4 to 838 and another decade low for the week ended on Friday. Oil rigs declined -4 to 640 and gas rigs fell -1 to 197. Miscellaneous rigs rose +1 to 1. The offshore rig count rose +2 to 33 and -29 rigs below year ago levels.


Markets

On Tuesday, I wrote that S&P 1,950 would be the level to watch to see if any rebound had legs. Apparently, there were no legs. On Wednesday and again on Friday the S&P stalled at the 1,950 level before declining significantly after both tests.

On Thursday, the S&P declined to support at 1,912 and rebounded immediately. On Thursday night, I thought we had a good chance of a decent move higher. That move appeared on Friday morning but it failed with the decline in the biotechs crushing the Nasdaq and dragging the S&P back into negative territory.


The S&P is now showing a potential failure of that 1,912 level for next week. The double test and failure of 1,950 on decent volume suggests there will be another test of 1,912 and it may not hold. On the daily chart the formation has turned into a continuation pattern and it should continue in the direction of the primary trend and that means a move lower.

Investors have become frustrated with dip buying not working and every decent rebound being sold on the slightest weakness. The historical trend for the week after September option expiration has added one more decline to the count. Now only five of the last 18 years have posted a gain.

Next week is not any better. The average decline is about 1.2% and there is nothing on the horizon to act as a catalyst to lift us out of our slump.

Q3 earnings are now expected to decline -4.5% and revenues -3.3%. More than 110 S&P 500 companies have warned or lowered guidance. Negative guidance announcements are now running 3.2 to 1 over positive announcements.


The Dow is a similar chart to the S&P except the 79-point jump from Nike's gain helped push it back over resistance at 16,335 at the open. The short covering in the other 29 stocks began to fade in the afternoon and the Dow fell back below the 16,335 level.

The Dow is stuck in the range between 16,030 and 16,666 while we wait for some headline to give us direction. Without a positive headline, the path of least resistance is down. Without some stock to give the Dow a 50-60 point spike every day the shorts will be loading up again.




The Nasdaq was crushed by the -11% biotech drop over the last week and -5% on Friday alone. If that sector does not find a bottom soon it will drag the Nasdaq back to critical support in the 4545-4605 range.

The majority of tech stocks are listless but still volatile. One-dollar gains are followed by $2 losses then repeat. Intel was upgraded on Friday and it managed a whopping 30-cent gain. More than 45% of the Nasdaq 100 stocks are in a bear market with losses of more than 20%.

The tech sector needs a leader. That can be the biotechs, chips, computers, software, etc, but somebody needs to lead. If Apple's iPhone sales are not incredibly strong on Monday we are going to see Apple's shares weaken and probably take the Nasdaq lower. The 4,635 level is key support and a break there targets 4,500.




The Russell 2000 is broken. The index is well below support at 1,150 and appears to be targeting 1,100. Should that fail the next support is 1,082. The small cap index has a lot of biotech stocks so the Russell is suffering the same fate as the Nasdaq. The problem is that the Russell 2000 is the sentiment index and right now, the sentiment is bearish.


With the next nine trading days typically bearish and every uptick being sold the outlook is negative. However, market lows are typically made in the first 10 trading days of October with strong rebounds through month end. This means investors with a longer time horizon should be making a shopping list for the first week of October. If we do get a retest of the August lows, we should be ready to profit from that dip.


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Random Thoughts


The AAII Sentiment Survey was barely changed in the week ended on Wednesday. The markets returned to the middle of their prior range and neutral sentiment rose as investors were undecided about the eventual direction.



The top ten global equity markets are suffering their biggest losses since 2008. Is this the start of something bigger or just a bump in the road?

USA - Dow -2,000 points, -10.9%
China - Shanghai -40%, Manufacturing PMI at 78-month low.
Japan - Nikkei -3,000 points, More QE ahead.
Germany - DAX -25%, auto scandal pushing it lower.
UK - FTSE -16%.
France - CAC-40 -18%, following the Greek debt path.
Brazil - Market down -12,000 points from peak.
Italy - Stocks down -15%, economic trouble coming.
India - Sensex down -4,000 points from its high.
Russia - RTS only down -10% but low oil prices crushing economy.

Ten Largest Economies Crashing


Murray Gunn, head of technical analysis at HSBC warned that the U.S. market is putting in a bigger top than eight years ago. Based on his analysis the Dow "could have put in an historic top, one that may well turn out to be more significant than the top in 2007." Colossal Market Top


Over the last 21 years the equity markets have averaged a low for the month in the first ten days of October and then closed the month at the highs. Early weakness as Q4 begins has proven to be a great buying opportunity. Over the last 21-year period October has risen to be the third strongest month of the year for the S&P and second best for the Nasdaq. October Trading Trends

October is Bear Killer Month


How many iCars will Apple sell? A team of analysts from Jefferies released a report saying Apple will probably sell 200,000 self driving electric cars that cost $55,000 on average in 2019. That will add $11 billion in revenue and $1.6 billion in profits. That will be just a drop in the proverbial bucket since Apple is expected to generate $244 billion in revenue for 2019 with $54 billion in profits. Apple iCar


The most popular Halloween costume this year turns the wearer into Donald Trump. The most popular piñata in Mexico is a caricature of Donald Trump. MaxWigs.com cannot keep its Donald Trump Deluxe wig in stock because the demand is so strong. Trump Deluxe


Sunday night at 10:47 PM ET there will be a "Blood Moon" eclipse. The moon will be low on the horizon and the earth's atmosphere will make the moon look red. This will be a rare "supermoon" eclipse. There have only been five since 1900. Those were in 1910, 1928, 1946, 1964 and 1982. The next one will be in 2033. Supermoon Eclipse



 

Enter passively and exit aggressively!

Jim Brown

Send Jim an email


"Yogi Berra top 50 Berra-isms from USA Today.

Berra-isms (colloquial expressions that lack logic) are now countless, and many of them are just attributed to Berra, even if he never actually said them. As he so perfectly put it: "I never said most of the things I said." Here are 50 of USA Today favorites.

1. When you come to a fork in the road, take it.

2. You can observe a lot by just watching.

3. It ain't over till it's over.

4. It's like deja vu all over again.

5. No one goes there nowadays, it's too crowded.

6. Baseball is 90% mental and the other half is physical.

7. A nickel ain't worth a dime anymore.

8. Always go to other people's funerals, otherwise they won't come to yours.

9. We made too many wrong mistakes.

10. Congratulations. I knew the record would stand until it was broken.

11. You better cut the pizza in four pieces because I'm not hungry enough to eat six.

12. You wouldn't have won if we'd beaten you.

13. I usually take a two-hour nap from one to four.

14. Never answer an anonymous letter.

15. Slump? I ain't in no slump… I just ain't hitting.

16. How can you think and hit at the same time?

17. The future ain't what it used to be.

18. I tell the kids, somebody's gotta win, somebody's gotta lose. Just don't fight about it. Just try to get better.

19. It gets late early out here.

20. If the people don't want to come out to the ballpark, nobody's going to stop them.

21. We have deep depth.

22. Pair up in threes.

23. Why buy good luggage, you only use it when you travel.

24. You've got to be very careful if you don't know where you are going, because you might not get there.

25. All pitchers are liars or crybabies.

26. Even Napoleon had his Watergate.

27. Bill Dickey is learning me his experience.

28. He hits from both sides of the plate. He's amphibious.

29. It was impossible to get a conversation going, everybody was talking too much.

30. I can see how he (Sandy Koufax) won twenty-five games. What I don't understand is how he lost five.

31. I don't know (if they were men or women fans running naked across the field). They had bags over their heads.

32. I'm a lucky guy and I'm happy to be with the Yankees. And I want to thank everyone for making this night necessary.

33. I'm not going to buy my kids an encyclopedia. Let them walk to school like I did.

34. In baseball, you don't know nothing.

35. I never blame myself when I'm not hitting. I just blame the bat and if it keeps up, I change bats. After all, if I know it isn't my fault that I'm not hitting, how can I get mad at myself?

36. I never said most of the things I said.

37. It ain't the heat, it's the humility.

38. If you ask me anything I don't know, I'm not going to answer.

39. I wish everybody had the drive he (Joe DiMaggio) had. He never did anything wrong on the field. I'd never seen him dive for a ball, everything was a chest-high catch, and he never walked off the field.

40. So I'm ugly. I never saw anyone hit with his face.

41. Take it with a grin of salt.

42. (On the 1973 Mets) We were overwhelming underdogs.

43. The towels were so thick there I could hardly close my suitcase.

44. Little League baseball is a very good thing because it keeps the parents off the streets.

45. Mickey Mantle was a very good golfer, but we weren't allowed to play golf during the season; only at spring training.

46. You don't have to swing hard to hit a home run. If you got the timing, it'll go.

47. I'm lucky. Usually you're dead to get your own museum, but I'm still alive to see mine.

48. If I didn't make it in baseball, I won't have made it workin'. I didn't like to work.

49. If the world were perfect, it wouldn't be.

50. A lot of guys go, 'Hey, Yog, say a Yogi-ism.' I tell 'em, 'I don't know any.' They want me to make one up. I don't make 'em up. I don't even know when I say it. They're the truth. And it is the truth. I don't know.




 

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Index Wrap

Biotech Blues

by Jim Brown

Click here to email Jim Brown

After a stunning 96% rally from the April 2014 low to the July 2015 highs, the Biotech sector is now in a bear market with a 22% decline from the highs.

The Ishares Nasdaq Biotechnology ETF (IBB) has 144 stocks. More than 72% are already in a bear market with declines of 20% or more and 96% are in a correction with declines of 10% or more. The Nasdaq was very dependent on the biotech sector for much of its recent gains and now its losses.


The Biotechnology Index is dramatically influenced by the larger stocks and until recently, they have held their gains. On a technical basis, the sector could see additional declines since we have barely scratched the surface on cashing out the gains made over the last year.


With capital gains season just ahead and the market showing the potential for further declines, we could see fund managers begin to take profits in the stocks they have held long term. Taking profits in the biotech stocks could cushion losses they have taken in other areas such as energy and commodities.

While I would like to buy the dip in the sector, I think it would be prudent to wait for a bottom to form. Portfolio managers typically use the early October period to restructure their portfolio and position themselves for a yearend rally. Be prepared for the biotechs to take the brunt of the selling.

The chip sector is also undergoing some distribution. With the outlook for PC sales declining on a monthly basis the outlook for chip stocks is fading. While tablets are taking the place of the PC the number of chips in a tablet is significantly less than those in a PC and associated hardware including video cards, memory and hard drives.

The Semiconductor Index ($SOX) retested the October 2014 lows at 545 during the August flash crash. Like the rest of the indexes, the rebound is fading and in the case of slowing demand, any retest of the low may fail.


With oil prices holding at $44 and diesel prices averaging $2.50 nationwide you would expect the Dow Transports to be in a positive trend. However, the slowing global economy is weighing on the shippers. FedEx just posted disappointing earnings and warned about the current quarter. The railroads are struggling over a decrease in the amount of coal being shipped and a drop in frac sand and well pipe being delivered. The slowdown in the energy sector has taken tens of thousands of railcars of sand out of the picture. Oil well pipe usage has declined by more than 60%.

Airlines are the only segment doing well but they cannot hold up the transportation sector on their own. The Dow Transports are down -16% from their highs and I would expect them to make new lows in the weeks ahead.


The S&P remains well over its long-term 200-week average at 1,722 but remains in correction territory. Many analysts believe the S&P could retest the 1,820 low from last October. The uptrend has been broken and the August low was not to a major support point.

Last week somebody bought 50,000 June $186 SPY puts for $11 each. That is roughly $55 million in a bearish position. This could be a hedge on a portfolio of up to $1 billion. It could also be a speculative bet that the global economy is going to continue to collapse and the August lows were just a preview of coming attractions. Lastly, it could be speculation by someone that knows of an impending global event, possibly a terrorist attack, that will knock our markets down as we saw after 9/11. You would have to be pretty confident to speculate that strongly on market direction regardless of the reason. Personally, I think it is probably portfolio insurance. With the long June strike, the premiums will bleed slowly and the owner can exit at the end of October if the historical end of year rally appears.

The SPY $186 strike equates to 1,860 on the S&P-500 and we closed at 1,931 on Friday. The $182 level on the SPY equates to 1,820 on the S&P and the target being discussed by many market technicians.



The NYSE Composite ($NYA) has collapsed farther than the big cap averages. The composite index is all the stocks on the NYSE and contains everything from the smallest capitalization biotech stock to the largest energy stock like Exxon.

The NYA declined to its 200-week average during the flash crash and did not rebound significantly. This index is broken and suggests we are going to see lower lows. If the 9,725 level breaks again I would expect to see a decline to 9,000.


The Russell 3000 has held up better than the NYSE Composite. This is the 3,000 largest stocks in the market and combines the Russell 1000 and the Russell 2000. The R3K is still about 80 points above the October 2014 low at 1,079 and that would be the target if further weakness appears over the next ten trading days.


On a purely technical basis, the various indexes appear to be predicting further weakness in the days ahead. The biotechs could drag the Nasdaq lower as fund managers take profits to offset losses in other areas.

I would continue to recommend creating a shopping list of stocks to buy on any decline that looks like a capitulation event. Typically, when these corrections appear they end with a capitulation event where everyone becomes frustrated and flushes their holdings. That is typically the bottom.

Enter passively and exit aggressively!

Jim Brown

Send Jim an email

 

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New Option Plays

A +4,000% Gain

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:

Bearish ideas: HCA, DGX, CVS, ARG, VMI, MHFI, ZBH, WHR




NEW DIRECTIONAL CALL PLAYS

ULTA Beauty - ULTA - close: 169.15 change: +1.14

Stop Loss: 164.40
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 900 thousand
Entry on September -- at $---.--
Listed on September 26, 2015
Time Frame: Exit PRIOR to November options expiration
New Positions: Yes, see below

Company Description

Trade Description:
Few stocks have done as well as ULTA over the last six years. ULTA is up more than +4,000% from the bear-market 2009 low. The stock has continued to show relative strength this year with a +32% gain in 2015.

ULTA is in the services sector. They are considered a specialty retailer. According to the company, "ULTA Beauty (NASDAQ: ULTA) is the largest beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin, hair care products and salon services. Since opening its first store 25 years ago, ULTA Beauty has grown to become the top national retailer providing All Things Beauty, All in One Place®. The Company offers more than 20,000 products from over 500 well-established and emerging beauty brands across all categories and price points, including ULTA Beauty's own private label. ULTA Beauty also offers a full-service salon in every store featuring hair, skin and brow services. ULTA Beauty is recognized for its commitment to personalized service, fun and inviting stores and its industry-leading ULTAmate Rewards loyalty program. As of August 1, 2015 ULTA Beauty operates 817 retail stores across 48 states and also distributes its products through its website, which includes a collection of tips, tutorials and social content. For more information, visit www.ulta.com."

There is a reason investors have lifted ULTA so high. That is because the company has continued to deliver strong earnings and revenue growth. ULTA has beaten Wall Street's estimates the last three quarters in a row on both the top and bottom line. Back in March ULTA reported their 2014 Q4 results with revenues up +20.7% and management raised guidance. In May this year ULTA reported their 2015 Q1 results with revenues up +21.6% and management raised their comparable store guidance.

ULTA's most recent quarter was August 27th. The company announced their Q2 results. Wall Street was looking for a profit of $1.12 per share on revenues of $870.4 million. ULTA delivered earnings of $1.15 per share. That's a +22% improvement from a year ago. Revenues were up +19.4% to $877 million. Comps came in better than expected +10.1%. Management raised their comparable store forecast again.

Mary Dillon, ULTA's Chief Executive Officer, commented on their last quarter,

"Strong traffic growth drove healthy comparable sales increases across stores, salon and e-commerce, while average ticket growth also contributed. An exciting pipeline of new products, combined with increasing effectiveness of our marketing strategies, drove market share gains across all categories. In light of the excellent performance of the business in the first half of the year, we are raising our outlook for the full year and now expect to achieve earnings per share growth in the high teens."
Investors have been buying the dips and ULTA's bullish trend of higher lows has pushed the stock back toward its highs. The point & figure chart is bullish and forecasting at $187 target. Currently shares are hovering just below resistance at $170.00. Tonight we are suggesting a trigger to buy calls at $170.50.

I am suggesting small positions to limit risk. The volatility in ULTA during the market's August correction was shocking. The stock plunged from $173 to $120 in four days during the market's decline. That's a little crazy. We can't predict that kind of volatility so I suggest limiting your exposure.

Trigger @ $170.50 *small positions*

- Suggested Positions -

Buy the NOV $175 CALL (ULTA151120C175) current ask $4.20
option price is a current quote and not a suggested entry price.

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike

Daily Chart:

Weekly Chart:



In Play Updates and Reviews

Biotech Weakness Weighs On The Market

by James Brown

Click here to email James Brown

Editor's Note:

Biotechs underperformed again on Friday. It has been a terrible week for the group with an -13% plunge in the last five trading days. Friday's nearly five percent drop weighed heavily on the NASDAQ and the Russell 2000 index.

The S&P 500 managed to close virtually unchanged while the Dow Industrials rallied on Nike's earnings report.

Our new put play on LH was triggered.


Current Portfolio:


CALL Play Updates

The Walt Disney Co. - DIS - close: 100.30 change: -0.32

Stop Loss: $98.85
Target(s): To Be Determined
Current Option Gain/Loss: -77.8%
Average Daily Volume = 8.5 million
Entry on August 27 at $101.35
Listed on August 24, 2015
Time Frame: Exit PRIOR to October option expiration
New Positions: see below

Comments:
09/26/15: The stock market's early gains faded again on Friday and DIS followed suit. Shares traded below round-number support at $100.00 for the second day in a row but managed to close above this level.

I'm worried that if the market continues to sink we will see DIS hit our stop loss at $98.85.

We only have three weeks left on our October options.

No new positions at this time.

Trade Description: August 24, 2015:
We are bringing DIS back. The sell-off from its August high has been extreme. At its low today near $90.00 DIS was down -26% from its high. The retreat offers a lot of opportunity. Jump to the bottom of this play update for our entry point strategy.

Disney reported earnings on August 4th and beat the street with earnings of $1.45 compared to estimates for $1.42. The very next day shares fell -$11.00 to $110. The sell-off in DIS stock has continued thanks to a global market meltdown.

We think this pullback in the stock is way overdone. Disney posted $13.1 billion in revenue compared to estimates for $13.2 billion. That minor miss was not the reason for the huge decline in the stock. Disney said revenues in its cable products rose +5% BUT they had seen some pressure from online streaming. Subscription growth to the ESPN cable bundle had slowed, not declined, just slowed.

There are multiple reasons. There are no major sporting events this summer like the World Cup, Olympics, etc. Some consumers are cutting the cord to cable because they are now getting their TV programming from Netflix, Hulu, etc. Cable is expensive compared to the streaming options. The drop off in ESPN growth is not related specifically to Disney. CEO Bob Iger said subscriptions would pick back up in 2016 and expand sharply in 2017 thanks to a flood of sporting events due to come online next year.

Disney has already purchased the rights to nearly every sporting event available in the next five years but the old contracts with the prior rights holders have yet to expire. As those contracts expire and the new Disney contracts begin the content on ESPN will surge.

This slowdown in ESPN growth should be ignored. This is just a small part of the Disney empire and everything else is growing like crazy. Parks and resorts revenue rose +4%. Consumer products revenue rose +6% thanks to Frozen, Avengers and Star Wars merchandise. The only weak spot was interactive gaming, which declined -$58 million to $208 million. Disney expects that to rebound in Q4 as new games are released and holiday shopping begins.

The real key here is the theme parks, cruises and most of all the movie franchises. They have five Star Wars movies in the pipeline and the one opening this December is expected to gross $2.2 billion and provide Disney with more than $1 billion in profits. This is just one of the blockbusters they have scheduled.

Analysts are claiming Disney shares could add 25% before the end of December because of their strong movie schedule and coming attractions. The Avengers movie in April was a hit and added greatly to their Q2 earnings. However, that will just be a drop in the bucket compared to the money they are going to make on the Star Wars reboot in December. That is the first of five Star Wars movies on the calendar. Remember, Disney now has Marvel, Pixar and Star Wars (Lucasfilm) all under the same roof.

Disney Movie Schedule (partial)

Dec. 18, 2015 - "Star Wars: Episode VII - The Force Awakens"
2016 - "The Incredibles 2"
2016 - "Frozen" sequel
April 29, 2016 - "Captain America: Civil War"
June 17, 2016 - "Finding Dory"
Dec. 16, 2016 - "Star Wars Anthology: Rogue One"
May 26, 2017 - "Star Wars: Episode VIII"
June 16, 2017 - "Toy Story 4"
Late 2017 - "Thor: Ragnarok"
May 4, 2018 - "Avengers: Infinity War - Part I"
2018 - "Untitled Star Wars Anthology Project"
May 3, 2019 - "Avengers: Infinity War - Part II"
2019 - "Star Wars: Episode IX"

The four-week drop in DIS' stock has sent shares back to their 2015 lows. During the panic this morning investors bought the dip at round-number support near $90.00 (FYI: the February 2015 low was $90.06). When the market bounced DIS rallied more than +10% only to stall at round-number resistance at $100.00. DIS closed right in the middle of this $90-100 trading range today.

We want to be ready no matter what direction DIS moves. That's why we are listing two different entry point strategies.

Our first plan is to buy calls on a dip at $91.00 should DIS dip toward today's low. The second entry trigger is to buy calls on a breakout at $101.00 since the $100 level was resistance.

We are not listing a stop loss tonight. The market volatility has been extreme. The intraday moves in the market are a little ridiculous and nearly impossible to trade around if you're not glued to your screen and day trading. You can manage your risk by limiting your position size. We'll add a stop loss once the dust settles, likely in a couple of days.

- Suggested Positions -

Long OCT $105 CALL (DIS151016C105) entry $2.52

09/19/15 new stop loss @ 98.85
09/12/15 a breakout past resistance near $105 could be a new bullish entry point.
09/09/15 caution - DIS produced a bearish engulfing candlestick reversal pattern
08/27/15 triggered on gap open at $101.35, suggested entry was $101.00
Option Format: symbol-year-month-day-call-strike

chart:


Electronic Arts - EA - close: 69.49 change: +0.68

Stop Loss: $67.35
Target(s): To Be Determined
Current Option Gain/Loss: -21.9%
Average Daily Volume = 3.1 million
Entry on September 17 at $70.75
Listed on September 16, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
09/26/15: EA displayed relative strength on Friday with a +0.98% gain. Unfortunately the stock failed to close above resistance near $70.00 and its 50-dma. The short-term (bearish) trend of lower highs is still intact.

No new positions at this time.

Trade Description: September 16, 2015:
Believe it or not but consumers spent more money on video games than movies. One of the biggest video game makers out there is EA.

They are considered part of the technology sector. According to the company, "Electronic Arts (EA) is a global leader in digital interactive entertainment. The Company delivers games, content and online services for Internet-connected consoles, personal computers, mobile phones and tablets. EA has more than 300 million registered players around the world. In fiscal year 2015, EA posted GAAP net revenue of $4.5 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality blockbuster brands such as The Sims®, Madden NFL, EA SPORTS® FIFA, Battlefield®, Dragon Age® and Plants vs. Zombies®."

Earnings have managed to beat Wall Street estimates even as revenues declined in the last couple of quarters. EA reported its 2015 Q4 results on May 5th. Results of $0.39 a share beat estimates by 13 cents. Revenues were down -2% to $896 million but that beat expectations by a wide margin. Management announced a new $1 billion stock buy back program that will last between now and May 2017.

With the May Q4 report the company lowered its Q1 guidance. Three months later EA beat this lowered forecast. Earnings were $0.15 a share. That was 13 cents better than expected. Revenues fell -10% to $693 million but still ahead of analysts' expectations. The company lowered its Q2 guidance but raised its full year 2016 estimates.

Bigger picture EA has a lot of new products coming out in the next few months that should drive sales. One of them is a Star Wars game timed to hit the shelves ahead of the movie debut in December.

Technically the long-term trend is higher. Shares did suffer a painful $16 drop from its August high to August low but has already recovered half of it. Wall Street is bullish with new price target upgrades in the $82-85 region. The point & figure chart is bullish and forecasting at $82 target.

Today EA sits just below resistance at its simple 50-dma (near $70.50). We are suggesting a trigger to buy calls at $70.75.

- Suggested Positions -

Long DEC $75 CALL (EA151218C75) entry $3.15

09/19/15 new stop @ 67.35
09/17/15 triggered @ $70.75
Option Format: symbol-year-month-day-call-strike

chart:


Facebook, Inc. - FB - close: 92.77 change: -1.64

Stop Loss: $90.65
Target(s): To Be Determined
Current Option Gain/Loss: +323.8%
Average Daily Volume = 27.3 million
Entry on August 24 at $77.03
Listed on August 20, 2015
Time Frame: Exit PRIOR to October option expiration
New Positions: see below

Comments:
09/26/15: Ouch! FB was a distinct underperformer on Friday. The early morning rally failed and shares reversed into a -1.7% decline. Shares have created a bearish engulfing candlestick reversal pattern but I would not panic yet. FB still held short-term support at $92.00. Of course more conservative traders may want to raise their stop loss anyway.

We only have three weeks left on our October options.

No new positions at this time.

Trade Description:
Facebook needs no introduction. It is the largest social media platform on the planet. As of June 30th, 2015 the company reported 1.49 billion monthly active users and 968 million daily active users. If FB were a country that makes them the most populous country on the planet. China has 1.35 billion while India has 1.25 billion people.

Earlier this year (March) the company announced a new mobile payment service through FB's messenger app. The new service will compete with similar programs through PayPal, Apple Pay, and Google Wallet.

Meanwhile business at FB is great. According to IBD, FB's Q4 earnings, announced in January, were up +69% from a year ago. Revenues were up +49%. The company released their Q1 results on April 22nd. Earnings were up +20% to $0.42 per share, which beat estimates. Revenues were up +41.6% to $3.54 billion in the first quarter.

FB's Q2 results, announced July 29th, were also better than expected. Earnings were $0.50 per share, which was three cents above estimates. Revenues surged +39% to $4.04 billion, above expectations. Daily active users were up +17%. Mobile daily active users were up +29%. Monthly actives were up +13%. Wall Street expects income to surge next year with +12% profit growth in 2015 but +32% profit growth in 2016.

FB continues to see growth among its niche properties. The company bought Instagram for $1 billion in 2012. Last late year Instagram surpassed Twitter with more than 300 million active users. FB is also a dominant player in the messenger industry with more than 600 million users on WhatsApp and 145 million users on Facebook Messenger.

FB has not yet started to truly monetize its WhatsApp and Messenger properties. It's just now starting to include ads in Instagram. Eventually, with audiences this big, FB will be able to generate a lot of cash through additional advertising. On the subject of Instagram advertising, FB just released the advertising API for the photo-sharing service in August 2015. The API or application programming interface will allow third-party marketers to plug into the system to buy advertising. Instagram could soon rival Google and Twitter for the online ad market. According to EMarketer, Instagram will surpass Google and Twitter for U.S. mobile display ad revenue by 2017.

Since we are talking about advertising, this year has seen FB jump into the video ad market with both feet and it's off to a strong start. FB claims that it's already up to four billion video views a day. They had 315 billion video views in Q1 2015. That's pretty significant. YouTube had 756 billion video views in Q1 but YouTube has been around for ten years (FYI: YouTube is owned by Google). FB has only recently focused on video.

Wall Street is growing more optimistic as FB develops its blooming video ad business, its Instagram business, and messaging properties. In the last several weeks the stock has seen a number of price target upgrades. Bank of America upped their FB price target from $95 to $105. Cantor Fitzergerald upped theirs to $100. Brean Capital raised theirs to $108. Piper Jaffray upgraded their FB target to $120.

After surging to new highs in mid July shares of FB had been consolidating sideways in the $92-99 zone. The stock broke down through the bottom of that trading range today with a -4.98% plunge toward technical support at the simple 50-dma. The broader market looks very vulnerable right now with the S&P 500, the NASDAQ composite, and the small cap Russell 2000 all piercing key support levels with today's sell-off. If this market weakness continues we want to take advantage of it.

Stocks tend to overreact to big market moves, especially to the downside. FB is no exception. When traders panic they sell everything. We want to be ready to buy FB when it nears support. Prior resistance near $85-86 should be new support. Tonight we are suggesting a buy-the-dip trigger to buy FB calls at $85.50. If triggered we'll start with a stop at $81.40, just below the simple 200-dma.

- Suggested Positions -

Long OCT $90 CALL (FB151016C90) entry $1.05

09/22/15 Instagram announces they hit 400 million users
09/19/15 new stop @ 90.65
09/16/15 More conservative traders will want to consider taking some money off the table before the Fed decision tomorrow afternoon
09/05/15 FB recently announced their WhatsApp service has hit 900 million people
08/27/15 Zuckerberg announced that FB hit a new milestone - one billion people used FB in a single day.
08/24/15 Strategy Update = remove the stop loss. Expect more volatility
08/24/15 Trade opens. FB gapped down at $77.03.
08/22/15 Adjusted entry point. FB missed our buy-the-dip trigger at $85.50 by a few cents on Friday. We want to buy calls at the opening bell on Monday morning, August 24th.
Option Format: symbol-year-month-day-call-strike

chart:


Post Holdings, Inc. - POST - close: 67.49 change: -0.76

Stop Loss: 65.85
Target(s): To Be Determined
Current Option Gain/Loss: -38.3%
Average Daily Volume = 1.0 million
Entry on September 03 at $66.55
Listed on August 29, 2015
Time Frame: Exit PRIOR to October option expiration
New Positions: see below

Comments:
09/26/15: POST's performance on Friday looks a lot like the S&P 500's. However, shares of POST underperformed with a -1.1% decline. Furthermore Friday's move has produced a potential bearish reversal pattern but it needs to see confirmation.

Tonight we are raising the stop loss to $65.85. No new positions at this time.

We only have three weeks left on our October options.

Trade Description: August 29, 2015:
Shares of ready-to-eat cereal maker POST have shown surprising strength this month and the last few days during the market turmoil. POST is also poised to be one of the better performing stocks this year with a +57% gain year to date.

POST is in the consumer goods sector. According to the company, "Post Holdings, Inc., headquartered in St. Louis, Missouri, is a consumer packaged goods holding company operating in the center-of-the-store, private label, refrigerated and active nutrition food categories. Through its Post Consumer Brands business, Post is a leader in the ready-to-eat cereal category and offers a broad portfolio that includes recognized brands such as Honey Bunches of Oats(R), Pebbles(TM), Great Grains(R), Grape-Nuts(R), Honeycomb(R), Frosted Mini Spooners(R), Golden Puffs(R), Cinnamon Toasters(R), Fruity Dyno-Bites(R), Cocoa Dyno-Bites(R), Berry Colossal Crunch(R) and Malt-O-Meal(R) hot wheat cereal.

Post's Michael Foods Group supplies value-added egg products, refrigerated potato products, cheese and other dairy case products and dry pasta products to the foodservice, food ingredient and private label retail channels and markets retail brands including All Whites(R), Better'n Eggs(R), Simply Potatoes(R) and Crystal Farms(R). Post's active nutrition platform aids consumers in adopting healthier lifestyles through brands such as PowerBar(R), Premier Protein(R) and Dymatize(R). Post's Private Brands Group manufactures private label peanut butter and other nut butters, dried fruits, baking and snacking nuts, cereal and granola."

The earnings picture has improved significantly. Back in February 2015 POST reported its Q1 results that missed estimates by a wide margin. Yet the last couple of quarters the company has seen earnings and revenues soar. Their Q2 report said revenues were up +140%. Their Q3 results, announced on August 6th, reported revenue growth of +91%. Earnings were $0.27 per share, which was $0.20 better than expected. Management raised their full year guidance from $585-610 million up to $635-650 million. A lot of POST's revenue growth has been due to its aggressive acquisition strategy but Wall Street doesn't seem to care.

As a matter of fact, Wall Street has ignored POST's warnings about its egg supply. The company uses a lot of eggs and the U.S. egg-production industry has been hammered by an outbreak of Avian Influenza (AI). The last significant outbreak of AI was back in the early 1980s. According to CNN the current outbreak has been causing havoc since December 2014 and 35 million egg-laying hens have been killed. The price of eggs surged this summer but looks like it may have peaked.

Back in May this year POST warned that the outbreak had infected a significant portion of their company-owned flocks and 35% of their egg commitments could be impacted. Fortunately, a few weeks later they said the damage may be down to just 25% of their egg supply but they still expected a $20 million hit to earnings. The market doesn't seem to care.

Instead POST seems to be getting a boost from the crop outlook for the rest of 2015. The USDA raised their estimates for crop productions. The harvest this year could see record soybean numbers. Corn could produce the third largest crop on record. This is pushing commodity prices lower, which is a bullish tailwind for cereal makers like POST.

Shares of POST have been very strong this month. The market's reaction to their Q3 results produced a bullish breakout in POST with a rally past resistance near $55.00 and a surge to all-time highs. When the market crashed late last week and this past Monday, shares of POST did see a decline but it was minor compared to the rest of the market. POST didn't even dip to support at $60.00.

Today POST is surging. Shares are poised to breakout past their mid-August high. If that happens POST could see more short covering. The most recent data listed short interest at 19% of the 54.2 million share float. The point & figure chart is bullish and forecasting at $78.00 target. Tonight we are suggesting a trigger to open bullish positions at $66.55.

- Suggested Positions -

Long OCT $70 CALL (POST151016C70) entry $2.43

09/26/15 new stop @ 65.85
09/10/15 new stop at $62.40
More conservative traders may want to exit early tomorrow morning
09/03/15 triggered @ $66.55
Option Format: symbol-year-month-day-call-strike

chart:


Constellation Brands Inc. - STZ - close: 129.82 change: +2.70

Stop Loss: $124.95
Target(s): To Be Determined
Current Option Gain/Loss: -48.8%
Average Daily Volume = 1.1 million
Entry on September 16 at $130.55
Listed on September 3, 2015
Time Frame: Exit PRIOR to Earnings on October 7th
New Positions: see below

Comments:
09/26/15: Friday was a good day for STZ bulls. Shares of STZ rallied at the open but so did most of the market. However, unlike the rest of the market, STZ managed to maintain its gains and actually rallied higher into the closing bell on Friday. The stock added +2.1% and looks poised to breakout past resistance in the $130.00 area.

We do not have a lot of time left on this trade. No new positions at this time.

Trade Description: September 3, 2015:
Major beer brands have suffered from the boom in craft beers. Yet STZ's Corona and Modelo have seen significant growth, especially in the U.S. The company's earnings and revenue growth has fueled a rally in the stock that has outpaced the major marker indices.

STZ is in the consumer goods sector. According to the company, "Constellation Brands (NYSE:STZ and STZ.B) is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Canada, Mexico, New Zealand and Italy. In 2014, Constellation was one of the top performing stocks in the S&P 500 Consumer Staples Index. Constellation is the number three beer company in the U.S. with high-end, iconic imported brands including Corona Extra, Corona Light, Modelo Especial, Negra Modelo and Pacifico. Constellation is also the world`s leader in premium wine, selling great brands that people love including Robert Mondavi, Clos du Bois, Kim Crawford, Rex Goliath, Mark West, Franciscan Estate, Ruffino and Jackson-Triggs. The company`s premium spirits brands include SVEDKA Vodka and Black Velvet Canadian Whisky.

Based in Victor, N.Y., the company believes that industry leadership involves a commitment to brand-building, our trade partners, the environment, our investors and to consumers around the world who choose our products when celebrating big moments or enjoying quiet ones. Founded in 1945, Constellation has grown to become a significant player in the beverage alcohol industry with more than 100 brands in its portfolio, sales in approximately 100 countries, about 40 facilities and approximately 7,200 talented employees."

This past January STZ reported their fiscal year 2015 Q3 results that beat analysts' estimates on both the top and bottom line. Management raised their 2015 guidance. Their Q4 results were announced on April 9th. Earnings were up +37% from a year ago to $1.03 per share. That was 9 cents above estimates. Revenues were up +5% to $1.35 billion. Gross margins improved to 44%.

STZ said they're seeing strong demand for their Mexican beer brands Corona and Modelo. They're gaining market share in both the spirits and wine categories as well.

The company said 2015 sales were up +24% from the prior year to $6.03 billion. STZ's management guided in-line for fiscal 2016 and forecast earnings of $4.70 to $4.90 per share. That compares to 2015's profit of $4.17 per share (essentially +12% to +17.5% earnings growth).

STZ's most recent earnings report was July 1st. Wall Street was expecting a profit of $1.24 per share on revenues of $1.62 billion. STZ narrowly beat expectations with a profit f $1.26 per share. Revenues were up +7% to $1.63 billion. Management then raised their full-year 2016 earnings guidance from $4.70-4.90 to $4.80-5.00 a share.

The stock did not get much of a reaction from its earnings news or improved guidance. There was a brief spike higher but it didn't last. STZ spent almost the entire month of July consolidating sideways.

The technical picture changed in August. STZ began to rally and displayed impressive strength with a climb from its July 27th low near $115 to $130 by August 18th. Then STZ gave it all back in about three days as the U.S. market tanked. The sharp correction lower saw STZ plunge back toward support in the $114-115 area. What is shocking is how fast STZ has recovered. Buyers just poured into this stock and now STZ is testing its all-time highs near $130 again.

While the three-day crash is a bit terrifying the relative strength in STZ's rebound is impressive. I would consider this an aggressive, higher-risk trade due to STZ's volatility. Tonight we are suggesting a trigger to buy calls at $130.55. We'll exit prior to the October option expiration.

- Suggested Positions -

Long OCT $135 CALL (STZ151016C135) entry $2.05

09/19/15 new stop @ 124.95
09/16/15 triggered @ $130.55
Option Format: symbol-year-month-day-call-strike

chart:


The TJX Companies - TJX - close: 70.96 change: -0.27

Stop Loss: $69.85
Target(s): To Be Determined
Current Option Gain/Loss: -39.7%
Average Daily Volume = 3.0 million
Entry on September 03 at $72.05
Listed on August 26, 2015
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/26/15: The Friday morning rally in TJX failed near $72.00 but traders bought the dip at its rising 50-dma. TJX has not made a lot of progress the last three weeks. I'm concerned its upward momentum is dying.

No new positions at this time.

Trade Description: August 26, 2015
Believe it or not but there are only 120 days until Christmas 2015. Most of us are just adjusting to school starting again but retailers are already planning for the 2015 holiday shopping season. Historically the time to buy retailers has been early fall (i.e. right now) and then sell on Black Friday (day after Thanksgiving). TJX could be a great way to play that seasonal trend.

TJX is in the services sector. According to the company, "The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. As of May 2, 2015, the end of the Company's first quarter, the Company operated a total of 3,441 stores in seven countries, the United States, Canada, the United Kingdom, Ireland, Germany, Poland, and Austria, and three e-commerce sites. These include 1,126 T.J. Maxx, 987 Marshalls, 498 HomeGoods and 6 Sierra Trading Post stores, as well as tjmaxx.com and sierratradingpost.com in the United States; 239 Winners, 97 HomeSense, and 39 Marshalls stores in Canada; and 416 T.K. Maxx and 33 HomeSense stores, as well as tkmaxx.com, in Europe."

Just a couple of days before the market collapsed TJX reported its Q2 2016 earnings results (on August 18th). Wall Street was looking for a profit of $0.76 per share on revenues of $7.25 billion. TJX beat both estimates with a profit of $0.80 per share and revenues of $7.36 billion. Earnings were up +7% from a year ago and revenues were up +6.5%. Gross margins improved. Comparable-store sales improved from +3% a year ago to +6%. TJX said their customer traffic improved for the fifth quarter in a row.

Most retailers have not been doing so hot this year so TJX management was naturally optimistic given their strong results. Carol Meyrowitz, Chairman and Chief Executive Officer of The TJX Companies, Inc., commented on her company's quarter,

"We are extremely pleased that our momentum continued in the second quarter. Our 6% consolidated comparable store sales growth and 7% adjusted EPS growth significantly exceeded our expectations. It was great to see that comp sales were entirely driven by customer traffic - our fifth consecutive quarter of sequential traffic improvement - and that we had strong sales across all of our divisions. Our flexible model and ability to offer an eclectic, exciting merchandise mix at outstanding values continues to resonate with consumers in all of our geographies. We were also very pleased with our solid merchandise margins. We are proud of our strong comp sales, traffic increases and merchandise margins, all of which are core to a successful retail business. We enter the back half of the year in an excellent position to keep our momentum going and have many exciting initiatives planned. I am convinced that our gift-giving selections will be better than ever this year, and that our fall and holiday marketing campaigns will keep attracting more shoppers to our stores. Above all, we will be offering consumers amazing values every day! The third quarter is off to a solid start and we are raising our full year comp sales and earnings per share guidance. Today, we are a nearly $30 billion retailer with a clear vision for growth, a differentiated apparel and home fashions business, and world-class organization. Looking ahead, we are confident that we will achieve, and hope to surpass, our plans as we continue to bring value around the world and grow TJX to a $40 billion-plus company!"
TJX management did lower their Q3 guidance but they raised their full year 2016 EPS forecast. They also raised their 2016 comparable store sales estimate from +2-3% to +3-4%. It was the second quarter in a row that management raised their guidance.

The stock market's recent sell-off produced a correction in shares of TJX, which fell from its August high of $76.78 down to an intraday low of $67.25 on Monday morning. That is a -12.4% correction. Shares just happened to bounce near technical support at the simple 200-dma and its late July lows near $67.00. In spite of the sharp retreat the point & figure chart is still bullish and still forecasting at long-term $98.00 target.

Tonight we are suggesting a trigger to buy calls at $72.05. This is a relatively longer-term trade and hope to hold this position for several weeks.

- Suggested Positions -

Long 2016 Jan $75 CALL (TJX160115C75) entry $2.90

09/19/15 new stop @ 69.85
09/03/15 triggered @ $72.05
Option Format: symbol-year-month-day-call-strike

chart:




PUT Play Updates

Aon plc - AON - close: 90.02 change: +1.07

Stop Loss: 92.25
Target(s): To Be Determined
Current Option Gain/Loss: -19.7%
Average Daily Volume = 1.2 million
Entry on September 23 at $88.65
Listed on September 22, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
09/26/15: Financial stocks were some of the market's best performers on Friday. AON followed the group higher with a +1.2% gain. More conservative traders may want to tighten their stop loss. I am not suggesting new positions at this time.

Trade Description: September 22, 2015:
A slowing global economy and negative currency winds have created a tougher environment for AON. Financial stocks in general have underperformed the broader market (-8%) and AON looks like it could play catch up with the group.

AON is in the insurance business. According to the company, "Aon plc is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise."

Management has managed to beat Wall Street's bottom line earnings estimate the last few quarters. However, they have been missing analysts' revenue estimates. Revenues have been falling faster than expected. Their Q4 results saw revenues drop to +3% growth. By Q1 revenues were down -3.4%. Their Q2 results, announced on July 31st, saw revenues decline -3.9%. As a global company the impact of negative currency headwinds does account for a lot of this revenue trouble. While some traders may want to write this off the situation could get worse as the U.S. dollar should rally when the Fed starts to raise rates.

Technically shares of AON look broken. The stock collapsed during the market's correction in late August. The oversold bounce failed pretty quickly. Now three weeks later the stock is starting to breakdown from this short-term consolidation pattern. The point & figure chart is already bearish and forecasting at $75.00 target. We are suggesting a trigger to buy puts at $88.65.

- Suggested Positions -

Long 2016 JAN $85 PUT (AON160115P85) entry $3.30

09/23/15 triggered @ $88.65
Option Format: symbol-year-month-day-call-strike

chart:


Caterpillar Inc. - CAT - close: 64.98 change: -0.82

Stop Loss: 67.05
Target(s): To Be Determined
Current Option Gain/Loss: +106.2%
Average Daily Volume = 5.8 million
Entry on September 22 at $71.12
Listed on September 21, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
09/26/15: Shares of CAT were downgraded again on Friday after Thursday's confession that the company would not meet expectations.

The stock gapped down and lost another -1.2% by the closing bell. Tonight we are adjusting the stop loss down to $67.05.

No new positions at this time.

FYI: Bloomberg ran an article explaining the downward pressure on CAT. Why is Caterpillar getting slammed .

Trade Description: September 21, 2015:
The recent relative weakness in CAT has awarded the stock a spot in our bearish plays section.

The bear market in shares of CAT continues. Most of the big industrial names are down about -10% year to date. CAT is down -21% in 2015 and off about -35% from its 2014 highs. The company has seen business hurt by a multitude of factors.

If you're not familiar with CAT, a component of the Dow Jones Industrial Average, they are in the industrial goods sector. According to the company, "For 90 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. Customers turn to Caterpillar to help them develop infrastructure, energy and natural resource assets. With 2014 sales and revenues of $55.184 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments - Construction Industries, Resource Industries and Energy & Transportation - and also provides financing and related services through its Financial Products segment."

The earnings outlook has been somewhat volatile for CAT. On January 27, 2015, the stock collapsed to new 52-week lows after the company missed earnings estimates and guided lower for 2015. Three months later on April 23rd the company beat estimates on both the top and bottom line and management raised their 2015 guidance. Jump ahead three more months and on July 23rd CAT reported earnings that were in-line with expectations but revenues fell -13% to $12.3 billion. This was below analysts' revenue estimates. CAT's management lowered their 2015 guidance below Wall Street expectations. Naturally the stock plunged on this bearish outlook.

The company has been hurt by the crash in commodity prices. Low prices for coal, iron ore, and oil discourage production and thus the need for more equipment manufacturers like CAT and rival Joy Global. A few weeks ago CAT reported that worldwide sales were down -11% in July. That was actually an improvement from the -14% drop in June. Asia was hardest hit thanks to weakness in China. Joy Global just lowered their 2015 outlook a few days ago as they look ahead through the rest of 2015. CAT also expect a tough second half.

This morning, September 21st, CAT updated their worldwide sales numbers for August. Global sales fell -11% again. This followed a -11% drop in July. The Asia-Pacific region worsened from -25% to -29%. Latin America improved from -37% to -33%. North America was still at -5%. CAT also noted that oil and gas-related equipment sales were down -20%, and transportation was down -38%. These are pretty ugly numbers.

CAT is a global business. Currency translations are taking a big bite out of sales. Weakness in the euro, the Japanese yen, and the Brazilian real are all adding pressure. When the U.S. Federal Reserve eventually raises rates that should boost the dollar and only make the currency issue worse.

CAT's management has been trying to support their stock price with an accelerated stock buyback program of $1.5 billion. It doesn't seem to be working. Investors are selling every rally and CAT is in a clear down trend of lower highs and lower lows.

The most recent oversold bounce from short-term support at $72.00 failed near resistance at $76.00. Now CAT is about to breakdown under $72.00. Friday's intraday low was $71.61. Tonight we are suggesting a trigger to buy puts at $71.40.

- Suggested Positions -

Long NOV $70 PUT (CAT151120P70) entry $3.25

09/26/15 new stop @ 67.05
09/24/15 CAT warned. The company lowered its 2015 and 2016 forecast and announced thousands in job cuts.
09/22/15 triggered on gap down at $71.12, trigger was $71.40
Option Format: symbol-year-month-day-call-strike

chart:


Compass Minerals Intl. - CMP - close: 79.18 change: +0.25

Stop Loss: 83.25
Target(s): To Be Determined
Current Option Gain/Loss: -29.7%
Average Daily Volume = 269 thousand
Entry on September 24 at $78.70
Listed on September 23, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
09/26/15: I am already turning more defensive on CMP. The stock has bounced twice near the $78.00 region in the last two days. Thursday's low was $77.68. At this point readers may want to see CMP trade at $77.50 before considering new bearish positions.

Trade Description: September 23, 2015:
Continued weakness in commodities is really started to weigh down the basic material stocks. CMP could be on the verge of a big breakdown.

CMP is in the basic materials sector. According to the company, "Compass Minerals is a leading provider of essential minerals that provide solutions to nature's challenges, including salt for winter roadway safety and other consumer, industrial and agricultural uses, and specialty plant nutrition minerals that improve the quality and yield of crops. The company produces its minerals at locations throughout the U.S. and Canada and in the U.K."

Looking at CMP's last few earnings reports their results have been mixed. They tend to beat Wall Street's estimate on the bottom line but revenues have been up and down. The most recent report (Q2) came out on July 27th. Revenues were down -1.6% from a year ago but that actually beat expectations. CMP's management has reaffirmed their full year guidance two quarters in a row but that hasn't stopped multiple analyst firms from downgrading their outlook for the stock.

Technically CMP has been churning sideways in the $79.00-86.00 trading range for about three months. A breakdown through the bottom of this range would also generate a new sell signal on the point & figure chart.

Tonight we are suggesting a trigger to buy puts at $78.70. Plan on exiting prior to CMP's earnings report in late October.

- Suggested Positions -

Long DEC $75 PUT (CMP151218P75) entry $3.20

09/24/15 triggered @ $78.70
Option Format: symbol-year-month-day-call-strike

chart:


Deckers Outdoor Corp. - DECK - close: 58.28 change: -0.48

Stop Loss: 62.65
Target(s): To Be Determined
Current Option Gain/Loss: -15.8%
Average Daily Volume = 775 thousand
Entry on September 24 at $58.28
Listed on September 23, 2015
Time Frame: Exit PRIOR to earnings
New Positions: see below

Comments:
09/26/15: The oversold bounce in DECK failed at round-number resistance near $60.00 on Friday morning. This is good news if you're bearish. I would launch new positions at current levels.

Trade Description: September 23, 2015:
Slowing sales and rising expenses is a dangerous recipe. Investors seem to have lost confidence in DECK with the stock down -35% year to date.

DECK is in the consumer goods sector. According to the company, "Deckers Brands is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities. The Company's portfolio of brands includes UGG®, Teva®, Sanuk®, Ahnu®, and HOKA ONE ONE®. Deckers Brands products are sold in more than 50 countries and territories through select department and specialty stores, 143 Company-owned and operated retail stores, and select online stores, including Company-owned websites. Deckers Brands has a 40-year history of building niche footwear brands into lifestyle market leaders attracting millions of loyal consumers globally."

The stock was crushed in January 2015 with a plunge from $94 to $66. A big chunk of that decline was a reaction to their earnings (January 29th). DECK missed estimates on both the top and bottom line and lowered guidance.

Since then DECK has seen some improvement in earnings but their most recent report was still disappointing. DECK reported its 2016 Q1 results on July 30th. Wall Street was expecting a loss of ($1.50) per share on revenues of $213 million. DECK delivered a loss of ($1.43) a share. That beat estimates but it was still worse than the ($1.07) loss a year ago. Revenues were up +4.5% to $221 million. Unfortunately DECK said their expenses were up while margins contracted.

DECK management also offered soft Q2 guidance while bumping their full-year 2016 earnings estimates. Investors chose to sell. Their Q1 results saw Teva brand sales up +6.8% but Sanuk brand sales fell -7.0% while Ugg brand sales dropped -7.2%. The Ugg number is important since Ugg sales account for more than 50% of DECK's revenues.

It looks like the bears might be right about this one but I have to warn you this is starting to look like a crowded trade. The most recent data listed short interest at 20% of the 32.1 million share float. This raises the risk of a short squeeze. Consider small positions to limit risk.

Technically DECK is in a bear market. The trend of lower highs is pushing it lower. Today DECK just broke down below key support at the $60.00 level. The next support area could be the $50 region. Today's low was $58.77. I am suggesting a trigger to open bearish positions at $58.65.

- Suggested Positions -

Long NOV $55 PUT (DECK151120P55) entry $2.85

09/24/15 Trade begins on gap down at $58.28, trigger was $58.65
Option Format: symbol-year-month-day-call-strike

chart:


International Flavors & Fragrances Inc. - IFF - close: 105.76 chg: +0.96

Stop Loss: 108.25
Target(s): To Be Determined
Current Option Gain/Loss: -39.3%
Average Daily Volume = 470 thousand
Entry on September 23 at $104.45
Listed on September 19, 2015
Time Frame: Exit PRIOR to earnings in early November
New Positions: see below

Comments:
09/26/15: I am suggesting caution on our IFF trade. The stock continued to bounce on Friday and outperformed the major indices with a +0.9% gain. More conservative traders may want to lower their stop loss.

No new positions at this time.

Trade Description: September 19, 2015:
Currencies moves and a slowing global economy appear to be souring IFF's performance.

IFF is considered part of the basic materials sector. According to the company, "International Flavors & Fragrances Inc. (IFF) is a leading global creator of flavors and fragrances used in a wide variety of consumer products. Consumers experience these unique scents and tastes in fine fragrances and beauty care, detergents and household goods, as well as beverages, sweet goods and food products. The Company leverages its competitive advantages of consumer insight, research and development, creative expertise, and customer intimacy to provide customers with innovative and differentiated product offerings. A member of the S&P 500 Index, IFF has more than 6,200 employees working in 32 countries worldwide."

Bulls could argue that emerging markets offer a lot of opportunity as the growing population of consumers demand more variety and flavors. Bears can argue that IFF faces a lot of competition around the globe and they're very vulnerable to currency moves. We can already see the impact of currency fluctuations in IFF's results.

Their Q4 results, announced Feb. 12th, were better than expected but revenues were only +4.7%. Their Q1 results, out May 12th, beat estimates by a thinner margin. Revenues were only up +0.6%. Their Q2 report came out on August 10th. Wall Street was expecting a profit of $1.36 a share on revenues of $776 million. IFF only delivered $1.29 a share with revenues down -2.6% to $767 million. Currencies are a big part of the issue here but the stock is not acting very healthy either.

On August 6th, 2015, the company announced they were raising their quarterly dividend by +20% to $0.56 a share. IFF should begin trading ex-dividend on Sept. 23rd. Management also announced a $250 million stock buyback through 2017. This news has not helped the stock price.

Investors seem to be selling the rally. Shares peaked in early 2015 and have made a trend of lower highs and lower lows. It looks like the trend of lower lows will accelerated. A few days ago IFF broke down under a major trend line of support on its long-term chart (see below). Tonight we are suggesting a trigger to buy puts at $104.45.

- Suggested Positions -

Long NOV $100 PUT (IFF151120P100) entry $2.80

09/23/15 triggered @ $104.45
Option Format: symbol-year-month-day-call-strike

chart:


Laboratory Corp. Of America - LH - close: 112.99 change: -2.32

Stop Loss: 119.05
Target(s): To Be Determined
Current Option Gain/Loss: +8.8%
Average Daily Volume = 1.0 million
Entry on September 25 at $114.25
Listed on September 24, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
09/26/15: Our new play on LH is off to a strong start. The rally attempt this morning failed at the $116.00 level. Shares reversed and LH plunged to a -2.0% decline. The stock broke down below support and fell to new multi-month lows. Our trigger to buy puts was hit at $114.25.

Trade Description: September 24, 2015:
Investor sentiment on LH seems to have soured. The stock is up +6.8% for the year but it's down more than -10% from its early August peak. LH's 2015 gains could vanish if shares break support.

LH is in the healthcare sector. According to the company, "Laboratory Corporation of America® Holdings, an S&P 500 company, is the world's leading healthcare diagnostics company, providing comprehensive clinical laboratory services through LabCorp Diagnostics, and end-to-end drug development support through Covance-Drug Development. LabCorp is a pioneer in commercializing new diagnostic technologies and is improving people's health by delivering the combination of world-class diagnostics, drug development and knowledge services. With combined revenue pro forma for the acquisition of Covance in excess of $8.5 billion in 2014 and more than 48,000 employees in over 60 countries, LabCorp offers innovative solutions to healthcare stakeholders. LabCorp clients include physicians, patients and consumers, biopharmaceutical companies, government agencies, managed care organizations, hospitals, and clinical labs."

LH has delivered decent results over the last four quarters. The company has beaten Wall Street estimates on the bottom line four quarters in a row. They have beaten analysts' revenue estimates three out of the last four quarters. Their most recent report was July 28th. LH announced their Q2 results with revenues up +49% thanks to its Covance acquisition. Management raised their 2015 guidance above Wall Street expectations.

Unfortunately the post-earnings rally did not last very long. Shares reversed under resistance near $130 and its 2015 highs. Since then traders have been selling the rallies and LH has a bearish trend of lower highs. Today LH underperformed the broader market with a -1.27% decline. The stock is poised to breakdown under support in the $114-115 region.

The August 25th low was $114.44. Tonight I am suggesting a trigger to buy puts at $114.25. The point & figure chart is bearish and forecasting a $102.00 price target but I see potential support in the $108-110 region. Don't be surprised to see a temporary bounce in that area.

- Suggested Positions -

Long NOV $110 PUT (LH151120P110) entry $2.85

09/25/15 triggered @ $114.25
Option Format: symbol-year-month-day-call-strike

chart:


Tiffany & Co. - TIF - close: 77.38 change: -0.53

Stop Loss: $80.35
Target(s): To Be Determined
Current Option Gain/Loss: - 9.5%
Average Daily Volume = 1.2 million
Entry on September 11 at $79.75-
Listed on September 9, 2015
Time Frame: Exit PRIOR to November option expiration
New Positions: see below

Comments:
09/26/15: TIF also saw its early morning rally attempt fail. The stock rolled over into a -0.68% decline. The trend of lower highs remains in place. This stock just posted its eight weekly loss in a row.

No new positions at this time.

Trade Description: September 9, 2015:
2015 has not been a good year for shares of TIF. The stock is down about -24% for the year thanks to a big drop in January and August. The August drop was painful with a -14% slide.

TIF is in the services sector. According to the company, "Tiffany is the internationally-renowned jeweler founded in New York in 1837. Through its subsidiaries, Tiffany & Co. manufactures products and operates TIFFANY & CO. retail stores worldwide, and also engages in direct selling through Internet, catalog and business gift operations."

On January 12th, 2015, TIF issued an earnings warning for 2015 and lowered guidance. Shares fell from about $103.50 to $90. TIF spent months churning sideways and the popped higher in May thanks to better than expected earnings results. Their Q1 results, reported May 27th, beat estimates by a wide margin and revenues came in better than expected in spite of a -5% slide from a year ago.

Three months later the company missed analysts' expectations. TIF reported their Q2 results on August 27th. Wall Street was looking for earnings of $0.91 a share on revenues of $1 billion. TIF said earnings fell -10% to $0.86 a share (a 5-cent miss). Revenues dropped -0.2% to $991 million.

The strong dollar is hurting their sales. Tourists coming to America are spending less in TIF's flagship stores. Management lowered their 2016 guidance. TIF now expects earnings to be -2% to -5% less than last year's $4.20 per share.

Analysts have been lowering their price targets in response to TIF's new guidance but shares are sinking faster than expected.

TIF is currently hovering near round-number support at $80.00. The breakdown in August was significant because TIF has broken below its long-term up trend dating back to the 2009 bear-market lows (see weekly chart below). If TIF breaks down below $80 the next support level could be $70.

- Suggested Positions -

Long NOV $75 PUT (TIF151120P75) entry $2.42

09/23/15 new stop @ 80.35
09/19/15 new stop @ 82.35
09/11/15 triggered @ $79.75
Option Format: symbol-year-month-day-call-strike

chart: