Editor's Note:
The U.S. market's midday bounce reversed this afternoon. Most of the major indices faded back into negative territory for the session.

AGCO and GRUB hit our stop loss.


Current Portfolio:


BULLISH Play Updates

ConAgra Foods, Inc. - CAG - close: 44.44 change: -0.25

Stop Loss: 43.25
Target(s): To Be Determined
Current Gain/Loss: -2.0%
Entry on August 10 at $45.35
Listed on July 30, 2015
Time Frame: Exit PRIOR to earnings on September 22nd,
Average Daily Volume = 3.3 million
New Positions: see below

Comments:
08/13/15: It was a relatively quiet day for CAG. Shares slipped -0.5%. Tomorrow we may not be so lucky. After the closing bell tonight CAG reported that its private label business assets have been relabeled as "impaired". The company will need to write down the value of these assets. Shares of CAG might spike lower at the open tomorrow. However, the market already knew that CAG is trying to sell this business and the market already knew that they would probably lose $1.5 billion on any deal. So it's possible that tonight's statement may not have much of an impact.

No new positions at this time.

Trade Description: July 30, 2015:
Two years ago CAG spent $5 billion to buy private-label food maker Ralcorp. At the time, CAG called it a "transformational" deal. Unfortunately their private-label business has been nothing but a money pit.

CAG is in the consumer goods sector. According to the company, "ConAgra Foods, Inc., (CAG), is one of North America's leading food companies, with brands in 99 percent of America’s households. Consumers find Banquet, Chef Boyardee, Egg Beaters, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM, Peter Pan, Reddi-wip, Slim Jim, Snack Pack and many other ConAgra Foods brands in grocery, convenience, mass merchandise and club stores. ConAgra Foods also has a strong business-to-business presence, supplying frozen potato and sweet potato products as well as other vegetable, spice and grain products to a variety of well-known restaurants, foodservice operators and commercial customers."

In spite of CAG's troubles with its private-label business the stock was trading at multi-year highs in mid June this year. Then on June 19th the stock soared more than +10%. Shares were already flirting with its all-time highs from the late 1990s in the $38-39 area. They vaulted higher when activist hedge fund JANA Partners announced they had amassed a 7.2% stake in CAG. JANA argued that CAG was undervalued and not doing enough to build shareholder value.

It would appear that CAG's management has embraced JANA's involvement and direction. They have already appointed two of JANA's nominees to the Board of Directors. When CAG reported its Q4 earnings on June 30th they announced they would exit the private-label business.

The private-label business, Ralcorp, makes stuff like cereal, pasta, crackers, jams, jellies, syrups, and frozen waffles. They currently account for about 25% of CAG's sales but they're also the only business segment that lost money last quarter.

Multiple companies, including TreeHouse Foods (THS) and Post Holdings (POST), are said to be bidding for the private-label business. Estimates suggest it could sell for $3.5 billion. That's a big drop from the $5 billion price tag CAG paid.

Shares of CAG saw a two-week correction from its early July highs but traders have started to buy the stock again and recently broke the short-term trend of lower highs. We suspect this activist-investor fueled rally in CAG has further to run. Often activist investors urge companies to break up to unlock shareholder value or push for a company to sell itself. We'll have to see what the next move is. Today's high was $44.51. We are suggesting a trigger to launch bullish positions at $45.25.

- Suggested Positions -

Long CAG stock @ $45.35

- (or for more adventurous traders, try this option) -

Long SEP $45 CALL (CAG150918C45) entry $1.35

08/10/15 triggered on gap higher at $45.35, suggested entry was $45.25
Option Format: symbol-year-month-day-call-strike


Chicago Bridge & Iron Co. - CBI - close: 53.20 change: +0.62

Stop Loss: 50.85
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on August -- at $---.--
Listed on August 10, 2015
Time Frame: Exit PRIOR to October option expiration
Average Daily Volume = 1.8 million
New Positions: Yes, see below

Comments:
08/13/15: CBI is still churning sideways in the $51-54 zone. The stock did underperform the broader market today. If the recent trend is any guide CBI should bounce near its converging 50-dma and 100-dma near $51.00. Our suggested entry point is $54.05.

Trade Description: August 10, 2015:
Last year was a horrible one for shares of CBI. The stock had rallied from less than $5.00 per share at its 2009 lows to almost $90. They traded above $89 in April 2014. Then CBI reversed lower and didn't stop until it hit a capitulation low of $32.16 on January 30th, 2015. That was a -64% plunge in less than a year. It looks like CBI has turned the corner. The stock is outperforming the major indices with a +26% gain year to date.

CBI is in the industrial goods sector. According to the company, "CB&I (CBI) is the most complete energy infrastructure focused company in the world. With 125 years of experience and the expertise of approximately 54,000 employees, CB&I provides reliable solutions while maintaining a relentless focus on safety and an uncompromising standard of quality."

The company's most recent earnings report was July 23rd. CBI delivered a profit of $1.55 per share. That was 13 cents better than estimates. Revenues did fall -2.6% to $3.21 billion but mostly due to foreign currency headwinds, which shaved off about $270 million. CBI had a strong quarter with $2.8 billion in new contract wins. Their backlog remains one of the biggest in the business at more than $29 billion.

Philip K. Asherman, CB&I's President and Chief Executive Officer, commented on his company's quarterly results, "We continue to deliver solid performance despite a volatile commodity market and geopolitical issues that create instability in many of the traditional international energy markets. The U.S. remains a great opportunity for us particularly in LNG, petrochemicals and fossil power generation markets. East Africa will be a source of solid backlog for many years as Anadarko and other owners develop these tremendous assets. Additionally, we continue to produce significant profitability from not only our insourcing capabilities but also the diverse portfolio of new opportunities in our facilities maintenance, engineered products, steel plate storage, pipe fabrication, technology licensing and catalyst businesses."

Zacks Equity Research had some positive things to say about CBI. They looked at the company's growth rate and believe CBI will grow earnings at 12%, which is almost double the industry average of 6.7%. Zacks also noted that CBI's cash flow growth of 19% was significantly above its industry average of just 4.9%.

CBI has not been an easy stock to own this year. Shares have been volatile. The month of May saw a rally from about $44 to $59 in a matter of days. Then CBI gave it all back with a six-week plunge. It looks like CBI is back in rally mode. Previously weakness in oil played a part in CBI's troubles but shares appear to be divorced from crude oil movement. There are concerns about a slowing global economy but CBI's ability to grow earnings seem to be shielding it at the moment. The point & figure chart is bullish and forecasting at $65.00 target.

On a short-term basis CBI appears to be breaking out from a bull-flag consolidation pattern over the last several days. Tonight I am suggesting a trigger to open bullish positions at $54.05.

Trigger @ $54.05

- Suggested Positions -

Buy CBI stock @ $54.05

- (or for more adventurous traders, try this option) -

Buy the OCT $55 CALL (CBI151016C55)

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


The Hartford Financial Services Group - HIG - close: 48.82 chg: +1.34

Stop Loss: 46.40
Target(s): To Be Determined
Current Gain/Loss: +1.0%
Entry on August 10 at $48.35
Listed on August 03, 2015
Time Frame: Exit PRIOR to September option expiration
Average Daily Volume = 3.0 million
New Positions: see below

Comments:
08/13/15: It was an exciting day for shares of HIG. Rumors that the company was a takeover target sparked a big rally before lunchtime. HIG surged +7.3% intraday and hit $50.95 but gave back the majority of these gains. We can't complain about a new multi-year high when the rest of the market was sinking today.

I am not suggesting new positions at this time.

Trade Description: August 3, 2015:
HIG had been hovering near multi-year highs from March through June this year. Then in July the stock began to accelerate higher. The catalyst was merger and acquisition news in its industry.

On July 1st ACE Limited (ACE) announced it would buy Chubb Corp. (CB) for $28.3 billion. This lit a fire under the property and casualty insurance stocks and HIG surged to new highs for the year.

If you're familiar with HIG they are in the financial sector. According to the company, "With more than 200 years of expertise, The Hartford (HIG) is a leader in property and casualty insurance, group benefits and mutual funds. The company is widely recognized for its service excellence, sustainability practices, trust and integrity."

The last couple of earnings reports for HIG have been mixed. They have been beating Wall Street's bottom line estimate but have missed the revenue numbers. Their most recent report was July 27th. Analysts were expecting a profit of $0.77 per share. HIG crushed the number with a profit of $0.91 per share. That is a +193% improvement from the $0.31 profit a year ago. Revenues were up +1.5% to $4.68 billion.

In addition to beating the estimate HIG raised its dividend and boosted its stock buyback program by an additional $1.6 billion. The current repurchase program stands at $2 billion through December 31, 2016.

Shares have garnered a couple of price target upgrades since its earnings report. The new targets are $53 and $55. There has been more chatter and speculation that HIG is a potential takeover target, which is probably why shares are outperforming its peers. The S&P SPDR Insurance ETF is up +7.8% year to date while HIG is up +15.6%.

Tonight we are suggesting small bullish positions if HIG can trade at $48.35 or higher.

*small positions to limit risk* - Suggested Positions -

Long HIG stock @ $48.35

- (or for more adventurous traders, try this option) -

Long SEP $50 CALL (HIG150918C50) entry $1.13

08/10/15 triggered @ 48.35
Option Format: symbol-year-month-day-call-strike


Total System Services, Inc. - TSS - close: 47.47 change: +0.21

Stop Loss: 45.85
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on August -- at $---.--
Listed on August 12, 2015
Time Frame: Exit 6 to 9 weeks.
Average Daily Volume = 969 thousand
New Positions: Yes, see below

Comments:
08/13/15: TSS displayed relative strength on Thursday with a +0.44% gain. The stock is inching closer to a bullish breakout higher. Our suggested entry point is $48.05.

Trade Description: August 12, 2015:
TSS is probably one of the best performing stocks in the S&P 500 this year. The S&P 500 index is up +1.3% year to date. The financial sector is up +1%. Yet TSS has surged +39% in 2015 and shares look poised to keep running.

TSS is in the financial sector. According to the company, "As one of the world's largest payment solutions and services companies, TSYS believes payments should revolve around people, not the other way around. Since we got our start in the payments space more than 30 years ago, we have evolved from a supporting role servicing several hundred bank card issuers and bank acquirers to directly touching hundreds of thousands of merchants and millions of consumers.

TSYS is a global, publicly traded company with operations in more than 80 countries, including many of the world’s most high-growth emerging markets. We provide electronic payment services to financial institutions and companies around the globe with a broad range of issuing and acquiring payment technologies, including consumer, credit, debit, healthcare, loyalty, prepaid, chip and mobile payments."

Earnings are supposed to be the main driver behind stock price appreciation. TSS has not disappointed. The company has beaten Wall Street's estimates on both the top and bottom line the last three quarters in a row. Revenues have grown +8.9%, +11.7%, and +15.1%, respectively over the last three quarters.

TSS' most recent earnings report was July 28th. They announced their Q2 results were $0.58 per share. This was a +29% improvement from a year ago and five cents above expectations. Management then raised their 2015 guidance.

Since this late July earnings report shares of TSS have been consolidating sideways in the $46-48 range and essentially ignoring the market's recent volatility. Shares displayed some relative strength today and we want to be ready to hop on board if TSS can breakout. Tonight we're listing a trigger to open bullish positions at $48.05.

Trigger @ $48.05

- Suggested Positions -

Buy TSS stock @ $48.05

- (or for more adventurous traders, try this option) -

Buy the NOV $50 CALL (TSS151120C50)

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


21Vianet Group, Inc. - VNET - close: 20.25 change: +0.14

Stop Loss: 19.20
Target(s): To Be Determined
Current Gain/Loss: -2.4%
Entry on July 23 at $20.75
Listed on July 22, 2015
Time Frame: Exit PRIOR to earnings on August 26th
Average Daily Volume = 996 thousand
New Positions: see below

Comments:
08/13/15: VNET held up pretty well on Thursday with a +0.6% gain. Traders bought the dip near $20.00 this morning.

Keep in mind that we do not have a lot of time left. VNET is scheduled to report earnings on August 26th. We plan to exit before their announcement.

More conservative traders may want to raise their stop loss.

Trade Description: July 22, 2015:
Buckle your seatbelt. We are adding a fast-moving Chinese Internet stock to the play list tonight. This trade is not for the faint of heart. The Chinese market has been very volatile in recent weeks. This has been exacerbated by merger and acquisition news.

VNET is in the technology sector. According to the company, "21Vianet Group, Inc. is a leading carrier-neutral internet data center services provider in China. 21Vianet provides hosting and related services, managed network services, cloud services, content delivery network services, last-mile wired broadband services and business VPN services, improving the reliability, security and speed of its customers' internet infrastructure. Customers may locate their servers and networking equipment in 21Vianet's data centers and connect to China's internet backbone through 21Vianet's extensive fiber optic network. In addition, 21Vianet's proprietary smart routing technology enables customers' data to be delivered across the internet in a faster and more reliable manner. 21Vianet operates in more than 30 cities throughout China, servicing a diversified and loyal base of more than 2,000 customers that span numerous industries ranging from internet companies to government entities and blue-chip enterprises to small- to mid-sized enterprises."

The Wall Street Journal recently noted in June that seven U.S.-listed Chinese companies had been approached with offers to go private. That's a big spike in buyout offers. From January through May this year there had only been five such offers. One of the companies recently approached is VNET.

On June 10th VNET was approached with a preliminary non-binding proposal by Kingsoft Corp. and Tsinghua Unigroup International to go private for $23.00 per American depositary share ("ADSs"). That's the stock we can trade on the NASDAQ. Naturally the stock surged on this announcement. On June 16th VNET announced they had formed a special committee to review this proposal.

Unfortunately for shares of VNET and most Chinese stocks the Shanghai market in China had peaked in mid June and began to crash. The next three weeks saw a -30% plunge in the Shanghai market. The sell-off really accelerated in the first week of July. We can see the impact this market plunge was having on VNET with the big declines in early July.

Shares of VNET produced a huge bounce on July 9th when they announced the company had hired financial advisors and legal counsel to help them review the proposal to go private. In their press release they warned investors that "no decision has been made" nor is there any assurance that any "definitive offer will be made". This warning didn't stop the rally in VNET's stock which has continued to rise.

The Chinese government has thrown billions of dollars at their market to stop the crash and it seems to be working. The fever seems to have broken and this should provide a less dangerous environment for shares of VNET to trade in. We suspect VNET will continue to rally as the M&A talk heats up. However, this is an aggressive, higher-risk trade. There is no guarantee of a deal. Shares of VNET are clearly very volatile. I suggest small positions to limit risk.

NOTE: VNET does have options but the spreads are too wide to trade them.

*small positions to limit risk* - Suggested Positions -

Long VNET stock @ $20.75

08/01/15 new stop @ 19.20
07/27/15 The Chinese Shanghai index plunged -8.48%
07/23/15 triggered @ $20.75




BEARISH Play Updates

GATX Corp. - GMT - close: 49.81 change: -0.30

Stop Loss: 52.05
Target(s): To Be Determined
Current Gain/Loss: -0.9%
Entry on August 12 at $49.35
Listed on August 11, 2015
Time Frame: Exit 4 to 6 weeks
Average Daily Volume = 334 thousand
New Positions: see below

Comments:
08/13/15: GMT tried to rally this afternoon but quickly reversed. Shares closed down -0.59%, underperforming the major indices. I would prefer to see a new drop below $49.50 before considering new bearish positions. More conservative traders might want to use a lower stop loss.

Trade Description: August 11, 2015:
Thus far 2015 has not been a good year for GMT stock. Shares are down -13% year to date and the stock looks poised to see its loss widen.

GMT is in the services sector. According to the company, "GATX Corporation (GMT) strives to be recognized as the finest railcar leasing company in the world by its customers, its shareholders, its employees and the communities where it operates. As the largest global railcar lessor, GATX has been providing quality railcars and services to its customers for more than 115 years. GATX has been headquartered in Chicago, Illinois, since its founding in 1898."

GMT started the year on a strong note with Q4 earnings results better than expected and revenues up +12.6%. Management raised their 2015 guidance following a healthy Q4 report. Unfortunately business has slowed down significantly in the last couple of quarters.

GMT's most recent report was July 23rd. The company delivered their Q2 results of $1.03 per share. That's a -10% drop from a year ago and 19 cents worse than expected. Revenues were down -0.14% to $365 million, which is significantly below Wall Street's estimate of $384 million. These results would have been even worse if GMT has not repurchased 727,000 shares last quarter.

The company claims they have strong demand for their rental fleet of rail cars. However, they're seeing new railcar orders slowing down. Their customers are delaying new orders due to the falling price of oil. Oil transport is a significant portion of their business.

According to the U.S. Energy Information Agency (EIA) 70% of U.S. production from the Bakken formation and 64% of Niobrara production is transported by rail. According to the American Association of Railroads, the U.S. rail system transported 11 times more crude oil in 2013 than all the oil moved by trains from 2005 to 2009 (source: CNBC). At the time that was about 815,000 barrels a day. It has most assuredly risen since then as U.S. production continued to climb through 2014 and into 2015.

Now that crude oil prices have crashed it has cut demand by producers to transport it. Technically shares of GMT are in a bear market. Investors have been selling the rallies for months. They just sold the oversold bounce a couple of weeks ago. Today GMT has closed below round-number support at $50.00 and is poised to hit new two-year lows.

The point & figure chart is forecasting a $45.00 target. I will point out that short interest is almost 15% of the 42.8 million share float. We should probably consider a slightly more aggressive trade due to some volatility. Tonight I am suggesting a trigger to open bearish positions at $49.35.

FYI: GMT has a $0.38 dividend coming up in September. The ex-dividend date should be in the September 11-15 time frame.

- Suggested Positions -

Short GMT stock @ $49.35

- (or for more adventurous traders, try this option) -

Long SEP $50 PUT (GMT150918P50) entry $2.45

08/12/15 Caution: GMT has produced a bullish engulfing candlestick reversal pattern.
08/12/15 triggered @ $49.35
Option Format: symbol-year-month-day-call-strike


Whiting Petroleum - WLL - close: 19.19 change: -0.89

Stop Loss: 20.35
Target(s): To Be Determined
Current Gain/Loss: +3.3%
Entry on August 03 at $19.85
Listed on August 01, 2015
Time Frame: Exit PRIOR to earnings
Average Daily Volume = 7.1 million
New Positions: see below

Comments:
08/13/15: Crude oil slipped to new relative lows again today and this weighed heavily on the energy stocks. WLL fell -4.4%. While I do expect energy stocks to move lower I would hesitate to launch new positions in WLL.

Trade Description: August 1st, 2015:
The price of crude oil has fallen more than 50% in the last year. It's wreaking havoc on energy company earnings and revenues. Unfortunately the outlook is not very bullish. The global economy is stalling. China, the biggest buyer of commodities, is growing at multi-year lows. The U.S. is creeping along at +2% GDP growth while oil inventories in the U.S are near 80-year highs.

The Middle East OPEC cartel is pumping a high-volume of oil, regardless of price declines, to maintain market share. A recent report showed that OPEC boosted production by +140,000 barrels a day in July from its June production. OPEC is hoping to pressure the U.S. fracking industry out of business but it's not working. U.S. production remains resilient and near record highs.

If that wasn't enough the Federal Reserve is desperate to raise interest rates and would like to raise in September. Rising interest rates usually boost a country's currency. If the Fed does raise rates the U.S. dollar should rally even further. A rising dollar puts downward pressure on commodity prices. This paints a bearish picture for crude oil prices.

Given this outlook for crude we're adding a bearish play in the energy industry. Some view WLL as a barometer of the U.S. shale oil and gas industry. If that's the case the stock price is suggesting a dire forecast.

WLL is in the basic materials sector. According to the company, "Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain and Permian Basin regions of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota, the Niobrara play in northeast Colorado and its Enhanced Oil Recovery field in Texas."

WLL just reported its Q2 earnings on July 29th. Analysts were only expecting a profit of $0.02 per share. WLL delivered $0.04. However, that's a -97% drop from a year ago. Revenues plunged -29.4% to $590 million, which was significantly below analysts' estimates of $677 million.

We have to give the company credit for cutting costs dramatically during a tough time in the oil industry. Otherwise they would not have managed a profit for the quarter. WLL also managed to set a new company record for production of 170,000 barrels a day in the second quarter. Unfortunately, these positives are not enough to outweigh the overall bearish impact of plunging oil prices.

Plus, investors and analysts might shun WLL as the company is sending mixed messages. The company claimed that based on strong results during the second quarter they were raising their capex budget from $2 billion to $2.3 billion. That was two weeks ago. This past week WLL has already cut its capex budget. Now they're forecasting $2.15 billion. They only plan on running eight drilling rigs in the second half of 2015 instead of their previous guidance of 11 rigs.

Wall Street is turning more cautious on WLL. The stock has seen several downgrades and lowered price targets recently. The stock has been very weak. Momentum is bearish. The oversold bounce last week just failed under technical resistance at its simple 10-dma. Now WLL is testing round-number resistance at $20.00. We are suggesting a trigger to launch bearish positions at $19.85.

- Suggested Positions -

Short WLL stock @ $19.85

- (or for more adventurous traders, try this option) -

Long SEP $20 PUT (WLL150918P20) entry $2.05

08/05/15 new stop @ 20.35
08/05/15 new stop @ 21.25
08/03/15 triggered @ $19.85
Option Format: symbol-year-month-day-call-strike



CLOSED BULLISH PLAYS

AGCO Corp. - AGCO - close: 54.31 change: -0.62

Stop Loss: 53.85
Target(s): To Be Determined
Current Gain/Loss: -4.1%
Entry on August 06 at $56.15
Listed on August 05, 2015
Time Frame: Exit PRIOR to earnings
Average Daily Volume = 1.1 million
New Positions: Yes, see below

Comments:
08/13/15: It has been a terrible week for AGCO shares. The stock reversed from 52-week highs and pierced technical support at its 50-dma today. Our stop was hit at $53.85.

*small positions to limit risk* - Suggested Positions -

Long AGCO stock @ $56.15 exit $53.85 (-4.1%)

- (or for more adventurous traders, try this option) -

NOV $60 CALL (AGCO151120C60) entry $1.35 exit $0.85 (-37.0%)

08/13/15 stopped out
08/10/15 new stop @ 53.85
08/06/15 triggered @ $56.15
Option Format: symbol-year-month-day-call-strike

chart:



CLOSED BEARISH PLAYS

GrubHub Inc. - GRUB - close: 30.32 change: +0.34

Stop Loss: 30.55
Target(s): To Be Determined
Current Gain/Loss: -4.8%
Entry on August 11 at $28.60
Listed on August 08, 2015
Time Frame: Exit PRIOR to September option expiration
Average Daily Volume = 2.2 million
New Positions: see below

Comments:
08/13/15: I warned readers yesterday that any follow through higher in GRUB would likely stop us out. The stock managed to break through resistance near $30.00 and hit our stop loss at $30.55.

- Suggested Positions -

Short GRUB stock @ $28.60 exit $30.55 (-6.8%)

- (or for more adventurous traders, try this option) -

SEP $27.50 PUT (GRUB150918P27.5) entry $1.25 exit $0.65 (-48.0%)

08/13/15 stopped out
08/11/15 triggered @ $28.60
Option Format: symbol-year-month-day-call-strike

chart: