Editor's Note:

The U.S. market produced a widespread decline although losses were relatively minor.

BCR hit our entry trigger. UTX and XLNX were stopped out.


Current Portfolio:


CALL Play Updates

Ameriprise Financial - AMP - close: 89.86 change: -1.29

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
08/06/13: The market's widespread pullback finally pushed AMP below short-term support at the $90.00 level. Nimble traders might want to consider trying to buy calls on a dip or a bounce near the rising 10-dma (currently near $89.00). Officially the newsletter is still waiting for a breakout higher. We are suggesting a trigger to buy calls at $91.40. If triggered our multi-week target is $98.50.

Trigger @ 91.40

- Suggested Positions -

Buy the Sep $95 call (AMP1321i95)

Entry on August -- at $---.--
Average Daily Volume = 760 thousand
Listed on August 05, 2013


CR Bard Inc. - BCR - close: 116.42 change: +0.53

Stop Loss: 113.95
Target(s): 119.75
Current Option Gain/Loss: - 22.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/06/13: BCR started the day on a sour note but managed a bounce from the morning lows near $15.25. Shares rebounded strong enough to rally past resistance near $116 and close at new record highs. Our entry trigger to buy calls was hit at $116.25.

- Suggested Positions -

Long Sep $120 call (BCR1321i120) entry $0.90

Entry on August 06 at $116.25
Average Daily Volume = 475 thousand
Listed on August 05, 2013


Capital One Financial - COF - close: 69.29 change: -0.21

Stop Loss: 68.25
Target(s): 74.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/06/13: Financials were not immune to the market's profit taking today. COF flirted with a breakdown under its 10-dma but managed to pare its losses by the closing bell.

There is no change from my earlier comments. We are waiting for a breakout higher. We are suggesting a trigger to buy calls at $70.25. If triggered our target is $74.75.

Trigger @ 70.25

- Suggested Positions -

Buy the Sep $70 call (COF1321i70)

Entry on August -- at $---.--
Average Daily Volume = 3.1 million
Listed on August 01, 2013


Costco Wholesale - COST - close: 119.50 change: -0.57

Stop Loss: 117.90
Target(s): 124.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
08/06/13: COST spent Tuesday's session churning sideways inside the $119-120 zone. If you're in the mood to buy dips then a dip near $118.00 could be an alternative entry point to buy calls. Currently the newsletter is suggesting a trigger to buy calls at $120.25. If triggered our target is $124.75.

NOTE: COST is due to begin trading ex-dividend on August 7th. The dividend should be 31 cents.

Trigger @ 120.25

- Suggested Positions -

buy the Sep $120 call (COST1321i120)

Entry on August -- at $---.--
Average Daily Volume = 1.4 million
Listed on August 03, 2013


Johnson & Johnson - JNJ - close: 93.81 change: +0.01

Stop Loss: 92.75
Target(s): 98.00
Current Option Gain/Loss: Aug.call +17.5% & Sept.call: + 2.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/06/13: When you consider the stock market's widespread pullback today the fact that JNJ managed to close unchanged on the session is a show of relative strength. More conservative traders may want to raise their stop closer to the simple 10-dma currently at $93.34.

- Suggested Positions -

Long Aug $92.50 call (JNJ1317H92.5) entry $1.37

- or -

Long Sep $95 call (JNJ1321i95) entry $0.82

08/03/13 new stop loss @ 92.75
08/01/13 new stop loss @ 92.35
07/31/13 new stop loss @ 91.90

Entry on July 29 at $93.05
Average Daily Volume = 9.0 million
Listed on July 27, 2013


Shire plc - SHPG - close: 110.08 change: -0.37

Stop Loss: 108.95
Target(s): 118.50
Current Option Gain/Loss: -34.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/06/13: Tuesday was a relatively quiet day for SHPG. Yet the stock is flirting with a breakdown below the $110 level. If this market decline continues we could see SHPG dip toward its 10-dma currently near $109.35.

Earlier Comments:
SHPG is overbought at current levels but it can always grow more overbought. I would keep position size small to limit risk.

*small positions* - Suggested Positions -

Long Sep $115 call (SHPG1321i115) entry $2.60

Entry on August 02 at $111.50
Average Daily Volume = 347 thousand
Listed on August 01, 2013


Stericycle, Inc. - SRCL - close: 116.96 change: -0.42

Stop Loss: 115.95
Target(s): 124.00
Current Option Gain/Loss: -29.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
08/06/13: SRCL made news today with the company's acquisition of Eclipse Marketing, which appears to be a customer relationship marketing company in Europe. The news failed to have much impact on shares of SRCL. Readers may want to wait for a new rally above $117.85 before considering new bullish positions.

Earlier Comments:
We suspect that SRCL will not only retest its highs but breakout past the $120 level. If triggered our target is $124.00. I do expect some resistance and a pullback near $120 but we have a four to six week time frame.

- Suggested Positions -

Long Sep $120 call (SRCL1321i120) entry $1.85

Entry on August 05 at $117.35
Average Daily Volume = 334 thousand
Listed on August 03, 2013


PUT Play Updates

Illumina Inc. - ILMN - close: 79.02 change: +0.65

Stop Loss: 80.25
Target(s): 75.25
Current Option Gain/Loss: -10.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/06/13: ILMN ignored the stock market's widespread weakness today and continued to bounce. I am expecting the $80.00 level to act as new resistance. We will adjust our stop loss down to $80.25.

NOTE: Once ILMN fills the gap we can re-evaluate it for a potential bullish entry point.

*small positions* - Suggested Positions -

Long Sep $75 PUT (ILMN1321u75) entry $2.00

08/06/13 new stop loss @ 80.25

Entry on August 01 at $79.50
Average Daily Volume = 1.2 million
Listed on July 31, 2013


iShares Russell 2000 ETF - IWM - close: 104.46 change: -1.06

Stop Loss: 106.05
Target(s): 97.00
Current Option Gain/Loss: -31.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/06/13: The small cap ETF dropped quickly this morning but found support near its 10-dma. Shares spent the rest of the session drifting sideways. The move back below $105.00 is arguably short-term bearish but I am not suggesting new bearish positions at this time.

- Suggested Positions -

Long Sep $100 PUT (IWM1321u100) Entry $1.48

08/03/13 readers may want to consider an early exit

Entry on July 30 at $103.69
Average Daily Volume = 31 million
Listed on July 29, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 58.93 change: -1.17

Stop Loss: 55.75
Target(s): 74.50
Current Option Gain/Loss: -21.5%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
08/06/13: Ouch! It was not a good day for CBI. The stock initially tried to rally but quickly reversed lower and underperformed the market with a -1.9% decline. My recent fears about CBI's bearish trading seem to be coming to fruition. We did expect technical support near its 100-dma, which is where the stock stalled this afternoon.

I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

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

07/20/13 new stop loss @ 55.75
06/29/13 CBI might be poised to dip into the $57-55 zone again.
06/24/13 triggered @ 56.75
06/22/13 adjust entry trigger to $56.75
06/15/13 entry strategy change: change the breakout trigger at $65.25 to a buy-the-dip trigger at $56.50. Adjust the stop loss to $53.75.
Adjust the option strike to the 2014 Jan. $65 call

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


CLOSED BULLISH PLAYS

United Technologies - UTX - close: 105.20 change: -1.44

Stop Loss: 104.90
Target(s): 109.85
Current Option Gain/Loss: -44.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/06/13: Our buy the dip strategy on UTX didn't work out as we had hoped. Shares did indeed dip as expected but the pullback was deeper than we were looking for. The stock broke down below its simple 10-dma today and violated the $105.00 mark. Our trade opened on the gap down at $106.45 (because our trigger was $106.50) and UTX hit our stop loss at $104.90.

We are still bullish on UTX and will re-add it to the new play section tonight.

- Suggested Positions -

Sep $110 call (UTX1321i110) entry $0.81 exit $0.45 (-44.4%)

08/06/13 stopped out at $104.90
08/06/13 triggered on gap down at $106.45, trigger was 106.50

chart:

Entry on August -- at $---.--
Average Daily Volume = 3.2 million
Listed on August 03, 2013


Xilinx Inc. - XLNX - close: 45.56 change: -0.57

Stop Loss: 45.45
Target(s): 49.85
Current Option Gain/Loss: -65.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/06/13: The SOX semiconductor index slipped -0.7% today. Unfortunately XLNX underperformed its peers with a -1.23% decline. The stock hit our stop loss at $45.45 at its low for the day.

Earlier Comments:
I would keep our position size small since bears could argue that XLNX is overbought with a significant six-week rally already underway.

*small positions* - Suggested Positions -

Aug $46 call (XLNX1317H46) entry $1.06 exit $0.37 (-65.0%)

08/06/13 stopped out
08/03/13 new stop loss @ 45.45

chart:

Entry on July 31 at $46.65
Average Daily Volume = 3.5 million
Listed on July 25, 2013