Editor's Note:

Positive economic news was seen as new fuel for the Fed to taper in September. Combine that with some disappointing earnings reports last night and traders were in a mood to sell.

BCR, EBAY, JAZZ, PII, QIHU, UTX were all stopped out.
LMT, TMO, and MON have been removed.
BA was triggered.


Current Portfolio:


CALL Play Updates

Conns Inc. - CONN - close: 64.79 change: -2.88

Stop Loss: 64.40
Target(s): 74.00
Current Option Gain/Loss: -35.1%
Time Frame: exit PRIOR to earnings in early September
New Positions: see below

Comments:
08/15/13: Ouch! The combination of a down market and bearish news in the retail sector hit CONN pretty hard. CONN underperformed the market with a sharp -4.25% decline. The stock closed below what should have been short-term support near $66, the 10-dma, and the $65.00 level. This doesn't bode well for tomorrow. The intraday low today was $64.56 and our stop loss is at $64.40.

Earlier Comments:
If the rally continues CONN could see more short covering. The most recent data listed short interest at more than 18% of the small 24.1 million share float. Our short-term target is $74.00. However, more conservative traders may want to exit near $70.00, which might be round-number resistance.

- Suggested Positions -

Long Sep $70 call (CONN1321i70) entry $2.70

Entry on August 12 at $66.65
Average Daily Volume = 394 thousand
Listed on August 10, 2013


Shire plc - SHPG - close: 110.69 change: -0.53

Stop Loss: 109.40
Target(s): 118.50
Current Option Gain/Loss: -40.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/15/13: SHPG held up reasonably well. The stock gapped down but traders bought the dip near support at $110.00. SHPG managed to pare its losses to just -0.4% versus a -1.7% drop in the NASDAQ. I am not suggesting new positions.

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

*small positions* - Suggested Positions -

Long Sep $115 call (SHPG1321i115) entry $2.60

08/10/13 new stop loss @ 109.40

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


Under Armour, Inc. - UA - close: 70.60 change: -2.70

Stop Loss: 69.75
Target(s): 74.75
Current Option Gain/Loss: -10.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15/13: Ouch! After today's -3.6% decline I'm wish we had taken my own suggestion to exit a couple of days ago. UA was a big target for profit taking after hitting all-time highs earlier in the week. The breakdown below its simple 10-dma is short-term bearish today. The next level of support should be the $70.00 mark.

- Suggested Positions -

Long Sep $72.50 call (UA1321i72.5) entry $1.85

08/14/13 new stop loss @ 69.75
08/12/13 readers may want to take profits now
option bid at $3.30
08/10/13 new stop loss @ 69.25

Entry on August 08 at $70.50
Average Daily Volume = 1.3 million
Listed on August 06, 2013


PUT Play Updates

Boeing Company - BA - close: 102.73 change: -1.43

Stop Loss: 105.55
Target(s): 100.25
Current Option Gain/Loss: + 8.0%
Time Frame: 1 to 2 weeks
New Positions: see below

Comments:
08/15/13: BA traded lower as we expected. Unfortunately the market's sharp decline at the open pushed BA to gap down at $103.19. That was below our suggested entry point at $103.75. Broken support at the 50-dma (currently near $104.00) should be new resistance. Nimble traders might want to look for a bounce back into the $103.25-104.00 zone as a new entry point to buy puts.

Our target is $100.25. More aggressive traders may want to aim lower.

- Suggested Positions -

Long Sep $100 PUT (BA1321u100) entry $1.75

08/15/13 trade opened on gap down at $103.19. Trigger was $103.75

Entry on August 15 at $103.19
Average Daily Volume = 4.6 million
Listed on August 14, 2013


Digital Realty Trust - DLR - close: 53.38 change: -0.87

Stop Loss: 55.35
Target(s): 50.25
Current Option Gain/Loss: + 9.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15/13: The market weakness today helped push DLR to a new low for the year with a -1.6% decline. I would still consider new bearish positions at current levels.

Earlier Comments:
If triggered our short-term target is $50.25. More aggressive traders may want to aim lower since the Point & Figure chart for DLR is bearish with a $42 target.

- Suggested Positions -

Long Sep $50 PUT (DLR1321u50) entry $1.05

Entry on August 14 at $53.75
Average Daily Volume = 1.8 million
Listed on August 13, 2013


iShares Russell 2000 ETF - IWM - close: 102.11 change: -1.93

Stop Loss: 106.05
Target(s): 98.50
Current Option Gain/Loss: + 7.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/15/13: The market's widespread decline pushed the small cap IWM to a -1.85% loss. If you look hard enough the ETF has created a bearish H&S pattern over the last three weeks.

There is potential support at the 50-dma (near 101.00) and the $100 mark. Yet we are aiming for the 100-dma, which is currently near $98.00. Tonight I am adjusting our exit target from $97.00 to $98.50.

I am not suggesting new bearish positions at this time.

- Suggested Positions -

Long Sep $100 PUT (IWM1321u100) Entry $1.48

08/15/13 adjust exit target from $97.00 to $98.50
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: 60.40 change: +0.00

Stop Loss: 55.75
Target(s): 74.50
Current Option Gain/Loss: -11.7%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
08/15/13: CBI managed to rebound from its morning lows and close unchanged on the session.

*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


Vanguard FTSE Europe ETF - VGK - close: 52.95 change: -0.27

Stop Loss: 51.25
Target(s): 58.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to 2013 December option expiration
New Positions: Yes, see below

Comments:
08/15/13: VGK gapped down this morning but traders bought the dip at its rising 20-dma. The midday rebound carried the ETF back toward the $53 level and back above its 10-dma.

Earlier Comments:
We are taking a multi-month time frame with this trade. I am suggesting we wait for the VGK to close above $53.50 and then buy calls the next morning. If we are triggered our target is $58.50 but we'll adjust it as the trade progresses.

FYI: The Point & Figure chart for VGK is bullish with a $63 target.

Trigger: Wait for a close above $53.50, then buy calls the next morning.

- Suggested Positions -

Buy the 2013 Dec $55 call (VGK1322L55)

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


CLOSED BULLISH PLAYS

CR Bard Inc. - BCR - close: 113.47 change: -1.94

Stop Loss: 114.65
Target(s): 119.75
Current Option Gain/Loss: -94.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15/13: The stock market's widespread sell-off today pushed BCR below support near $115.00. Our stop loss was hit at $114.65. Shares settled on their simple 30-dma with a -1.68% loss on the session.

- Suggested Positions -

Long Sep $120 call (BCR1321i120) entry $0.90 exit $0.05 (-94.4%)

08/15/13 stopped out
08/10/13 new stop loss @ 114.65

chart:

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


eBay Inc. - EBAY - close: 53.18 change: -1.05

Stop Loss: 52.75
Target(s): 57.00
Current Option Gain/Loss: -41.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15/13: There were stories out this morning that Facebook (FB) might introduce a mobile payment platform. Wall Street took that news as a potential rival to EBAY's dominant PayPal business. The combination of a down market and potential competition pushed shares of EBAY to cap open lower at $53.39. The stock quickly spiked lower below its 200-dma and hit our stop loss at $52.75 before bouncing back.

- Suggested Positions -

Sep $55 call (EBAY1321i55) entry $1.25 exit $0.73 (-41.6%)

08/15/13 stopped out

chart:

Entry on August 13 at $54.15
Average Daily Volume = 12.0 million
Listed on August 08, 2013


Jazz Pharmaceuticals - JAZZ - close: 78.90 change: -2.06

Stop Loss: 79.75
Target(s): 88.00
Current Option Gain/Loss: -46.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15/13: JAZZ followed the market lower. Shares actually gapped lower at $80.21 and then spiked down to $77.25 before paring its losses. Our stop was hit early today at $79.75.

- Suggested Positions -

Sep $85 call (JAZZ1321i85) entry $2.45* exit $1.30**(-46.9%)

08/15/13 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on August 13 at $82.35
Average Daily Volume = 700 thousand
Listed on August 12, 2013


Lockheed Martin Corp. - LMT - close: 122.13 change: -1.49

Stop Loss: 123.45
Target(s): 129.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15/13: The nearly bulletproof defense stocks were unable to avoid today's market sell-off. LMT lost -1.2% and broke down below its simple 10-dma. Our trade has not opened yet with our suggested trigger at $125.25. Tonight we are removing LMT as a candidate. Readers may want to keep LMT on their watch list. A bounce from the $120.00 level might prove to be a new bullish entry point.

Trade did not open.

08/15/13 removed from the newsletter

chart:

Entry on August -- at $---.--
Average Daily Volume = 1.6 million
Listed on August 07, 2013


Polaris Industries - PII - close: 113.17 change: -2.80

Stop Loss: 113.40
Target(s): 119.75
Current Option Gain/Loss: -48.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15/13: Today's move in PII was a reaction to the sharp drop in the market's major indices. The stock gapped open lower and quickly spiked down toward the $113 area. Our stop was hit at $113.40.

- Suggested Positions -

Sep $120 call (PII1321i120) entry $1.65 exit $0.85 (-48.4%)

08/15/13 stopped out

chart:

Entry on August 13 at $116.25
Average Daily Volume = 829 thousand
Listed on August 06, 2013


Qihoo 360 Technology - QIHU - close: 62.54 change: -4.80

Stop Loss: 66.49
Target(s): 74.50
Current Option Gain/Loss: -47.8%
Time Frame: Exit PRIOR to earnings on Aug. 26th
New Positions: see below

Comments:
08/15/13: It looks like bulls were in a rush to sell given the market's weak open this morning. The panic to lock in profits after QIHU's stellar run produced a very sharp decline today (-7.1%). The stock gapped open lower at $66.12, which was below our stop loss at $66.49, so our trade was closed immediately.

Earlier Comments:
This is an aggressive, higher-risk momentum trade. We are suggesting small positions.

*small positions, higher-risk trade* - Suggested Positions -

Sep $75 call (QIHU1321i75) entry $4.10 exit $2.14 (-47.8%)

08/15/13 stopped out on gap down at $66.12. Stop was $66.49

chart:

Entry on August 13 at $70.25
Average Daily Volume = 2.2 million
Listed on August 10, 2013


Thermo Fisher Scientific, Inc. - TMO - close: 91.30 change: -0.76

Stop Loss: 91.25
Target(s): 98.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
08/15/13: The profit taking in TMO wasn't that bad today (only -0.8% vs. -1.4% in the S&P 500). Yet shares did break down below the short-term bullish trend of higher lows. Our trade has not opened yet with our suggested entry point at $92.75. Tonight we are removing TMO as a candidate.

Trade did not open.

08/15/13 removed from the newsletter.

chart:

Entry on August -- at $---.--
Average Daily Volume = 1.57 million
Listed on August 13, 2013


United Technologies - UTX - close: 102.99 change: -2.07

Stop Loss: 104.45
Target(s): 109.75
Current Option Gain/Loss: -33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/15/13: The big cap blue chip stocks in the Dow Industrials were prime targets for profit taking today. The DJIA lost more than -225 points. Meanwhile shares of UTX gapped open lower at $103.96 and closed with a -1.97% decline. Our stop loss was $104.45 so the gap down immediately closed our play.

*small positions* - Suggested Positions -

Sep $105 call (UTX1321i105) entry $2.40 exit $1.60 (-33.3%)

08/15/13 stopped out on gap down at $103.96. Stop was $104.45
08/10/13 new stop loss @ 104.45

chart:

Entry on August 07 at $105.55
Average Daily Volume = 3.2 million
Listed on August 03, 2013


CLOSED BEARISH PLAYS

Monsanto Co. - MON - close: 98.05 change: +1.03

Stop Loss: 96.25
Target(s): 90.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/15/13: MON is not cooperating. Shares bucked the market's weakness today and posted a +1.0% gain. Our trade has not opened yet with a suggested entry trigger at $94.40. Tonight we're removing MON as a candidate.

Trade did not open.

08/15/13 removed from the newsletter

chart:

Entry on August -- at $---.--
Average Daily Volume = 3.1 million
Listed on August 12, 2013