Editor's Note:

Friday's close marked a two-week decline for the U.S. stock market. The S&P 500 is testing its 50-dma while yields on the 10-year U.S. bond hit two-year highs.

CONN and UA were stopped out. TWC was triggered.


Current Portfolio:


CALL Play Updates

Shire plc - SHPG - close: 112.85 change: +2.16

Stop Loss: 109.40
Target(s): 118.50
Current Option Gain/Loss: + 5.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/17/13: SHPG continues to march to the beat of its own drum and that drumbeat was higher on Friday. The stock gapped open higher on Friday morning and continued to drift higher throughout the session. Then late on Friday there was a huge spike from about $112.25 to $116.00 before profit taking pulled shares back down under the $113 level. SHPG ended the session with a +1.9% gain. The rally was accompanied by a surge in volume as well. I couldn't find any catalyst to explain the surge higher.

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

5-minute chart:

daily chart:

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


PUT Play Updates

Boeing Company - BA - close: 103.47 change: +0.74

Stop Loss: 105.55
Target(s): 100.25
Current Option Gain/Loss: -13.1%
Time Frame: 1 to 2 weeks
New Positions: see below

Comments:
08/17/13: BA erased about half of Thursday's losses with a bounce on Friday. Yet the rebound stalled exactly where we expected it would with resistance near $104.00 and its 50-dma. Traders can use Friday's bounce as a new entry point to buy puts. More conservative traders may want to lower their stop loss closer to the $104.00 level.

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

chart:

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


Digital Realty Trust - DLR - close: 52.30 change: -1.08

Stop Loss: 55.35
Target(s): 50.25
Current Option Gain/Loss: +14.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/17/13: REIT stocks have been getting crushed lately. Shares of DLR continued to sink on Friday with a -2.0% decline and a new 18-month low. I am surprised that our put option did not see a bigger gain on Friday.

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

chart:

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


iShares Russell 2000 ETF - IWM - close: 101.68 change: -0.43

Stop Loss: 106.05
Target(s): 98.50
Current Option Gain/Loss: + 8.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/17/13: The Russell 2000's performance on Friday was almost an exact copy of the S&P 500's with stocks moving lower again on Friday afternoon.

The Russell 2000 and the IWM could see support at the rising 50-dma. The IWM might also see potential support at the $100.00 level. Yet we are aiming for $98.50. Right now we're expecting a drop towards technical support at its rising 100-dma (currently near $98.00).

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

chart:

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


Time Warner Cable - TWC - close: 109.94 change: -0.27

Stop Loss: 111.60
Target(s): 105.00
Current Option Gain/Loss: -19.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/17/13: TWC continued to sink on Friday but actual losses were pretty mild. The stock did breakdown below short-term support at $110 and its 50-dma but it was not a very convincing breakdown. Our trigger to buy puts was hit at $109.50. Readers may want to wait for a new drop below Friday's low of $109.37 before initiating new positions.

Earlier Comments:
We do want to keep our position size small. There is potential support at $108.00. The next level of support is $104.00. If we are triggered at $109.50, our target is $105.00.

- Suggested Positions -

Long Sep $105 PUT (TWC1321u105) entry $2.35

chart:

Entry on August 16 at $109.50
Average Daily Volume = 2.3 million
Listed on August 15, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 61.27 change: +0.87

Stop Loss: 55.75
Target(s): 74.50
Current Option Gain/Loss: - 1.9%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
08/17/13: Traders have been in a buy-the-dip mood with CBI the last few days. Shares displayed relative strength on Friday morning with a surge to new three-week highs.

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

chart:

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


Vanguard FTSE Europe ETF - VGK - close: 53.09 change: +0.14

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:
08/17/13: After an 18-month recession the Eurozone GDP finally turned positive again with a +0.3% growth rate. The recent bullishness for Europe has been tempered somewhat by several analysts telling investors to be cautious on Europe since many of its core problems remain. Yet the overall up trend for the VGK remains intact. Traders bought the dip on Thursday at its rising 20-dma. This ETF remains near a closing high for the year. I don't see any changes from my prior comments.

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) current ask $1.25

chart:

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


CLOSED BULLISH PLAYS

Conns Inc. - CONN - close: 64.17 change: -0.62

Stop Loss: 64.40
Target(s): 74.00
Current Option Gain/Loss: -40.7%
Time Frame: exit PRIOR to earnings in early September
New Positions: see below

Comments:
08/17/13: The profit taking in CONN continued on Friday and shares slipped to a new low for the week. CONN is now testing its 20-dma. Our stop loss was hit at $64.40.

The long-term trend is still higher and readers may want to keep CONN on their watch list for a dip near $60.00 or its 50-dma as a potential bullish entry point.

- Suggested Positions -

Sep $70 call (CONN1321i70) entry $2.70 exit $1.60 (-40.7%)

08/16/13 stopped out

chart:

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


Under Armour, Inc. - UA - close: 68.93 change: -1.67

Stop Loss: 69.75
Target(s): 74.75
Current Option Gain/Loss: -27.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/17/13: Shares of UA are reversing sharply. The three-day plunge has erased more than $5.00 from the stock and reversed almost two weeks of gains. Friday's sell-off (-2.3%) also broke down below the $70.00 level and hit our stop loss at $69.75.

- Suggested Positions -

Sep $72.50 call (UA1321i72.5) entry $1.85 exit $1.35 (-27.0%)

08/16/13 stopped out
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

chart:

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