Editor's Note:

The S&P 500 index has fallen to new six-week lows with its fifth decline out of the last six sessions. The Dow Jones Industrial Average is down six trading days in a row and has closed below round-number, psychological support at the 15,000 mark.

LL has been triggered.


Current Portfolio:


CALL Play Updates

Alliant Techsystems - ATK - close: 99.01 change: -1.34

Stop Loss: 97.90
Target(s): 108.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 9 weeks
New Positions: Yes, see below

Comments:
08/21/13: After showing relative strength yesterday ATK failed to see any follow through today. The stock gave back a large chunk of Tuesday's gains with a -1.3% decline. The stock should find short-term support near $98.00. Currently we are on the sidelines.

The recent high is near $101.00. We are suggesting a trigger to buy calls at $101.25. If triggered our target is $108.00. The option spreads on ATK are a little bit wide therefore I am suggesting we use small positions to limit our risk.

Trigger @ 101.25 *small positions*

- Suggested Positions -

buy the Nov $105 call (ATK1316k105)

Entry on August -- at $---.--
Average Daily Volume = 462 thousand
Listed on August 20, 2013


Lumber Liquidators - LL - close: 99.50 change: +3.35

Stop Loss: 97.25
Target(s): 108.00
Current Option Gain/Loss: -15.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/21/13: Lowe's (LOW) reported earnings this morning and delivered a bullish report by beating both the top and bottom line estimates. LOW's management also raised their guidance. This gave the home improvement stocks a boost and shares of LL hit new all-time highs. LL hit $101.74 intraday. Unfortunately the stock gave back a majority of its gains and the breakout past resistance at $100.00 suddenly looks like a potential bull-trap pattern. Our trigger to buy calls was hit at $100.25 and I would wait for a new move above $100.25 before initiating new positions again. If LL sees a dip tomorrow we can watch for support near $98.00.

Earlier Comments:
A breakout past the $100 level could spark some short covering. The most recent data listed short interest at 25% of the small 26.2 million share float.

Our target is $108.00. More conservative traders may want to exit near $105.00 instead.

- Suggested Positions -

Long Sep $105 call (LL1321i105) entry $2.20

Entry on August 21 at $100.25
Average Daily Volume = 611 thousand
Listed on August 20, 2013


Shire plc - SHPG - close: 114.02 change: -0.09

Stop Loss: 109.40
Target(s): 118.50
Current Option Gain/Loss: +19.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/21/13: Traders stepped in to buy the dip in SHPG about lunchtime (near $113). The afternoon rebound is bullish and leaves SHPG poised to set new closing highs tomorrow. 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


SINA Corp. - SINA - close: 79.41 change: -0.47

Stop Loss: 77.49
Target(s): 89.00
Current Option Gain/Loss: -40.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/21/13: I am turning more cautious on SINA. The stock continues to hover near the $80 level and short-term support at the 10-dma. The MACD indicator on the daily chart has turned bearish. More conservative trades may want to abandon ship early. I am adjusting our stop loss from $77.70 to $77.49.

I am not suggesting new positions at the moment.

- Suggested Positions -

Long Sep $85 call (SINA1321i85) entry $2.75

08/21/13 adjust stop loss from $77.70 to $77.49

Entry on August 19 at $81.35
Average Daily Volume = 2.9 million
Listed on August 17, 2013


PUT Play Updates

Apache Corp. - APA - close: 77.22 change: +0.95

Stop Loss: 80.55
Target(s): 71.00
Current Option Gain/Loss: +31.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/21/13: APA continues to see an oversold bounce in spite of continued weakness in the energy sector. I cautioned readers yesterday that if APA bounces we can watch for resistance near $78 and near $80. More conservative investors might want to adjust their stop loss accordingly.

FYI: The Point & Figure chart for APA is bearish with a $72 target.

- Suggested Positions -

Long Oct $75 PUT (APA1319v75) entry $1.60

08/19/13 trade opened on gap down at $78.42. Trigger was $78.75

Entry on August 19 at $78.42
Average Daily Volume = 2.6 million
Listed on August 17, 2013


Boeing Company - BA - close: 103.91 change: -0.72

Stop Loss: 105.55
Target(s): 100.25
Current Option Gain/Loss: -32.0%
Time Frame: 1 to 2 weeks
New Positions: see below

Comments:
08/21/13: BA's intraday bounce attempt continues to respect the three-week trend of lower highs. Today's move could be used as a new entry point to buy puts on BA.

- 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: 52.58 change: -0.11

Stop Loss: 54.25
Target(s): 50.25
Current Option Gain/Loss: - 9.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/21/13: The late day spike higher in DLR failed near $53.50 and shares eventually closed negative for the session. I am tempted to say the oversold bounce is over but that's just speculation. The next level of overhead resistance remains the $54.00 level. I am not suggesting new positions at this time.

The value of our Sep. $50 put is unchanged.

Earlier Comments:
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

08/19/13 new stop loss @ 54.25

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


Hanesbrands Inc. - HBI - close: 60.76 change: +1.37

Stop Loss: 60.60
Target(s): 55.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/21/13: I could not find any news to explain the sudden show of relative strength in HBI today. The spike lower this morning hit a new relative low but did not hit our suggested entry point at $58.95. The rebound higher had HBI testing its 10 and 20-dma this afternoon. Technically today's bounce has created a bullish engulfing candlestick reversal pattern but we'll have to wait and see if there is any follow through. At the moment our plan is unchanged.

We are suggesting a trigger to buy puts at $58.95. If triggered our target is $55.25.

Trigger @ 58.95

- Suggested Positions -

buy the Sep $55 PUT (HBI1321u55)

Entry on August -- at $---.--
Average Daily Volume = 1.1 million
Listed on August 20, 2013


iShares Russell 2000 ETF - IWM - close: 101.48 change: -0.62

Stop Loss: 104.25
Target(s): 98.50
Current Option Gain/Loss: +12.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/21/13: It was a very volatile afternoon for the market. Stocks were getting whipsawed back and forth as investors tried to interpret the Fed's minutes from the last meeting and what that might mean for future QE tapering.

I am not suggesting new bearish positions at this time.

- Suggested Positions -

Long Sep $100 PUT (IWM1321u100) Entry $1.48

08/19/13 new stop loss @ 104.25
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


Monsanto Co. - MON - close: 94.81 change: -1.07

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:
08/21/13: MON's early morning rally attempt failed. The stock closed the session sitting on support near $94.75. Shares look poised to breakdown from its current trading range.

So far the August low has been $94.56. We are suggesting a trigger to buy puts at $94.40. If triggered our short-term target is $90.25. More aggressive traders could certainly aim lower since the P&F chart is forecasting an $84 target.

Trigger @ 94.40

- Suggested Positions -

Buy the Sep $90 PUT (MON1321u90) current ask $0.73

Entry on August -- at $---.--
Average Daily Volume = 3.3 million
Listed on August 19, 2013


Time Warner Cable - TWC - close: 108.15 change: -0.71

Stop Loss: 111.60
Target(s): 105.00
Current Option Gain/Loss: - 8.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/21/13: TWC spent most of the day churning sideways inside the $108-109 zone. The market volatility following the Fed minutes did see TWC spike through both sides of this trading range before settling near its lows.

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

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: 59.30 change: -0.86

Stop Loss: 55.75
Target(s): 74.50
Current Option Gain/Loss: -33.3%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
08/21/13: It was a disappointing session for CBI with a -1.4% decline and a close back below the $60 level. Shares are once again testing their 100-dma. If the market weakness continues we could see CBI drop back toward its June low near $56.00 and our stop loss at $55.75.

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


Vanguard FTSE Europe ETF - VGK - close: 52.24 change: -0.54

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:
08/21/13: It is starting to look like the upward momentum in the VGK is fading. This ETF produced a six-week rally but shares stalled last week (closing unchanged for the week). Currently the VGK is poised for its first weekly loss since its June lows.
I don't see any changes from my earlier 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)

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