Editor's Note:

The U.S. market managed a bounce following a two-day decline. Yet the S&P 500 index struggled with resistance near 1640 today. Investors remain worried about U.S. involvement in Syria.

RGR was triggered. MCD was stopped out.


Current Portfolio:


CALL Play Updates

Sturm, Ruger & Co. Inc. - RGR - close: 52.75 change: +0.43

Stop Loss: 49.95
Target(s): 57.50
Current Option Gain/Loss: - 7.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
08/28/13: Our new play on RGR was triggered this morning. Unfortunately I can't find any headlines to explain the gap open higher this morning. Shares opened higher and spiked toward $54 before paring its gains. RGR did outperform the market with a +0.8% gain but the gap higher hurt our entry point. We wanted to buy calls at $52.65 but RGR opened at $53.45.

Earlier Comments:
If this rally continues it could spark a short squeeze. The most recent data listed short interest at 30% of the very small 18.8 million share float.

- Suggested Positions -

Long Oct $55 call (RGR1319j55) entry $1.24

08/28/13 trade opened on gap higher at $53.45. Trigger was 52.65

Entry on August 28 at $53.45
Average Daily Volume = 341 thousand
Listed on August 27, 2013


PUT Play Updates

DaVita HealthCare - DVA - close: 108.02 change: -0.72

Stop Loss: 112.15
Target(s): 105.25
Current Option Gain/Loss: + 40.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/28/13: The weakness in DVA continued with a -0.6% drop today. This is a new low for the year.

Earlier Comments:
Our short-term target is $105.25. More aggressive traders could aim lower since the Point & Figure chart for DVA is bearish with a $96 target.

FYI: Investors should note that DVA does have a 2-for-1 split coming up on September 9th.

- Suggested Positions -

Long Sep $110 PUT (DVA1321u110) entry $2.20*

08/27/13 trade opens on gap down at $109.95
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on August 27 at $109.95
Average Daily Volume = 833 thousand
Listed on August 26, 2013


iShares Russell 2000 ETF - IWM - close: 100.96 change: +0.20

Stop Loss: 105.25
Target(s): 99.00
Current Option Gain/Loss: +11.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/28/13: After the sharp decline yesterday most of the market produced a bounce. The IWM added 20 cents. There is no change from my prior comments.

The next challenge for the bears is potential support at the $100 mark. If the $100 level fails then the next level of support is the simple 100-dma current at 98.65.

- Suggested Positions -

Long Sep $100 PUT (IWM1321u100) Entry $1.48

08/27/13 adjust exit target to $99.00
08/24/13 new stop loss @ 105.25
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


ManpowerGroup Inc. - MAN - close: 65.40 change: +0.56

Stop Loss: 67.05
Target(s): 61.00
Current Option Gain/Loss: - 5.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/28/13: MAN recovered about a quarter of yesterday's decline. Broken support near $66.00 should be new short-term overhead resistance.

- Suggested Positions -

Long Sep $65 PUT (MAN1321u65) entry $1.70

Entry on August 27 at $65.75
Average Daily Volume = 530 thousand
Listed on August 21, 2013


Sherwin-Williams Co. - SHW - close: 169.37 change: +2.17

Stop Loss: 170.25
Target(s): sell half at 161.00, then exit the rest at $156.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/28/13: SHW managed a bounce today but it only recovered about half of yesterday's losses. Furthermore it looks like the bounce is failing near resistance at $170.00 and its simple 200-dma. There is no change from my earlier comments.

Earlier Comments:
SHW's long-term up trend is in serious jeopardy. The Point & Figure chart has turned bearish and is forecasting a $136 target.

The recent lows are near $166.00. We are suggesting a trigger to buy puts at $165.90. If triggered you could target a drop toward $160.00 and its 300-dma. I am suggesting we plan on exiting half of our position at $161.00. We'll plan on exiting the remain of our position at $156.00.

Trigger @ 165.90

- Suggested Positions -

Buy the Sep $160 PUT (SHW1321u160)

Entry on August -- at $---.--
Average Daily Volume = 781 thousand
Listed on August 27, 2013


Time Warner Cable - TWC - close: 108.03 change: +0.99

Stop Loss: 111.60
Target(s): 105.00
Current Option Gain/Loss: -31.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/28/13: There were new headlines today that the FCC was stepping in to mediate the feud between CBS Corp. (CBS) and TWC. The disagreement has left three million TWC customers without CBS programming since August 2nd (source: Bloomberg). Shares of TWC really didn't move much on the news or the fact that TWC began trading ex-dividend this morning.

I am not suggesting new positions. More conservative traders may want to scale back their position size even further.

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: 60.97 change: +0.55

Stop Loss: 55.75
Target(s): 74.50
Current Option Gain/Loss: -15.6%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
08/28/13: CBI outperformed the broader market with a +0.9% gain. There is no change from my earlier comments.

*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: 51.72 change: -0.06

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:
08/28/13: It was a rough day for European stocks. Almost all of the major markets closed in negative territory. This weakness sparked a gap down in the VGK this morning but the ETF managed to bounce off its morning lows. Shares are down three days in a row. There is no change 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 2014 Mar $55 call (VGK1422L55)

08/24/13 adjust the option strike from 2013 Dec $55 to $2014 Mar $55.

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


CLOSED BEARISH PLAYS

McDonald's Corp. - MCD - close: 96.08 change: +1.24

Stop Loss: 96.05
Target(s): 90.50
Current Option Gain/Loss: -46.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/28/13: MCD spent over a week not showing much volatility as it consolidated sideways in the $95-96 zone. The stock underperformed the market when the market was bouncing. Then when stocks reversed lower MCD did not perform as we expected. The last couple of days have been characterized by very brief but volatile spikes following the opening bell. Yesterday it was a spike lower toward its 300-dma. Today it was a spike higher up and through resistance near $96.00. Our stop was hit at $96.05.

- Suggested Positions -

Sep $92.50 PUT (MCD1321u92.5) entry $0.77 exit $0.41 (-46.7%)

08/28/13 stopped out at $96.05

chart:

Entry on August 27 at $94.75
Average Daily Volume = 4.8 million
Listed on August 24, 2013