Editor's Note:

Concerns over a potential U.S. strike on Syria continued to pressure the stock market on Friday and equities closed near their lows for the session.

EBAY was triggered. We have adjusted our entry strategy on SHW.


Current Portfolio:


CALL Play Updates

Sturm, Ruger & Co. Inc. - RGR - close: 52.37 change: -0.78

Stop Loss: 49.95
Target(s): 57.50
Current Option Gain/Loss: -11.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
08/31/13: RGR's early morning rally attempt failed making it the second time in three days that RGR failed to breakout over its 20-dma. The stock followed the markets lower and closed near its lows (near its 30-dma). Look for potential short-term support near $52.00 and if that level fails then potential support at the 40 or 50-dma.

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

chart:

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


PUT Play Updates

Diamond Offshore Drilling - DO - close: 64.03 change: -0.14

Stop Loss: 66.01
Target(s): 57.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
08/31/13: DO continued to sink on Friday and shares flirted with a breakdown under support near $64.00. Yet the stock did not hit our suggested entry trigger at $63.75. The low was $63.92. DO does look poised to keep sliding. There is no change from my new play write up on Thursday night.

Earlier Comments:
I am suggesting a trigger to buy puts at $63.75. If triggered our target is the $57.50 level. I would not be surprised to see a temporary bounce near the $60.00 mark.

Trigger @ 63.75

- Suggested Positions -

Buy the Oct $60 PUT (DO1319v60) current ask $0.81

chart:

Entry on August -- at $---.--
Average Daily Volume = 1.0 million
Listed on August 28, 2013


DaVita HealthCare - DVA - close: 107.51 change: -0.51

Stop Loss: 110.51
Target(s): 105.25
Current Option Gain/Loss: + 54.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/31/13: DVA continued to sink on Friday with a -0.4% decline. This is a new low for the year. The early 2012 December lows near $105.00 could be support. That's why we're aiming for $105.25. More conservative traders may want to take profits now with our option up +54%.

Keep in mind that we'll most likely close this trade before next Friday to avoid holding over the stock split.

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*

08/29/13 new stop loss @ 110.51
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.

chart:

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


eBay Inc. - EBAY - close: 49.99 change: -1.00

Stop Loss: 51.75
Target(s): 46.00
Current Option Gain/Loss: - 8.1%
Time Frame: exit PRIOR to September option expiration
New Positions: see below

Comments:
08/31/13: It looks like EBAY's attempt at another oversold bounce has failed at its 10-dma. The stock underperformed on Friday with a -1.9% decline and a breakdown below round-number, psychological support at the $50.00 mark. Our suggested entry point at $49.75 was hit midday.

The low on Friday was $49.62. More conservative traders might want to wait for a new drop under $49.60 before initiating positions.

Earlier Comments:
Our target is $46.00. More aggressive traders may want to aim lower.

NOTE: We are listing the September puts, which expire in less than four weeks. You might want to play the Octobers instead.

- Suggested Positions -

Long Sep $50 PUT (EBAY1321u50) entry $1.35

chart:

Entry on August 30 at $49.75
Average Daily Volume = 8.2 million
Listed on August 28, 2013


iShares Russell 2000 ETF - IWM - close: 100.38 change: -1.59

Stop Loss: 103.25
Target(s): 99.00
Current Option Gain/Loss: +14.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/31/13: The small cap ETF underperformed its large cap rivals with a -1.5% decline on Friday. The IWM also completely erased Thursday's bounce. It is possible that the $100.00 level could be round-number support. This ETF might try and bounce again. Currently our target is $99.00, which is very close to potential technical support at the rising 100-dma.

We are going to try and reduce our risk by moving the stop loss down to $103.25.

- Suggested Positions -

Long Sep $100 PUT (IWM1321u100) Entry $1.48

08/31/13 new stop loss @ 103.25
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

chart:

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


ManpowerGroup Inc. - MAN - close: 64.85 change: -1.13

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:
08/31/13: It looks like MAN's attempt at an oversold bounce has failed at its simple 10-dma. Shares closed near their lows on Friday and look poised to keep falling. Keep in mind that we only have three weeks left on our September puts.

- Suggested Positions -

Long Sep $65 PUT (MAN1321u65) entry $1.70

chart:

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


Sherwin-Williams Co. - SHW - close: 172.40 change: +0.35

Stop Loss: 176.05
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:
08/31/13: We are adjusting our entry point strategy on SHW. The stock's recent bounce from the $166 level has failed under resistance near $175.00 and its 50-dma. We are suggesting traders buy puts now, following Friday's intraday reversal. The 50-dma is at $175.73. We'll start with a stop loss at $176.05. Our targets remain unchanged.

NOTE: I am adjusting our option strike price from September $160 to $165s. I'm also adding the October $165 puts.

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.

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.

- Suggested Positions -

Buy the Sep $165 PUT (SHW1321u165) current ask $155

- or -

Buy the Oct $165 PUT (SHW1319v165) current ask $3.50

08/31/13 entry point strategy change: buy puts now following Friday's intraday reversal.
Adjust the stop loss to $176.05
Adjust the option strike from Sep $160 to 165 put.
Previous plan was an entry trigger at $165.90.

chart:

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


Time Warner Cable - TWC - close: 107.35 change: -0.28

Stop Loss: 110.55
Target(s): 105.00
Current Option Gain/Loss: -21.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/31/13: TWC slipped -0.2% after testing short-term resistance near its simple 10-dma again. I remain cautiously bearish here. We're not suggesting new positions at this time.

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

08/29/13 new stop loss @ 110.55

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: 59.83 change: -0.87

Stop Loss: 55.75
Target(s): 74.50
Current Option Gain/Loss: -29.4%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
08/31/13: CBI was unable to avoid the market's widespread declines on Friday. Shares fell -1.4% and closed back under the 50-dma. 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: 51.04 change: -0.53

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:
08/31/13: Investor sentiment still seems to be bullish on European equities. Yet that hasn't protected the European markets from profit taking. The VGK is down sharply for the week and closed on its 50-dma. I suspect this ETF will test the $50.00 level and its 200-dma eventually.

If we do see the VGK test $50.00 we might reconsider our entry point and buy the dip. Until then our official plan is to wait for VGK to close above $53.50.

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.

chart:

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