Editor's Note:

The U.S. market saw widespread gains on Wednesday with energy and precious metals underperforming.

The market's recent bounce is not helping our bearish plays. Readers will want to double check their stop loss placement!


Current Portfolio:


CALL Play Updates

NetSuite Inc. - N - close: 98.75 change: -1.74

Stop Loss: 97.85
Target(s): 109.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
09/04/13: There was no follow through on N's bullish breakout above $100 yesterday. Instead the stock reversed with a -1.7% decline and completely erased yesterday's gains. Currently we are on the sidelines waiting for a new relative high.

Tuesday's high was $100.91. I am suggesting a trigger to buy calls at $101.05. If triggered our multi-week target is $109.00. I would not be surprised to see N find some short-term resistance around the $105 area.

Trigger @ 101.05

- Suggested Positions -

Buy the Oct $105 call (N1319j105)

Entry on September -- at $---.--
Average Daily Volume = 294 thousand
Listed on September 03, 2013


Sturm, Ruger & Co. Inc. - RGR - close: 52.37 change: +0.30

Stop Loss: 49.95
Target(s): 57.50
Current Option Gain/Loss: -39.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/04/13: Yesterday RGR was down 30 cents. Today the stock is up 30 cents. I don't see any changes from my earlier comments.

I am not suggesting new positions at this time. We'll wait and see if RGR dips toward its simple 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

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


Under Armour, Inc. - UA - close: 74.79 change: +0.66

Stop Loss: 72.25
Target(s): 79.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
09/04/13: UA continued to push higher today. The stock inched closed to round-number, psychological resistance near the $75.00 level. Today does mark a new all-time closing high for UA.

The stock is building a bullish consolidation pattern and poised to breakout higher again.

Earlier Comments:
There is clear resistance near the $74.50 area. More aggressive traders might want to buy calls on a rally past $74.60. However, it's possible that the $75.00 level could act as round-number, psychological resistance. Therefore I am suggesting a trigger to buy calls at $75.25. If triggered our target is $79.50.

Trigger @ 75.25

- Suggested Positions -

Buy the Oct $77.50 call (UA1319j77.5) current ask $1.90

Entry on September -- at $---.--
Average Daily Volume = 1.1 million
Listed on September 03, 2013


PUT Play Updates

Diamond Offshore Drilling - DO - close: 63.41 change: -0.05

Stop Loss: 66.01
Target(s): 57.50
Current Option Gain/Loss: - 2.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/04/13: Bullish analyst comments on DO this morning failed to lift the stock. Shares underperformed the broader market with a small decline. We remain bearish here.

Earlier Comments:
If triggered our target is the $57.50 level. I would not be surprised to see a temporary bounce near the $60.00 mark.

- Suggested Positions -

Long Oct $60 PUT (DO1319v60) entry $0.85

Entry on September 03 at $63.75
Average Daily Volume = 1.0 million
Listed on August 28, 2013


DaVita HealthCare - DVA - close: 109.44 change: +0.85

Stop Loss: 110.51
Target(s): 105.25
Current Option Gain/Loss: - 6.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/04/13: I am concerned about our put play on DVA. Shares moved higher today (+0.7%) and spent most of the session consolidating sideways near the $109.50 area and short-term technical resistance at its simple 10-dma. If you look closely DVA was coiling for a bullish breakout higher.

More conservative traders may want to lower their stop loss or just exit early now to avoid or minimize any losses.

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*

09/04/13 the action today is troubling. Readers may want to lower their stop or exit early
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.

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


eBay Inc. - EBAY - close: 51.45 change: +1.13

Stop Loss: 51.75
Target(s): 46.00
Current Option Gain/Loss: -61.4%
Time Frame: exit PRIOR to September option expiration
New Positions: see below

Comments:
09/04/13: EBAY garnered some bullish analyst comments this morning and the stock shot higher. Shares are not cooperating with our bearish play and EBAY almost hit our stop loss at $51.75 today. Today's rally is a bullish move above its 10-dma, above its 300-dma and above the three-week trend of lower highs. More conservative traders may want to exit immediately. I am not suggesting new 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

09/04/13 today's move is a warning signal for the bears. traders may want to exit bearish positions immediately

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


iShares Russell 2000 ETF - IWM - close: 101.95 change: +0.89

Stop Loss: 103.25
Target(s): 99.00
Current Option Gain/Loss: -32.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/04/13: Stocks rebounded on Wednesday. Technology stocks and the financial sector helped lead the way. The small cap ETF (IWM) added +0.88%, which kept pace with the S&P 500 index. The IWM is currently sitting just below short-term resistance near $102.40 and its 50-dma near 102.16.

More conservative traders might want to lower their stops.

Keep in mind that we have less than three weeks left on our September puts.

- 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

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


Polaris Industries - PII - close: 111.12 change: +1.26

Stop Loss: 112.05
Target(s): 101.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/04/13: PII added +1.1% as the stock bounced back toward short-term resistance in the $111.50-112.00 area. Nimble traders could use a failed rally near $112.00 as a new entry point. Currently the newsletter is still on the sidelines waiting for a new relative low.

Earlier Comments:
Upward momentum stalled in August and shares have begun to correct lower. PII tried to find support near $110 but the bounce just failed near $112. Now PII is breaking down to new four-week lows and we suspect shares could see a correction toward round-number, psychological support near $100.

I am suggesting a trigger to buy puts at $108.65. If triggered our target is $101.00.

Trigger @ 108.65

- Suggested Positions -

buy the Oct $105 PUT (PII1319v105)

Entry on September -- at $---.--
Average Daily Volume = 535 thousand
Listed on August 31, 2013


Red Robin Gourmet Burgers Inc. - RRGB - close: 66.54 change: +0.12

Stop Loss: 66.75
Target(s): 60.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/04/13: Wednesday proved to be a very quiet session for RRGB with the stock drifting sideways inside a 50-cent range most of the session. I don't see any changes from my prior comments.

Earlier Comments:
RRGB's longer-term trend is still higher. We're just trying to capture a correction back toward likely support near $60.00 and its 50-dma.

Friday's low was $64.74. I am suggesting a trigger at $64.65. Our target is $60.25.

Trigger @ 64.65

- Suggested Positions -

Buy the Oct $60 PUT (RRGB1319v60)

Entry on September -- at $---.--
Average Daily Volume = 152 thousand
Listed on August 31, 2013


Sherwin-Williams Co. - SHW - close: 172.35 change: +1.27

Stop Loss: 176.05
Target(s): sell half at 161.00, then exit the rest at $156.00
Current Option Gain/Loss: Sep165p: + 4.5% & Oct165p: - 3.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/04/13: SHW managed a bounce near $170 and its simple 200-dma. Today's rebound essentially erases yesterday's decline. Traders could wait for another failed rally near $175.00 or wait for a new drop below $170 as alternative entry points.

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) entry $1.10

- or -

Buy the Oct $165 PUT (SHW1319v165) entry $3.20

09/03/13 trade opened this morning (SHW @ 172.92)
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.

Entry on September 03 at $172.92
Average Daily Volume = 781 thousand
Listed on August 27, 2013


Time Warner Cable - TWC - close: 109.91 change: +0.66

Stop Loss: 110.55
Target(s): 105.00
Current Option Gain/Loss: -59.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/04/13: Warning! It looks like our TWC put play is in serious trouble. The stock bounced again and spent most of the day coiling up against resistance near $110.00. TWC looks like it's wants to breakout higher. Readers will want to seriously consider an early exit immediately. I am not suggesting new positions.

Earlier Comments:
We do want to keep our position size small.

- Suggested Positions -

Long Sep $105 PUT (TWC1321u105) entry $2.35

09/04/13 I am repeating my warning that readers may want to exit now.
09/03/13 readers may want to exit early now. News of an agreement with CBS sparked a bounce in TWC.
08/29/13 new stop loss @ 110.55

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: 59.91 change: -0.54

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:
09/04/13: CBI underperformed the market today with a -0.89% loss thanks to Goldman Sachs downgrading the stock to a "neutral" this morning. 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: 52.07 change: +0.29

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:
09/04/13: Volatility continues in the VGK. This ETF produced a gap down at the open this morning but quickly rebounded to close up on the session.

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