Editor's Note:

Stocks continued to float higher on Friday as investors hoped for a deal in Washington on the debt ceiling and government shutdown.

We want to exit our DECK trade on Monday morning.
STZ hit our trigger on Friday.


Current Portfolio:


CALL Play Updates

Deckers Outdoor - DECK - close: 61.12 change: -0.22

Stop Loss: 59.95
Target(s): 68.00
Current Option Gain/Loss: -28.5%
Time Frame: exit PRIOR to earnings in late October
New Positions: see below

Comments:
10/12/13: Warning! The stock market has put together a strong two-day bounce on hopes of a debt deal in Washington. Yet shares of DECK are not participating. Shares are hovering near support at the 50-dma and the $60.00 level. This relative weakness is a warning signal. We are suggesting an immediate exit on Monday morning.

- Suggested Positions -

Long NOV $65 call (DECK1316k65) entry $3.50

10/12/13 Prepare to exit on Monday morning (Oct. 14th)

chart:

Entry on October 10 at $62.65
Average Daily Volume = 1.1 million
Listed on October 09, 2013


Constellation Brands - STZ - close: 62.99 change: +2.04

Stop Loss: 58.90
Target(s): 67.50
Current Option Gain/Loss: +48.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
10/12/13: Our new STZ trade is off to a strong start. Our plan was to buy calls at $61.10 but STZ gapped open higher at $61.25 and then soared to a +3.3% gain and a new all-time high. If you missed the entry on Friday morning you may want to wait for a dip before initiating new positions.

Earlier Comments:
If triggered our target is $67.50 but we may end up exiting near $65.00, which could be potential round-number resistance.

- Suggested Positions -

Long NOV $62.50 call (STZ1316k62.5) entry $1.38

10/11/13 trade opened on gap higher at $61.25,
trigger was $61.10

chart:

Entry on October 11 at $61.25
Average Daily Volume = 1.9 million
Listed on October 10, 2013


Zimmer Holdings - ZMH - close: 86.66 change: +0.73

Stop Loss: 83.49
Target(s): 89.75
Current Option Gain/Loss: +18.5%
Time Frame: exit PRIOR to earnings on Oct. 24th
New Positions: see below

Comments:
10/12/13: Friday produced another bullish session for ZMH with shares marching higher all day long. Shares are up multiple days in a row. If you missed our entry point you may want to wait for a dip (possibly near $85.00) before initiating new positions.

Earlier Comments:
FYI: The medical device stocks could see a little volatility surrounding the political wrangling in Washington. The republicans and some democrats support repealing the recent medical device tax. Yet Senate Majority Leader Harry Reid and President Obama has rejected any suggestions to repeal this tax. It could be a bargaining chip in the negotiations between both sides over the budget and debt ceiling. Although it's worth noting that shares of ZMH have been ignoring all the drama lately.

- Suggested Positions -

Long NOV $85 call (ZMH1316k85) entry $2.70

chart:

Entry on October 10 at $85.55
Average Daily Volume = 1.2 million
Listed on October 09, 2013


PUT Play Updates

McDonald's Corp. - MCD - close: 94.74 change: +0.30

Stop Loss: 95.05
Target(s): 90.25
Current Option Gain/Loss: -48.3%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
10/12/13: Hmm... the market's two-day bounce has also produced a two-day oversold bounce in MCD. Shares did underperform with a +0.3% gain versus a +0.6% gain in the S&P 500 index. You'll also notice how the bounce on Friday stopped at its 10-dma. More conservative traders may still want to abandon ship and exit early now. We're going to give MCD one more chance to reverse. Tonight we're adjusting our stop loss to $95.05. That should give MCD room to fail here at the 10-dma or fail at the $95.00 level. I would wait for an intraday reversal before considering new positions.

Earlier Comments:
Our time frame is only two, maybe three weeks as we do not want to hold over MCD's earnings report expected in late October.

- Suggested Positions -

Long NOV $90 PUT (MCD1316W90) entry $0.93

10/12/13 adjust stop loss to $95.05

chart:

Entry on October 09 at $93.75
Average Daily Volume = 4.3 million
Listed on October 07, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 71.05 change: +0.35

Stop Loss: 64.00
Target(s): 79.00
Current Option Gain/Loss: +201.9%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
10/12/13: CBI continues to show relative strength. The stock hit new all-time highs on Friday. I am not suggesting new positions at this time.

FYI: CBI is due to report earnings on October 29th.

*Small Positions* - Suggested Positions -

Long 2014 Jan $65 call (CBI1418A65) entry $2.55

10/01/13 new stop loss @ 64.00, adjust target to $79.00
09/21/13 new stop loss @ 59.75
09/11/13 new stop loss @ 57.65
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: 54.99 change: +0.31

Stop Loss: 50.95
Target(s): 58.50
Current Option Gain/Loss: +11.1%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
10/12/13: The major European markets continued to bounce on Friday. The lifted the VGK toward short-term resistance near $55.00.

Earlier Comments:
We are taking a multi-month time frame with this trade. 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.

- Suggested Positions -

Long 2014 Mar $55 call (VGK1422L55) entry $1.80*

09/11/13 trade opens. VGK @ 53.60
*option entry @ 1.80 is an estimate. Ask closed at $1.75 yesterday
09/10/13 entry trigger met. open positions tomorrow.
09/10/13 new stop loss @ 50.95
08/24/13 adjust the option strike from 2013 Dec $55 to $2014 Mar $55.

chart:

Entry on September 11 at $---.--
Average Daily Volume = 3.0 million
Listed on August 10, 2013