Editor's Note:

The jobs data this morning pushed out expectations for any taper to the Fed's QE program into the second quarter of 2014. Naturally the market rallied on such expectations.

CTRP has been removed. DIS and MDT were triggered.

I have updated our stop and exit strategy for the VGK trade.


Current Portfolio:


CALL Play Updates

3D Systems - DDD - close: 57.29 change: -0.41

Stop Loss: 53.45
Target(s): 64.00
Current Option Gain/Loss: + 0.0%
Time Frame: exit PRIOR to earnings on Oct. 29th
New Positions: see below

Comments:
10/22/13: DDD traded to a new high this morning. Then on no news I could find the stock shot lower late morning. Traders bought the dip near $55.85 but DDD closed with a loss, underperforming the market. I would hesitate to launch new positions here.

Earlier Comments:
DDD could see some short covering. The most recent data listed short interest at 32.5% of the 94.5 million share float.

Our target is $64.00. However, we will plan to exit prior to DDD's earnings report on October 29th.

- Suggested Positions -

Long NOV $60 call (DDD1316K60) entry $2.25

Entry on October 18 at $57.05
Average Daily Volume = 6.8 million
Listed on October 17, 2013


The Walt Disney Company - DIS - close: 69.00 change: +1.39

Stop Loss: 65.85
Target(s): 74.00
Current Option Gain/Loss: + 59.0%
Time Frame: exit PRIOR to earnings on November 7th.
New Positions: see below

Comments:
10/22/13: Our brand new play on DIS has been opened. Shares gapped open at $67.94 and then raced past resistance near the $68.00 level. Our trigger was hit at $68.10.

Our target is $74.00 but we will plan to exit prior to DIS' earnings report on November 7th.

FYI: Tuesday's rally has produced a new buy signal on the Point & Figure chart that is currently suggesting an $80 price target.

- Suggested Positions -

Long NOV $70 call (DIS1316K70) entry $0.66

Entry on October 22 at $68.10
Average Daily Volume = 7.1 million
Listed on October 21, 2013


Dril-Quip, Inc. - DRQ - close: 119.18 change: +1.37

Stop Loss: 114.75
Target(s): 124.50
Current Option Gain/Loss: Nov120c: -18.9% & Dec125c -15.3%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/22/13: DRQ has spent the last few days chopping sideways below resistance near $120. Unfortunately the choppiness continued today. The stock rallied on news of a new multi-year deal with BP. DRQ traded above resistance at $120 but couldn't hold it. I would stay cautious here. More conservative traders may want to raise their stops. I am not suggesting new positions at this time.

Earlier comments:
Our target is $124.50. However, we will most likely exit prior to DRQ's earnings report expected in early November. If you are willing to hold over the earnings announcement then you may want to use the December options instead of November options. I am suggesting small positions because the spread on DRQ's November options are a bit wide.

*small positions* - Suggested Positions -

Long NOV $120 call (DRQ1316k120) entry $2.90*

- or -

Long DEC $125 call (DRQ1322L125) entry $1.95

*option price is an estimate.

Entry on October 16 at $118.25
Average Daily Volume = 281 thousand
Listed on October 14, 2013


Helmerich & Payne, Inc. - HP - close: 76.89 change: +0.40

Stop Loss: 73.75
Target(s): 79.50
Current Option Gain/Loss: +34.1%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
10/22/13: HP sprinted toward the $78 level again this morning. The rally failed and shares pared their gains down to +0.5%. I am raising our stop loss up toe $73.75. I am not suggesting new positions at this time.

We do not want to hold over the mid-November earnings report. FYI: The Point & Figure chart for HP is bullish with an $82 target.

- Suggested Positions -

Long NOV $75 call (HP1316K75) entry $2.31

10/22/13 new stop loss @ 73.75

Entry on October 14 at $74.50
Average Daily Volume = 1.1 million
Listed on October 12, 2013


iShares Russell 2000 ETF - IWM - close: 110.76 change: +0.29

Stop Loss: 104.80
Target(s): 114.00
Current Option Gain/Loss: +27.8%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
10/22/13: The IWM set another round of new all-time highs today. It's worth noting that the IWM did pare its gain from the morning spike higher. The market is arguably short-term overbought. I wouldn't be surprised to see a short-term dip. Look for support near $108.00.

- Suggested Positions -

Long 2014 Jan $110 call (IWM1418a110) entry 2.80

Entry on October 16 at $108.55
Average Daily Volume = 41 million
Listed on October 14, 2013


J2 Global, Inc. - JCOM - close: 55.50 change: +0.33

Stop Loss: 53.25
Target(s): 59.75
Current Option Gain/Loss: - 2.3%
Time Frame: exit PRIOR to earnings on November 5th
New Positions: see below

Comments:
10/22/13: JCOM extended its gains on Tuesday with a +0.59% advance. Shares marked their fourth gain in a row. The pullback from its intraday high might suggest a little exhaustion in the rally. Do not be surprised to see a dip back into the $54.50-54.00 zone.

Earlier Comments:
The stock looks ready to launch its next leg higher. New highs could spark a short squeeze. The most recent data listed short interest at 31% of the 43.7 million share float. Our target is $59.75 but more aggressive traders could aim higher. The Point & Figure chart for JCOM is bullish with a $77 target.

- Suggested Positions -

Long NOV $55 call (JCOM1316K55) entry $2.15

Entry on October 21 at $55.05
Average Daily Volume = 329 thousand
Listed on October 19, 2013


Medtronic, Inc. - MDT - close: 56.73 change: +0.24

Stop Loss: 55.40
Target(s): 59.75
Current Option Gain/Loss: - 2.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/22/13: Our new play on MDT has opened. Shares were strong right from the start this morning and MDT hit new highs and our trigger at $56.75. I would still consider new positions at current levels.

- Suggested Positions -

Long NOV $55 call (MDT1316K55) entry $2.07

Entry on October 22 at $56.75
Average Daily Volume = 3.4 million
Listed on October 21, 2013


Starbucks Corp. - SBUX - close: 80.90 change: +1.44

Stop Loss: 75.75
Target(s): 84.00
Current Option Gain/Loss: +63.0%
Time Frame: exit PRIOR to earnings on October 31st
New Positions: see below

Comments:
10/22/13: SBUX displayed relative strength on Tuesday with a rally past round-number resistance at the $80.00 level and a +1.8% gain. More conservative traders may want to raise their stops closer to the $78.00 level, which should be new support.

Tonight we are raising our suggested exit target from $82.50 to $84.00. Keep in mind that we do not want to hold over SBUX's earnings report on October 31st.

- Suggested Positions -

Long NOV $80 call (SBUX1316k80) entry $1.65

10/22/13 adjust exit target to $84.00

Entry on October 14 at $78.25
Average Daily Volume = 3.7 million
Listed on October 12, 2013


Constellation Brands - STZ - close: 64.42 change: +0.00

Stop Loss: 61.90
Target(s): 67.50
Current Option Gain/Loss: +84.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
10/22/13: I have previously cautioned readers that the $65.00 level might be round-number resistance for STZ. The stock traded up to $64.95 today before paring its gains to close unchanged.

More conservative traders may want to take profits now with our option up +84.7%. I suspect we could see STZ dip toward its 10-dma soon. I am raising our stop loss to $61.90.

Earlier Comments:
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

10/22/13 new stop loss @ 61.90, readers may want to take profits now. Our option is up +84%.
10/16/13 new stop loss @ 59.75
10/11/13 trade opened on gap higher at $61.25,
trigger was $61.10

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


Thor Industries - THO - close: 59.79 change: +1.25

Stop Loss: 57.75
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
10/22/13: THO continued to rally on Tuesday and outperformed the market with a +2.1% gain. The stock is now testing resistance at the $60.00 level.

There is no change from my weekend comments. I am suggesting a trigger to buy calls at $60.25. If triggered our target is $64.75.

Trigger @ 60.25

- Suggested Positions -

Buy the NOV $60 call (THO1316K60) current ask $1.65

Entry on October -- at $---.--
Average Daily Volume = 528 thousand
Listed on October 19, 2013


Vipshop Holdings Limited - VIPS - close: $73.58 change: -2.90

Stop Loss: 69.75
Target(s): 78.50
Current Option Gain/Loss: +10.4%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/22/13: Ouch! Many of the momentum Chinese stocks were hit with profit taking today. VIPS was no exception. Shares spiked down toward round-number support at $70.00 and technical support at the 10-dma before paring its losses. I cautioned readers that it might be time for a pullback but we were not expecting a $6.50 drop toward $70. I am not suggesting new positions.

Earlier Comments:
If this rally continues the stock could see some short covering. The most recent data listed short interest at 8.7% of the very small 20.5 million share float.

- Suggested Positions -

Long NOV $75 call (VIPS1316K75) entry $4.80

10/19/13 new stop loss @ 69.75, adjust exit target from 77.50 to 78.50

Entry on October 17 at $71.55
Average Daily Volume = 1.25 million
Listed on October 16, 2013


PUT Play Updates


Currently we do not have any active put trades.




Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 74.78 change: -0.22

Stop Loss: 68.40
Target(s): 79.00
Current Option Gain/Loss: +307.8%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
10/22/13: CBI tagged a new high at $75.70 this morning before fading lower. The stock is overbought here and due for some profit taking. More conservative investors may want to lock in gains now. 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

10/19/13 new stop loss @ 68.40
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

Entry on June 24 at $56.75
Average Daily Volume = 1.8 million
Listed on June 01, 2013


Vanguard FTSE Europe ETF - VGK - close: 57.35 change: +0.63

Stop Loss: 53.90
Target(s): Sell half @ $58.00, sell the rest at $63.00
Current Option Gain/Loss: +88.8%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
10/22/13: The VGK continues to race higher. The ETF surged another +1.1% today and is up eight out of the last nine sessions. The VGK is moving a lot faster than we expected so we're adjusting our exit strateg.

I am suggesting that we sell half of our position at $58.00 and we will sell the rest at $63.00. Tonight we are raising our stop loss to $53.90.

Earlier Comments:
We are taking a multi-month time frame with this trade. FYI: The Point & Figure chart for VGK is bullish with a $63 target.

- Suggested Positions -

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

10/22/13 Strategy Update: Plan to exit half @ $58.00 and exit the rest at $63.00. New stop loss @ 53.90
10/19/13 new stop loss @ 52.75
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.

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


CLOSED BULLISH PLAYS

Ctrip.com - CTRP - close: 56.96 change: -1.25

Stop Loss: 58.25
Target(s): 68.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/22/13: The stock market continues to hit new highs. Yet CTRP is not participating. The stock's failed rally near the early October high looks like a potential bearish double top formation.

Our trade has not opened yet. Tonight we are removing CTRP as a candidate.

Trade did not open.

10/22/13 removed from the newsletter. trigger was 61.25

chart:

Entry on October -- at $---.--
Average Daily Volume = 2.65 million
Listed on October 19, 2013