Editor's Note:

Headlines out of China fueled a market pullback on Wednesday. Investors are worried that China might tighten monetary policy to combat inflation.

VIPS hit our stop loss.


Current Portfolio:


CALL Play Updates

3D Systems - DDD - close: 56.75 change: -0.54

Stop Loss: 53.45
Target(s): 64.00
Current Option Gain/Loss: - 8.8%
Time Frame: exit PRIOR to earnings on Oct. 29th
New Positions: see below

Comments:
10/23/13: DDD dipped back toward short-term support in the $55.75-56.00 zone today. Shares may have been pressured by news that Hewlett-Packard could jump into the 3-D printing industry next year. Volume in DDD was light so I doubt anyone was panicked by the headline.

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: 68.12 change: -0.88

Stop Loss: 65.85
Target(s): 74.00
Current Option Gain/Loss: + 10.6%
Time Frame: exit PRIOR to earnings on November 7th.
New Positions: see below

Comments:
10/23/13: DIS gave back a large chunk of yesterday's gains in today's market-wide pullback. A quick look at an intraday chart will show you how DIS found support near $68.00 as expected (prior resistance tends to become new support).

I would use today's pullback as a new entry point to buy calls.

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: 115.41 change: -3.77

Stop Loss: 114.75
Target(s): 124.50
Current Option Gain/Loss: Nov120c: -65.5% & Dec125c -56.4%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/23/13: Oil stocks and related names were hit hard today during the market's decline. A new four-month low in crude oil prices didn't help. Shares of DRQ underperformed the major indices with a -3.1% decline. Shares stalled near the 30-dma. The low today was $115.18. Our stop loss is at $114.75. Any follow through lower could hit our stop.

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: 75.00 change: -1.89

Stop Loss: 73.75
Target(s): 79.50
Current Option Gain/Loss: -17.7%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
10/23/13: HP's -2.4% decline was another casualty of the oil-industry sell-off today. Shares dipped to round-number support near $75.00 and short-term technical support at the 10-dma. Today's low was $74.56. More conservative traders may want to adjust their stop loss higher.

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: 110.39 change: -0.37

Stop Loss: 105.95
Target(s): 114.00
Current Option Gain/Loss: +22.5%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
10/23/13: After a string of new all-time highs the IWM pulled back today with a minor -0.33% decline. If this dip continues we could see the IWM testing its 10-dma near $109.00 or prior resistance and what should be support near $108.00. I am raising our stop loss to $105.95.

- Suggested Positions -

Long 2014 Jan $110 call (IWM1418a110) entry 2.80

10/23/13 new stop loss @ 105.95

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


J2 Global, Inc. - JCOM - close: 55.20 change: -0.30

Stop Loss: 53.25
Target(s): 59.75
Current Option Gain/Loss: - 4.6%
Time Frame: exit PRIOR to earnings on November 5th
New Positions: see below

Comments:
10/23/13: JCOM was not immune to the market's decline but shares did pare their morning losses. I warned readers that we could see JCOM slip back to test the $54.50-54.00 zone and today's low was $54.57. There is no guarantee the pullback is over.

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: 57.65 change: +0.92

Stop Loss: 55.40
Target(s): 59.75
Current Option Gain/Loss: +35.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/23/13: Shares of MDT were upgraded this morning. This helped boost the stock to a +1.6% gain and a new multi-year high.

- 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: 80.05 change: -0.85

Stop Loss: 75.75
Target(s): 84.00
Current Option Gain/Loss: +39.3%
Time Frame: exit PRIOR to earnings on October 31st
New Positions: see below

Comments:
10/23/13: Ouch! SBUX gave back about two thirds of yesterday's gains but it did manage to hold the $80 level. Readers may want to raise their stop loss closer to the $78.00 level, which should be support. 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: 63.99 change: -0.43

Stop Loss: 61.90
Target(s): 67.50
Current Option Gain/Loss: +52.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
10/23/13: The pullback in STZ continues. There is no change from my prior comments. Look for potential support near the 10-dma or the $62 level.

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: 58.98 change: -0.81

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:
10/23/13: A down day for the U.S. market undermined THO's attempt to breakout past resistance at $60.00. Shares gave back -1.3%. I don't see any changes 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)

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


Viacom, Inc. - VIAB - close: 84.37 change: -0.28

Stop Loss: 82.75
Target(s): 89.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on November 14th.
New Positions: Yes, see below

Comments:
10/23/13: VIAB also retreated from resistance during today's market pullback. There is no change from my prior comments.

The September 27th intraday high was $85.22. I am suggesting a trigger to buy calls at $85.30. If triggered our target is $89.50. However, we will plan to exit prior to VIAB's earnings report in mid November.

Trigger @ 85.30

- Suggested Positions -

Buy the DEC $85 call (VIAB1322L85)

Entry on October -- at $---.--
Average Daily Volume = 2.6 million
Listed on October 22, 2013


PUT Play Updates


Currently we do not have any active put trades.




Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 73.58 change: -1.20

Stop Loss: 68.40
Target(s): 79.00
Current Option Gain/Loss: +268.6%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
10/23/13: CBI hit some profit taking today with a -1.6% pullback. After weeks of gains it was due for a dip. 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: 57.09 change: -0.26

Stop Loss: 53.90
Target(s): Sell half @ $58.00, sell the rest at $63.00
Current Option Gain/Loss: +77.7%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
10/23/13: European markets were down across the board today. Yet profit taking in the VGK wasn't that bad. Shares slipped -0.4%. If this market pullback continues I would look for a dip toward $56.00.

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

Vipshop Holdings Limited - VIPS - close: $69.41 change: -4.17

Stop Loss: 69.75
Target(s): 78.50
Current Option Gain/Loss: -27.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/23/13: Ouch! It was another rough day for VIPS. After racing higher the stock gave back its gains just as fast. Part of the problem today was weakness in the Chinese markets. Investors are worried that the Chinese central bank might tighten monetary policy to ward off the country's growing inflation pressures.

As a momentum stock VIPS can outperform but it can also underperform and shares definitely underperformed today with a -5.6% decline. Our stop loss was hit at $69.75.

- Suggested Positions -

NOV $75 call (VIPS1316K75) entry $4.80 exit $3.50 (-27.0%)

10/23/13 stopped out
10/19/13 new stop loss @ 69.75, adjust exit target from 77.50 to 78.50

chart:

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