Editor's Note:

The U.S. market bounced off the midday lows but the major indices closed mixed on the first day of trading for the fourth quarter. A disappointing PMI reading added to worries that parts of the U.S. economy are slowing down.

CAT hit our stop loss.


Current Portfolio:


CALL Play Updates

Nike, Inc. - NKE - close: 123.83 change: +0.86

Stop Loss: 112.90
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 3.6 million
Entry on September -- at $---.--
Listed on September 28, 2015
Time Frame: Exit PRIOR to earnings in December
New Positions: Yes, see below

Comments:
10/01/15: NKE has been more resilient than expected. Shares continued to bounce today after traders bought the dip near $121.25.

I would be tempting to buy NKE on this bounce. However, historically the first 10 to 14 days of October are usually bearish. We just need to be patient and wait for the dip.

Our suggested entry point is $117.50.

Trade Description: September 28, 2015:
In the athletic footwear and apparel industry Nike is the 800-pound gorilla with annual sales of more than $30 billion. According to the company, "NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly-owned NIKE, Inc. subsidiaries include Converse Inc., which designs, markets and distributes athletic lifestyle footwear, apparel and accessories, and Hurley International LLC, which designs, markets and distributes surf and youth lifestyle footwear, apparel and accessories."

The stock has been a great performer thanks to NKE constantly delivering better than expected results. Today shares of NKE are up +27% for 2015 versus an S&P 500 that is down -8.6%.

Looking at the last few quarters NKE has seen strong growth across all geographic categories. Their 2015 Q3 results were announced on March 19th. Earnings and revenues were better than expected. Sales were up +7% but on a currency neutral basis Q3 sales were +13%. Margins improved and their online sales soared. This trend has continued over the last six months.

NKE's 2015 Q4 results were announced on June 25th. Earnings were 15 cents above estimates while revenues beat expectations at $7.78 billion. On a reported basis sales were up +4.8% but on a currency neutral basis sales rose +13%. Global future orders, a key metric Wall Street watches for NKE, were up +2% but backing out currency headwinds future orders were up +13%, above estimates.

The trend of earnings beats continued with NKE's most recent report on September 24th (last week). Analysts were expecting a profit of $1.19 per share on revenues of $8.22 billion. NKE beat both estimates with a profit of $1.34 a share. Revenues were up +5.4% to $8.41 billion. Margins improved again thanks to a shift to higher-margin products and continued growth for online sales.

Management said revenues in Western Europe were up +14%. Emerging market sales were up +19%. North American sales rose +9% and future orders are up +15%. China was a bright spot as the great China region delivered sales growth of +30% and future orders are up +27%.

NKE's global future orders improved from +2% the prior quarter to +9%. Yet on a constant currency (neutral) basis their future orders are up +17%, which is significantly above analysts expectations.

This better than expected report and their bullish forecast for orders generated a parade of positive comments from Wall Street analysts. Several reiterated their "buy" rating or upgraded the stock. A few upgraded their price targets into the $140 area. The point & figure chart is bullish and forecasting a long-term target of $182.00.

Last week's earnings report saw NKE's stock pop to new highs near $125.00 a share. Today NKE saw some profit taking, down -2.28%. The broader market is sinking and this could drag on NKE. The stock is likely to fill the gap from Friday morning. Meanwhile prior resistance in the $117.00 area should be new support. We want to take advantage of any short-term weakness in NKE and buy a dip.

Odds are good NKE will decline toward the $117 region. Tonight we are suggesting a buy-the-dip entry trigger at $117.50. We'll start with a stop loss at $112.90.

Buy-a-dip Trigger @ $117.50

- Suggested Positions -

Buy the 2016 Jan $125 CALL (NKE150115C125) estimated entry in the $4 range

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike




PUT Play Updates

Aon plc - AON - close: 88.56 change: -0.05

Stop Loss: 90.85
Target(s): To Be Determined
Current Option Gain/Loss: - 3.0%
Average Daily Volume = 1.2 million
Entry on September 23 at $88.65
Listed on September 22, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
10/01/15: AON is quietly churning sideways near its 2015 lows. Wait for a new decline under $87.50 as our next bearish entry point.

Trade Description: September 22, 2015:
A slowing global economy and negative currency winds have created a tougher environment for AON. Financial stocks in general have underperformed the broader market (-8%) and AON looks like it could play catch up with the group.

AON is in the insurance business. According to the company, "Aon plc is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise."

Management has managed to beat Wall Street's bottom line earnings estimate the last few quarters. However, they have been missing analysts' revenue estimates. Revenues have been falling faster than expected. Their Q4 results saw revenues drop to +3% growth. By Q1 revenues were down -3.4%. Their Q2 results, announced on July 31st, saw revenues decline -3.9%. As a global company the impact of negative currency headwinds does account for a lot of this revenue trouble. While some traders may want to write this off the situation could get worse as the U.S. dollar should rally when the Fed starts to raise rates.

Technically shares of AON look broken. The stock collapsed during the market's correction in late August. The oversold bounce failed pretty quickly. Now three weeks later the stock is starting to breakdown from this short-term consolidation pattern. The point & figure chart is already bearish and forecasting at $75.00 target. We are suggesting a trigger to buy puts at $88.65.

- Suggested Positions -

Long 2016 JAN $85 PUT (AON160115P85) entry $3.30

09/28/15 new stop @ 90.85
09/23/15 triggered @ $88.65
Option Format: symbol-year-month-day-call-strike


Alibaba Group - BABA - close: 58.87 change: -0.10

Stop Loss: 61.05
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 15.8 million
Entry on September -- at $---.--
Listed on September 29, 2015
Time Frame: Exit PRIOR to earnings in November
New Positions: Yes, see below

Comments:
10/01/15: BABA did not see any significant follow through on yesterday's bounce. Shares tried to rally but failed under the $60.00 level again.

There is no change from my prior comments. We are waiting for a new relative low. Our suggested entry point is $57.15.

Trade Description: September 29, 2015:
BABA was the biggest IPO in history. After a rocket-ride higher shares peaked at $120.00 in November 2014. Today BABA is in bear market, down -51% from its peak. The stock is on pace for its fourth monthly loss in a row. The company's valuation has plunged $75 billion since May (currently at $143 billion). There doesn't appear to be any bottom in sight.

BABA is in the services sector. According to the company, "Alibaba Group's mission is to make it easy to do business anywhere. The company is the largest online and mobile commerce company in the world in terms of gross merchandise volume. Founded in 1999, the company provides the fundamental technology infrastructure and marketing reach to help businesses leverage the power of the Internet to establish an online presence and conduct commerce with hundreds of millions of consumers and other businesses."

Alibaba Group's major businesses include:

Taobao Marketplace (www.taobao.com), China's largest online shopping destination
Tmall.com (www.tmall.com), China's largest third-party platform for brands and retailers
Juhuasuan (www.juhuasuan.com), China's most popular online group buying marketplace
Alitrip (www.alitrip.com), a leading online travel booking platform
AliExpress (www.aliexpress.com), a global online marketplace for consumers to buy directly from China
Alibaba.com (www.alibaba.com), China's largest global online wholesale platform for small businesses
1688.com (www.1688.com), a leading online wholesale marketplace in China
Alibaba Cloud Computing (www.aliyun.com), a provider of cloud computing services to businesses and entrepreneurs
BABA's IPO last year was a huge event for Wall Street. They came to market with 320 million shares that priced at $68.00. BABA opened for trading at $92.70. Today the number of shares outstanding has ballooned to 2.48 billion and the number of shares in the float is over 1.6 billion (available for sale). The company just had a huge lock up expire last weekend so major shareholders are now able to sell.

Big momentum stocks like BABA draw a lot of attention because of the company's growth rate. BABA is still growing. The problem is that growth is slowing down.

BABA reported their Q4 report on May 7th. Earnings of $0.48 per share beat estimates by seven cents. Revenues were up +44.7% to $2.81 billion, which was above estimates. Their Q1 numbers were announced on August 12th. BABA only beat earnings by a penny with $0.59 a share. Revenues were up +28% to $3.26 billion but that missed expectations. BABA's management tried to soften the bad news by announcing a big $4 billion stock buyback program over the next two years.

The buyback news didn't work. Shares of BABA plunged on the earnings news. Wall Street is turning cautious on the stock. Bloomberg recently reported that 12 analysts have cut their BABA sales estimates for Q3 and Q4, the most important quarter of the year. Wall Street is now forecasting BABA sales growth to slow down to +27% in Q3 and +24% in Q4. This is the slowest pace of growth since BABA's IPO.

Why the bearish outlook? The answer could be the slowing Chinese economy. The country is suffering from a hard landing as Chinese growth sinks to its slowest pace in years. The biggest shopping day of the year is Singles Day on November 11th. This year BABA is facing tougher competition for the online shopping fest. Barron's recently argued that shares of BABA could fall another -50%. The point & figure chart is bearish and forecasting at $51 target.

The bearish trend of lower highs has pushed BABA's stock to record lows and below its IPO price of $68. As concerns over China's economy persist BABA could have much further to fall. Tonight we are suggesting a trigger to buy puts at $57.15. We will plan on exiting prior to BABA's earnings in November.

Trigger @ $57.15

- Suggested Positions -

Buy the NOV $55 PUT (BABA151120P55)

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike


Compass Minerals Intl. - CMP - close: 78.82 change: +0.45

Stop Loss: 79.55
Target(s): To Be Determined
Current Option Gain/Loss: -25.0%
Average Daily Volume = 269 thousand
Entry on September 24 at $78.70
Listed on September 23, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
10/01/15: CMP is clearly not cooperating with us. Shares continue to churn sideways in the $77-79 range. There is no follow through lower as traders keep buying the dips. Big picture for CMP looks bearish but on a short-term basis the stock acts like it wants to bounce.

More conservative traders may want to abandon ship now. No new positions at this time.

Trade Description: September 23, 2015:
Continued weakness in commodities is really started to weigh down the basic material stocks. CMP could be on the verge of a big breakdown.

CMP is in the basic materials sector. According to the company, "Compass Minerals is a leading provider of essential minerals that provide solutions to nature's challenges, including salt for winter roadway safety and other consumer, industrial and agricultural uses, and specialty plant nutrition minerals that improve the quality and yield of crops. The company produces its minerals at locations throughout the U.S. and Canada and in the U.K."

Looking at CMP's last few earnings reports their results have been mixed. They tend to beat Wall Street's estimate on the bottom line but revenues have been up and down. The most recent report (Q2) came out on July 27th. Revenues were down -1.6% from a year ago but that actually beat expectations. CMP's management has reaffirmed their full year guidance two quarters in a row but that hasn't stopped multiple analyst firms from downgrading their outlook for the stock.

Technically CMP has been churning sideways in the $79.00-86.00 trading range for about three months. A breakdown through the bottom of this range would also generate a new sell signal on the point & figure chart.

Tonight we are suggesting a trigger to buy puts at $78.70. Plan on exiting prior to CMP's earnings report in late October.

- Suggested Positions -

Long DEC $75 PUT (CMP151218P75) entry $3.20

10/01/15 CMP is not cooperating. Readers may want to exit early now
09/28/15 new stop @ 79.55
09/24/15 triggered @ $78.70
Option Format: symbol-year-month-day-call-strike


Deckers Outdoor Corp. - DECK - close: 58.08 change: +0.02

Stop Loss: 60.25
Target(s): To Be Determined
Current Option Gain/Loss: -17.5%
Average Daily Volume = 775 thousand
Entry on September 24 at $58.28
Listed on September 23, 2015
Time Frame: Exit PRIOR to earnings
New Positions: see below

Comments:
10/01/15: Thursday proved to be a quiet day for DECK. Shares churned sideways inside a $1.00 range. The stock closed virtually unchanged on the session. Nimble traders could watch for a failed rally near $60.00 as a new entry point.

Trade Description: September 23, 2015:
Slowing sales and rising expenses is a dangerous recipe. Investors seem to have lost confidence in DECK with the stock down -35% year to date.

DECK is in the consumer goods sector. According to the company, "Deckers Brands is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities. The Company's portfolio of brands includes UGG®, Teva®, Sanuk®, Ahnu®, and HOKA ONE ONE®. Deckers Brands products are sold in more than 50 countries and territories through select department and specialty stores, 143 Company-owned and operated retail stores, and select online stores, including Company-owned websites. Deckers Brands has a 40-year history of building niche footwear brands into lifestyle market leaders attracting millions of loyal consumers globally."

The stock was crushed in January 2015 with a plunge from $94 to $66. A big chunk of that decline was a reaction to their earnings (January 29th). DECK missed estimates on both the top and bottom line and lowered guidance.

Since then DECK has seen some improvement in earnings but their most recent report was still disappointing. DECK reported its 2016 Q1 results on July 30th. Wall Street was expecting a loss of ($1.50) per share on revenues of $213 million. DECK delivered a loss of ($1.43) a share. That beat estimates but it was still worse than the ($1.07) loss a year ago. Revenues were up +4.5% to $221 million. Unfortunately DECK said their expenses were up while margins contracted.

DECK management also offered soft Q2 guidance while bumping their full-year 2016 earnings estimates. Investors chose to sell. Their Q1 results saw Teva brand sales up +6.8% but Sanuk brand sales fell -7.0% while Ugg brand sales dropped -7.2%. The Ugg number is important since Ugg sales account for more than 50% of DECK's revenues.

It looks like the bears might be right about this one but I have to warn you this is starting to look like a crowded trade. The most recent data listed short interest at 20% of the 32.1 million share float. This raises the risk of a short squeeze. Consider small positions to limit risk.

Technically DECK is in a bear market. The trend of lower highs is pushing it lower. Today DECK just broke down below key support at the $60.00 level. The next support area could be the $50 region. Today's low was $58.77. I am suggesting a trigger to open bearish positions at $58.65.

- Suggested Positions -

Long NOV $55 PUT (DECK151120P55) entry $2.85

09/28/15 new stop @ 60.25
09/24/15 Trade begins on gap down at $58.28, trigger was $58.65
Option Format: symbol-year-month-day-call-strike


International Flavors & Fragrances Inc. - IFF - close: 103.88 chg: +0.62

Stop Loss: 105.05
Target(s): To Be Determined
Current Option Gain/Loss: -16.1%
Average Daily Volume = 470 thousand
Entry on September 23 at $104.45
Listed on September 19, 2015
Time Frame: Exit PRIOR to earnings in early November
New Positions: see below

Comments:
10/01/15: IFF's oversold bounce continued for a third day in a row. The stock did stall near short-term resistance at its 10-dma and the $104.00 level.

No new positions at this time.

Trade Description: September 19, 2015:
Currencies moves and a slowing global economy appear to be souring IFF's performance.

IFF is considered part of the basic materials sector. According to the company, "International Flavors & Fragrances Inc. (IFF) is a leading global creator of flavors and fragrances used in a wide variety of consumer products. Consumers experience these unique scents and tastes in fine fragrances and beauty care, detergents and household goods, as well as beverages, sweet goods and food products. The Company leverages its competitive advantages of consumer insight, research and development, creative expertise, and customer intimacy to provide customers with innovative and differentiated product offerings. A member of the S&P 500 Index, IFF has more than 6,200 employees working in 32 countries worldwide."

Bulls could argue that emerging markets offer a lot of opportunity as the growing population of consumers demand more variety and flavors. Bears can argue that IFF faces a lot of competition around the globe and they're very vulnerable to currency moves. We can already see the impact of currency fluctuations in IFF's results.

Their Q4 results, announced Feb. 12th, were better than expected but revenues were only +4.7%. Their Q1 results, out May 12th, beat estimates by a thinner margin. Revenues were only up +0.6%. Their Q2 report came out on August 10th. Wall Street was expecting a profit of $1.36 a share on revenues of $776 million. IFF only delivered $1.29 a share with revenues down -2.6% to $767 million. Currencies are a big part of the issue here but the stock is not acting very healthy either.

On August 6th, 2015, the company announced they were raising their quarterly dividend by +20% to $0.56 a share. IFF should begin trading ex-dividend on Sept. 23rd. Management also announced a $250 million stock buyback through 2017. This news has not helped the stock price.

Investors seem to be selling the rally. Shares peaked in early 2015 and have made a trend of lower highs and lower lows. It looks like the trend of lower lows will accelerated. A few days ago IFF broke down under a major trend line of support on its long-term chart (see below). Tonight we are suggesting a trigger to buy puts at $104.45.

- Suggested Positions -

Long NOV $100 PUT (IFF151120P100) entry $2.80

09/28/15 new stop @ 105.05
09/23/15 triggered @ $104.45
Option Format: symbol-year-month-day-call-strike


Laboratory Corp. Of America - LH - close: 110.18 change: +1.71

Stop Loss: 112.25
Target(s): To Be Determined
Current Option Gain/Loss: + 43.9%
Average Daily Volume = 1.0 million
Entry on September 25 at $114.25
Listed on September 24, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
10/01/15: Bearish traders have to decide how much risk they want to allow with LH bouncing. Shares rebounded off their morning lows (near yesterday's lows) and the stock rallied through out the rest of the session. LH outperformed the broader market with a +1.5% gain. The close above potential round-number resistance at $110.00 is arguably short-term bullish. Readers may want to consider lowering their stop loss. We are going to keep our stop at $112.25 tomorrow since Friday morning could be volatile thanks to the jobs report.

No new positions at this time.

Trade Description: September 24, 2015:
Investor sentiment on LH seems to have soured. The stock is up +6.8% for the year but it's down more than -10% from its early August peak. LH's 2015 gains could vanish if shares break support.

LH is in the healthcare sector. According to the company, "Laboratory Corporation of America® Holdings, an S&P 500 company, is the world's leading healthcare diagnostics company, providing comprehensive clinical laboratory services through LabCorp Diagnostics, and end-to-end drug development support through Covance-Drug Development. LabCorp is a pioneer in commercializing new diagnostic technologies and is improving people's health by delivering the combination of world-class diagnostics, drug development and knowledge services. With combined revenue pro forma for the acquisition of Covance in excess of $8.5 billion in 2014 and more than 48,000 employees in over 60 countries, LabCorp offers innovative solutions to healthcare stakeholders. LabCorp clients include physicians, patients and consumers, biopharmaceutical companies, government agencies, managed care organizations, hospitals, and clinical labs."

LH has delivered decent results over the last four quarters. The company has beaten Wall Street estimates on the bottom line four quarters in a row. They have beaten analysts' revenue estimates three out of the last four quarters. Their most recent report was July 28th. LH announced their Q2 results with revenues up +49% thanks to its Covance acquisition. Management raised their 2015 guidance above Wall Street expectations.

Unfortunately the post-earnings rally did not last very long. Shares reversed under resistance near $130 and its 2015 highs. Since then traders have been selling the rallies and LH has a bearish trend of lower highs. Today LH underperformed the broader market with a -1.27% decline. The stock is poised to breakdown under support in the $114-115 region.

The August 25th low was $114.44. Tonight I am suggesting a trigger to buy puts at $114.25. The point & figure chart is bearish and forecasting a $102.00 price target but I see potential support in the $108-110 region. Don't be surprised to see a temporary bounce in that area.

- Suggested Positions -

Long NOV $110 PUT (LH151120P110) entry $2.85

09/28/15 new stop @ 112.25
09/25/15 triggered @ $114.25
Option Format: symbol-year-month-day-call-strike


Outerwall Inc. - OUTR - close: 57.85 change: +0.92

Stop Loss: 60.55
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 486 thousand
Entry on September -- at $---.--
Listed on September 30, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: Yes, see below

Comments:
10/01/15: OUTR rebounded off its morning lows and closed up +1.6%, outperforming the major indices. Shares did close below short-term resistance at $58.00. Technical traders will note that OUTR did produce a bullish engulfing candlestick reversal pattern but it needs to see confirmation.

Nothing has changed from last night's new play description. Our suggested entry point for bearish trades is $56.35.

Trade Description: September 30, 2015:
Technology and consumer trends are constantly growing and changing. OUTR has failed to keep up and it's business model appears to be outdated.

OUTR is part of the services sector. According to the company, "Outerwall Inc. has more than 20 years of experience creating some of the most profitable spaces for their retail partners. The company delivers breakthrough kiosk experiences that delight consumers and generate revenue for retailers. As the company that brought consumers Redbox® entertainment, Coinstar® money services, and ecoATM® electronics recycling kiosks, Outerwall is leading the next generation of automated retail and paving the way for inventive, scalable businesses. Outerwall kiosks are in neighborhood grocery stores, drug stores, mass merchants, malls, and other retail locations in the United States, Canada, Puerto Rico, the United Kingdom, and Ireland."

The Redbox DVD kiosks business was great while it lasted. Last year the company hit their four billionth rental. Unfortunately today everything is turning digital and consumer viewing habits are moving into streaming services. I'm sure we'll see Redbox kiosks around for years but their growth is over. That's bad news for OUTR since Redbox accounts of 80.5% of their revenues.

Another challenge is OUTR's ecoATM concept. The idea is people bring their old smartphones, tablets, and other electronic gadgets to the kiosks and sell them to OUTR. OUTR then resells the used electronics. One of the biggest categories for their ecoATM business was buying and selling used Apple iPhones. Unfortunately for OUTR Apple just announced a new iPhone leasing program where consumers can get a new upgraded iPhone every year for just $32 a month. Obviously every iPhone user is not going to take advantage of Apple's new program but it will reduce the number of iPhones that end up in an ecoATM kiosk. Plus, the bigger risk is that other mobile phone makers like Samsung might follow Apple's lead and offer their own program that reduces the number of used smartphones in the after market.

The ecoATM concept was already struggling before Apple made their leasing announcement. OUTR more than doubled the number of ecoATM kiosks and yet revenues only rose +9%.

Looking at OUTR's earnings report results have been mixed. The company managed to beat estimates on the bottom line the last couple of quarters but revenues have been flat or down the last three quarters. One of the biggest reasons OUTR has been beating the top line is their aggressive stock buyback program that is reducing the number of shares.

The company's most recent earnings report was July 31st. Q2 revenues were down -0.2% to $545.4 million, which missed estimates. Earnings guidance was in-line with estimates but revenue guidance for 2015 was below Wall Street expectations. OUTR's stock collapsed on the earnings news because of the sharp slowdown in their Redbox business.

Last quarter the number of rental nights per Redbox fell -19% while rentals per kiosk dropped -8.9%. It was the fifth quarter in a row of declines for the Redbox business. Analysts believe this trend will continue for the aging business.

Technically OUTR's stock is bearish. The stock is in a bear market with a -32% drop from its July 2015 highs. OUTR has broken down below its August (market-correction) lows. The stock is also in the process of breaking down below a very key trend line of support on the long-term weekly chart (see below).

Yesterday's intraday low was $56.50. We are suggesting a trigger to launch bearish positions at $56.35. Odds are good we could see OUTR drop toward round-number support at $50.00. The point & figure chart is more bearish and forecasting at $32.00 target.

I have to caution traders that there is an elevated risk of a short squeeze. There are already a lot of bears in this trade. The most recent data listed short interest at 40% of the very small 14.5 million share float. That raises the risk of a short squeeze. Combine that with the company actively buying back stock and any significant bounce is the beginning of a potential squeeze higher. I suggest small positions to limit risk.

Trigger @ $56.35 *small positions to limit risk*

- Suggested Positions -

Buy the NOV $55 PUT (OUTR151120P55)

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike


Tiffany & Co. - TIF - close: 76.58 change: -0.64

Stop Loss: $77.55
Target(s): To Be Determined
Current Option Gain/Loss: +2.1%
Average Daily Volume = 1.2 million
Entry on September 11 at $79.75-
Listed on September 9, 2015
Time Frame: Exit PRIOR to November option expiration
New Positions: see below

Comments:
10/01/15: TIF's oversold bounce appears to be rolling over beneath technical resistance at its 10-dma. Shares closed down -0.8%.

Our stop loss is at $77.55. More aggressive traders may want to move their stop so it's above the 20-dma (currently $79.10) to give TIF more room to maneuver.

No new positions at this time.

Trade Description: September 9, 2015:
2015 has not been a good year for shares of TIF. The stock is down about -24% for the year thanks to a big drop in January and August. The August drop was painful with a -14% slide.

TIF is in the services sector. According to the company, "Tiffany is the internationally-renowned jeweler founded in New York in 1837. Through its subsidiaries, Tiffany & Co. manufactures products and operates TIFFANY & CO. retail stores worldwide, and also engages in direct selling through Internet, catalog and business gift operations."

On January 12th, 2015, TIF issued an earnings warning for 2015 and lowered guidance. Shares fell from about $103.50 to $90. TIF spent months churning sideways and the popped higher in May thanks to better than expected earnings results. Their Q1 results, reported May 27th, beat estimates by a wide margin and revenues came in better than expected in spite of a -5% slide from a year ago.

Three months later the company missed analysts' expectations. TIF reported their Q2 results on August 27th. Wall Street was looking for earnings of $0.91 a share on revenues of $1 billion. TIF said earnings fell -10% to $0.86 a share (a 5-cent miss). Revenues dropped -0.2% to $991 million.

The strong dollar is hurting their sales. Tourists coming to America are spending less in TIF's flagship stores. Management lowered their 2016 guidance. TIF now expects earnings to be -2% to -5% less than last year's $4.20 per share.

Analysts have been lowering their price targets in response to TIF's new guidance but shares are sinking faster than expected.

TIF is currently hovering near round-number support at $80.00. The breakdown in August was significant because TIF has broken below its long-term up trend dating back to the 2009 bear-market lows (see weekly chart below). If TIF breaks down below $80 the next support level could be $70.

- Suggested Positions -

Long NOV $75 PUT (TIF151120P75) entry $2.42

09/28/15 new stop @ 77.55
09/23/15 new stop @ 80.35
09/19/15 new stop @ 82.35
09/11/15 triggered @ $79.75
Option Format: symbol-year-month-day-call-strike


CLOSED BEARISH PLAYS

Caterpillar Inc. - CAT - close: 64.39 change: -0.97

Stop Loss: 65.85
Target(s): To Be Determined
Current Option Gain/Loss: + 81.5%
Average Daily Volume = 5.8 million
Entry on September 22 at $71.12
Listed on September 21, 2015
Time Frame: Exit PRIOR to earnings in late October
New Positions: see below

Comments:
10/01/15: It was another volatile session for CAT. Shares opened higher and spiked to $66.10 only to see the rally quickly reverse. Shares fell to $63.61 intraday. The stock underperformed the broader market with a -1.48% decline on the session. Unfortunately the morning rally hit our stop loss a $65.85.

- Suggested Positions -

NOV $70 PUT (CAT151120P70) entry $3.25 exit $5.90 (+81.5%)

10/01/15 stopped out
09/28/15 new stop @ 65.85
09/26/15 new stop @ 67.05
09/24/15 CAT warned. The company lowered its 2015 and 2016 forecast and announced thousands in job cuts.
09/22/15 triggered on gap down at $71.12, trigger was $71.40
Option Format: symbol-year-month-day-call-strike

chart: