Editor's Note:

The market initially sold off on the very disappointing jobs number. Unfortunately for the bears the weakness didn't last long and a short squeeze quickly followed driving the market higher.

Warning! The market's performance on Friday has generated a potential reversal. The early morning drop on the jobs number and then rebound higher has produced several bullish-reversal looking candlesticks on the daily charts of our active bearish plays. A few were stopped out. The question now is if this bounce (reversal) sees any follow through higher or does it fail?

NKE and BABA have been removed as candidates.

CMP, IFF, LH, and TIF were stopped out on Friday's widespread market rally.


Current Portfolio:


CALL Play Updates

Currently we do not have any active bullish candidates.

Please check tonight's new plays for bullish candidates.



PUT Play Updates

Aon plc - AON - close: 89.78 change: +1.22

Stop Loss: 90.35
Target(s): To Be Determined
Current Option Gain/Loss: -19.7%
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:
10/03/15: Caution - the action in shares of AON on Friday produced a bullish engulfing candlestick reversal pattern. The stock dropped to new lows and hit $86.38 only to bounce back toward $90 with a +4% surge off its Friday low.

The $90.00 level is still resistance but it sure looks like AON is going to test it and potentially break it on Monday morning. The 20-dma (currently $90.28) is also potential resistance. We will move our stop loss down to $90.35.

No new positions at this time.

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

10/03/15 new stop @ 90.35
09/28/15 new stop @ 90.85
09/23/15 triggered @ $88.65
Option Format: symbol-year-month-day-call-strike

chart:


Deckers Outdoor Corp. - DECK - close: 59.01 change: +0.93

Stop Loss: 60.25
Target(s): To Be Determined
Current Option Gain/Loss: -29.8%
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:
10/03/15: DECK followed the broader market lower on Friday morning and higher throughout the rest of the session. Shares added +1.6%, which almost kept pace with the NASDAQ's +1.7% gain. DECK should still have resistance in the $60.00 area. Wait for a failed rally near $60.00 before considering new bearish positions.

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

chart:


Outerwall Inc. - OUTR - close: 58.15 change: +0.30

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:
10/03/15: OUTR underperformed the market on Friday. The major indices surged +1.4% (or more) while OUTR only added +0.5%. This stock is still stuck in the $56.50-58.25 trading range.

If this market continues to bounce I could see OUTR challenging resistance near the $60.00 level. Currently our suggested entry point to buy puts is $56.35 but we might adjust our entry if OUTR delivers a clearly defined failed rally near $60.

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

chart:


The WhiteWave Foods Co. - WWAV - close: 41.78 change: +1.67

Stop Loss: 42.35
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 1.8 million
Entry on October -- at $---.--
Listed on October 01, 2015
Time Frame: Exit PRIOR to earnings in early November
New Positions: see below

Comments:
10/03/15: I have to urge caution on our new WWAV trade. The action on Friday was not kind if you're bearish. The disappointing jobs data sparked a move lower on Friday morning and WWAV hit new lows. The stock also hit our suggested entry point to buy puts at $39.45. Unfortunately the entire market reversed higher and WWAV followed suit. Shares rallied +6% off its Friday low. If WWAV sees any significant follow through higher we could get stopped out at $42.35.

No new positions at this time.

Trade Description: October 1, 2015:
America is slowly starting to eat healthier. That has been a huge tailwind for WWAV who is one of the fastest growing companies in the United States. I personally know a lot of consumers who buy plenty of WWAV's products from their plant-based beverages to their organic milks and creamers. Unfortunately, even a strong, growing company like WWAV can see its stock price retreat. After a two and a half year rally from $15 to $52 WWAV appears to be in correction mode. Actually that's being generous. Shares of WWAV are technically in a bear market with a -23% pullback from its early August highs.

WWAV is in the consumer goods sector. According to the company, "The WhiteWave Foods Company is a leading consumer packaged food and beverage company that manufactures, markets, distributes, and sells branded plant-based foods and beverages, coffee creamers and beverages, premium dairy products and organic produce throughout North America and Europe. The Company also holds a 49% ownership interest in a joint venture that manufactures, markets, distributes, and sells branded plant-based beverages in China.

WhiteWave is focused on providing consumers with innovative, great-tasting food and beverage choices that meet their increasing desires for nutritious, flavorful, convenient, and responsibly-produced products. The Company's widely-recognized, leading brands distributed in North America include Silk®, So Delicious® and Vega® plant-based foods and beverages, International Delight® and LAND O LAKES® coffee creamers and beverages, Horizon Organic® premium dairy products and Earthbound Farm® organic salads, fruits and vegetables. Its popular plant-based foods and beverages brands in Europe include Alpro® and Provamel®, and its plant-based beverages in China are sold under the Silk® ZhiPuMoFang® brand."

Earnings growth has been steady and the company has been making acquisitions. Their most recent report was August 7th when WWAV announced their Q2 results. Earnings were up +8% from a year ago to $0.24 a share. Revenues were up +10.3% to $924 million. That actually missed estimates of $928 million but on a constant currency basis WWAV's revenues were up +14%.

Here's an excerpt from WWAV's earnings release discussing their 2015 forecast, "The company expects continued strong growth in 2015 and is increasing its full year outlook for net sales, adjusted operating income and adjusted diluted earnings per share. Management is increasing its net sales growth expectations for full year 2015 to 15 percent to 16 percent on a constant currency basis, and 12 percent to 13 percent on a reported basis. For third quarter 2015, management expects net sales growth to be 18 percent to 19 percent on a constant currency basis, translating into 14 percent to 15 percent growth on a reported basis."

That forecast wasn't good enough for Wall Street. The stock retreated on this news. A few days later the market started to correct lower. Suddenly the floor just fell away from WWAV's stock. In five trading days the stock plunged from about $50 to almost $35 erasing five months of gains. The stock did see a big bounce back but that rebound has failed under new resistance in the $47.00 area (see chart).

Personally, WWAV is a long-term bullish candidate for me. They are also widely considered to be an acquisition target (which is a risk if you're short the stock). However, on a short-term basis the stock is underperforming. WWAV has spent the last few days hovering near round-number support at $40.00 but it looks like the stock is about to break down.

The stock market seems to be in a risk-off mood and traders are selling anything and everything, especially if it looks rich. Even with the -20% decline from its highs WWAV has a P/E near 50. The point & figure chart is bearish and forecasting at $22.00 target. Tonight we are suggesting a trigger to launch bearish positions at $39.45.

- Suggested Positions -

Long NOV $37.50 PUT (WWAV151120P37.5) entry $1.80

10/02/15 triggered @ $39.45
Option Format: symbol-year-month-day-call-strike

chart:



CLOSED BULLISH PLAYS

Nike, Inc. - NKE - close: 125.21 change: +1.38

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: see below

Comments:
10/03/15: We are temporarily giving up on NKE. The stock has shown significant relative strength this week. We actually really like NKE as a bullish candidate. However, we do not want to buy it at new highs. More aggressive traders might want to consider buying calls on a breakout past its September high ($125.95) and just use a tight stop loss. We are going to wait for a pullback and then jump in. So tonight we are removing NKE as a candidate.

Trade did not open.

10/03/15 removed from the newsletter, suggested entry was a dip to $117.50

chart:


CLOSED BEARISH PLAYS

Alibaba Group - BABA - close: 63.20 change: +4.33

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: see below

Comments:
10/03/15: Whoa! The short covering panic on Friday was very evident in BABA. The stock soared +7.35% and broke through short-term resistance near $60.00. The stock's long-term trend is still bearish and the story on BABA still seems bearish (slowing growth, slowing Chinese economy). However, we do not want to fight this bounce.

Our trade has not opened yet. We are removing BABA as a candidate.

Trade did not open.

10/03/15 removed from the newsletter, suggested entry was $57.15

chart:


Compass Minerals Intl. - CMP - close: 81.65 change: +2.83

Stop Loss: 79.55
Target(s): To Be Determined
Current Option Gain/Loss: -29.7%
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:
10/03/15: Most of the market gapped down on Friday morning and then bounced. Not so much for CMP. Shares were in rally mode almost all day. The stock hit our stop loss at $79.55 and just kept right on going with a +3.59% gain on Friday. The bounce finally stalled near technical resistance at CMP's 50-dma.

- Suggested Positions -

DEC $75 PUT (CMP151218P75) entry $3.20 exit $2.25 (-29.7%)

10/02/15 stopped @ 79.55
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

chart:


International Flavors & Fragrances Inc. - IFF - close: 106.81 chg: +2.93

Stop Loss: 105.05
Target(s): To Be Determined
Current Option Gain/Loss: -28.6%
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:
10/03/15: Traders bought the dip in IFF near $102.50 on Friday morning and the stock soared more than +4% off its lows. IFF broke through several layers of short-term resistance and also hit our stop loss at $105.05.

- Suggested Positions -

NOV $100 PUT (IFF151120P100) entry $2.80 exit $2.00 (-28.6%)

10/02/15 stopped out
09/28/15 new stop @ 105.05
09/23/15 triggered @ $104.45
Option Format: symbol-year-month-day-call-strike

chart:


Laboratory Corp. Of America - LH - close: 112.29 change: +2.11

Stop Loss: 112.25
Target(s): To Be Determined
Current Option Gain/Loss: +12.3%
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:
10/03/15: After a seven-day plunge to new lows shares of LH managed a big, three-day bounce. The market's rally on Friday boosted LH to a +1.9% gain on the session. Shares hit our stop loss at $112.25.

Our play is closed but readers may want to keep LH on their watch list. The $115-120 area looks like it should be major resistance for the stock. I would not be surprised to see this bounce roll over.

- Suggested Positions -

NOV $110 PUT (LH151120P110) entry $2.85 exit $3.20 (+12.3%)

10/02/15 stopped out
09/28/15 new stop @ 112.25
09/25/15 triggered @ $114.25
Option Format: symbol-year-month-day-call-strike

chart:


Tiffany & Co. - TIF - close: 77.90 change: +1.32

Stop Loss: $77.55
Target(s): To Be Determined
Current Option Gain/Loss: -12.4%
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:
10/03/15: TIF produced a +3.8% rally off its Friday morning low. That was enough to lift shares past its 10-dma and to our stop loss at $77.55. Our play is closed. If you're still in TIF keep an eye on the 20-dma near $78.93, that's the next level of resistance.

- Suggested Positions -

NOV $75 PUT (TIF151120P75) entry $2.42 exit $2.12 (-12.4%)

10/02/15 stopped out
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

chart: