Option Investor

Daily Newsletter, Tuesday, 9/22/2015

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Commodity Rout

by Jim Brown

Click here to email Jim Brown

Several downgrades to the outlook for China and the emerging markets weighed on the markets sending the Dow down -290 and the Nasdaq losing -114 at the lows. Copper declined -4.3% to $2.285 intraday to drag the entire commodity complex lower.

Market Statistics

Overnight the Asian Development Bank cut growth estimates for China from 7.2% to 6.8% and India from 7.8% to 7.4%. Credit Suisse released a report titled "Race to the Bottom" saying "There is little to like about most commodities over the medium-term, just relative degrees of unloveliness." The report outlined the long-term problems of falling demand and rising supply.

This commodity weakness increased the pressure on European markets that began with a decline because of the drop in the automakers. Volkswagen (VLKAY) shares declined -15% to $25.60 after the CEO issued a public apology for deceiving the public and regulators by including illegal software meant to cheat on emissions testing. Originally, the EPA claimed there were 482,000 vehicles with illegal software. That was raised to as many as 11 million today. The company said it would take a $7 billion charge to earnings for the recall. There is a worry, and rightly so, that this will turn into a criminal case rather than just a fine. Volkswagen shares have declined -33% since the news broke last week. There are no options.

French Finance Minister Michel Sapin called for a probe of the entire automobile sector in Europe to make sure there was no misconduct by other manufacturers.

The other European automakers were also down as investors were forced to sell other stocks to cover margin losses in Volkswagen. Porsche was down -17%, Daimler -7% and BMW -6%. The German stock market declined -3.8%, French CAC-40 -3.4%, FTSE-100 -2.8%. The German EWG ETF declined -4.1% to two-year lows. With those declines overseas it led to significant declines in the U.S. at the open.

The uncertainty over what the Fed said and did last week is continuing to weigh on the markets. The Fed said it was not hiking because of worries over slowing economic growth, especially in China, and that impact on the global markets and inflation. Despite the multiple warnings about global worries, the Fed said October was still on the table for a rate hike. Unfortunately, you cannot have it both ways. You cannot warn about events that could take 3-6 months to develop and then warn we could hike rates in five-weeks.

Investors do not know which way to go. Is there a global economic problem or not? Apparently, the problem does exist given all the declines in commodities and multiple entities slashing growth estimates. This suggests the Fed's continued warning about a potential rate hike in 2015 is a protective measure. If they said a potential hike was off the table until March we could see investors run for the sidelines with worry over what the Fed knows that we do not. By continuing to talk about the potential for a hike in the weeks ahead they are implying conditions are better than they are and they are keeping U.S. economic sentiment mildly bullish. At this point, I do not think anybody trusts the Fed. They lost credibility by not hiking and now they may be forced to hike in October to restore that credibility. That assumes the global economy does not get worse over the next five weeks.

In the U.S., the economic reports were not pretty. The Richmond Fed Manufacturing Survey for September fell into contraction territory at -5.0, down from +12.6 in July and zero in August. The internal components fell sharply lower with new orders falling from +1.0 to -12.0 and backorders dropping even further into contraction territory from -15.0 to -24.0. Those two components suggest the next survey will fall even farther into contraction territory. Manufacturing cannot move higher with sharply declining orders.

Employment rose slightly but the average workweek declined from +3.0 to -12.0 suggesting there will be layoffs in the future.

The separate services survey declined from 30 to 10 but the big news was in employment. The composite component declined from 18 to 5 with retail falling from 5 to -18. With the holidays ahead, we should not be seeing that significant a decline in retail employment. All the components in the services sector declined.

Manufacturing Survey

The calendar for Wednesday contains no important reports. The Chinese PMI due out at 9:45 tonight could be a market mover in either direction. Estimates are for a decline to 47.5. A stronger than expected decline could strengthen views that Asia is melting down. A stronger than expected gain could suggest the worries are overblown.

I added the Pope's mass in Philadelphia on Sunday. There is expected to be more than two-million people in attendance. It will be the largest and highest security event in U.S. history. Even with that security, it will still be the largest potential terrorist target in history. I do not need to tell you what would happen to the market if there were a successful attack.

In stock news Carnival Corp (CCL) reported its third consecutive decline in revenue and they blamed it on the strength in the dollar reducing travelers from Europe. Ticket revenues declined -2.4% to $3.63 billion in Q2 and that is normally their best quarter. Total revenue declined -1.3% to $4.89 billion. Earnings were $1.75 per share compared to estimates for $1.63. The company lowered guidance for the current quarter to a range of 36-40 cents and analysts were expecting 45 cents. They did upgrade full year guidance from $2.35-$2.50 to $2.56-$2.60 per share. The company did profit from a -33% decline in fuel prices to $439 per ton. Shares declined -5% on the lowered Q3 guidance.

Shares of NCR Corp (NCR) declined -7% after a story broke that Blackstone Group had not been able to reach a deal to acquire NCR. Blackstone had been trying to locate a partner to help fund a bid worth up to $10 billion. Potential partnerships with Bain Capital and Carlyle Group both fell apart because of disagreements over price. Sources warned that the eventual acquisition of NCR was now in doubt.

Shares of Office Depot (ODP) and Staples (SPLS) both declined after the NY Post said Deborah Feinstein, the head of the FTC Bureau of Competition, is going to oppose the deal. She said the combination of the two chains would leave the U.S. with only one major office supply chain and that would raise antitrust issues. Staples announced it was buying Office Depot in February for about $6 billion. One remedy floated was for Staples to divest its delivery business.

Autozone (AZO) reported earnings of $12.75 compared to estimates for $12.67 per share. Revenue of $3.29 exceeded estimates for $3.25 billion. Same store sales rose +4.5% and well above estimates for 3.2%. Analysts liked the earnings saying the margin squeeze from expansion expenses were offset by higher margins on higher dollar products. Shares were up $15 early in the day but traders took profits at the close to end flat.

Conagra Foods (CAG) reported earnings of 45 cents that beat by a nickel but revenue disappointed. Revenue of $2.79 billion fell short of estimates for $3.67 billion. The company refrained from issuing guidance saying it will delay until it is closer to divesting its private label business and has some better cost reduction targets. The market did not like those comments and shares declined -7% on the news.

Darden Restaurants (DRI) reported earnings of 68 cents that beat estimates for 58 cents. Revenue of $1.69 billion also beat estimates for $1.68 billion. Same store sales rose +3.4% with Olive Garden sales up +3.4% and Longhorn Steakhouse sales up +7.6%. They guided to full year earnings in the range of $3.15-$3.30 compared to prior guidance of $3.05-$3.20. Analysts were expecting $3.14.

CarMax (KMX) reported earnings of 82 cents that beat estimates for 75 cents. However, revenue of $3.88 billion missed estimates for $3.94 billion. Used vehicle sales rose +7.9% to $3.2 billion. Unit sales rose +9.2% to 156,516 vehicles but the average selling price declined -1.1% to $19,983. Same store sales rose +4.6%. New vehicle sales declined -13.5% to $60.5 million due to a -12.9% drop in the number of vehicles to 2,248. The average selling price declined -0.7% to $26,799. Wholesale vehicle revenues rose +11.6% to $591.8 million on an 8% increase in units sold to 106,522 vehicles. I did not think the earnings were that bad but shares declined -4.47% on the news.

The earnings schedule for Wednesday is weak with Lennar (LEN) the only major report. Thursday remains the big day with Nike and BBBY.

For those keeping track, out of the six companies giving guidance today, five of them were negative and only one positive. Darden was positive and CCL, ASPN, CAG, GIS and FDS gave negative guidance overall.

Crude oil dipped to $45.15 at the low but rallied on short covering just before the close to end the day at $46.23. Crude typically rallies late on Tuesdays because the API inventories come out after the bell and the EIA inventories are out on Wednesday morning. The API inventories showed a decline of -3.7 million barrels but the numbers rarely agree with the EIA numbers on Wednesday. Crude rallied about 25 cents to $46.54 after the report. That suggests traders are skeptical of the inventory decline.


The S&P declined sharply to a low of 1,929 intraday. There was a +13 point rebound late in the afternoon and it was broad based. However, I would not try to hang my hat on that as suggesting a rally tomorrow. The S&P futures are down -6.50 as I write this commentary but that can change in a heartbeat.

The odds are growing that we are going to retest the August lows. We may not decline all the way to 1,867 but I would not be surprised to see a print under 1,900. We are in the worst three weeks of the year for the market in normal years and there is certainly a lot of negativity heading our way from overseas.

If I had to pick a potential bounce point, it would be 1,912 and the post August lows in early September.

The Dow dipped below interim support at 16,335 but recovered to that level at the close. The intraday low of 16,221 was right at the level we saw as support two weeks ago. That would be our line in the sand for Wednesday followed by 16,030 and the support from early September.

The individual charts for the Dow stocks have not improved. The only change was in the amount of day-to-day volatility. I would not be surprised to see that 16,030 level tested but that could be a decent buying point.

The Nasdaq was crushed intraday with a -114 drop but closed with a +40 point rebound. The biggest, best-loved stocks were the ones that were sold the hardest. Facebook (FB) lost -3% on no news. Biotech stocks were sold hard again ahead of Clinton's proposal on drug price controls in the afternoon. Now that the proposal is public, the reality may sink in. She cannot make any changes if/until she is elected and then only if she can get those changes through Congress. It will be three years before there is any material risk for price controls. Stocks with extreme exposure to price controls like Gilead Sciences (GILD) actually closed positive for the day after an early decline. That could carry over into the Nasdaq on Wednesday.

Shares of the Nasdaq dipped below short-term support at 4,760 with future support at 4,635. Resistance would be significantly higher at 4,875.

The sentiment index for the market closed well under support. The Russell 2000 dipped to 1,137 and closed at 1,143 but 1,150 was strong support. With that support broken is suggests there is more trouble ahead. The next support level is around 1,130 and then 1,105.

The combination of weakness in China, Fed indecision and conflicting Fed guidance, seasonal history and declining earnings should continue to weigh on the markets. The S&P has only gained in the week after September expiration five times in the last 17 years. With all the negativity weighing on the market today, I do not see any reason for a sudden rally. However, there is always a short squeeze lurking in our future. I would be refining my shopping list on the assumption we are going to see a continued decline.

Enter passively, exit aggressively!

Jim Brown

Send Jim an email


If you like the market commentary you have been receiving and you are on a free trial then now is the time to subscribe. Don't wait until you miss a newsletter to decide you want to take the plunge.

subscribe now


New Plays

Consumer Goods & Energy

by James Brown

Click here to email James Brown


GoPro, Inc. - GPRO - close: 33.31 change: +1.04

Stop Loss: None, no stop at this time.
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on September -- at $---.--
Listed on September 22, 2015
Time Frame: Exit prior to earnings in late October
Average Daily Volume = 8.0 million
New Positions: Yes, see below

Company Description

Trade Description:
GPRO is down nearly 50% from its early August highs. All the bad news might be baked into the stock as shares near their IPO first day's closing price of $31.34.

If you're not familiar with GPRO here is the company's rather self-confident description, "GoPro, Inc. is transforming the way consumers capture, manage, share and enjoy meaningful life experiences. We do this by enabling people to self-capture engaging, immersive photo and video content of themselves participating in their favorite activities. Our customers include some of the world's most active and passionate people. The quality and volume of their shared GoPro content, coupled with their enthusiasm for our brand, virally drives awareness and demand for our products.

What began as an idea to help athletes document themselves engaged in their sport has become a widely adopted solution for people to document themselves engaged in their interests, whatever they may be. From extreme to mainstream, professional to consumer, GoPro has enabled the world to capture and share its passions. And in doing so the world, in turn, is helping GoPro become one of the most exciting and aspirational companies of our time."


GPRO came to market with its IPO in June 2014. The stock priced at $24.00 a share and opened for trading at $28.65. Shares closed at $31.34 on their first day of trading. A few months later (October) GPRO was challenging $100 a share. That proved to be the peak (so far) for the stock. As a high-growth, momentum name, investors will eventually jump back in.

GPRO's Earnings Growth

GPRO reported their 2015 Q1 results on April 28th. Wall Street was expecting a profit of $0.18 per share on revenues of $341.7 million. GPRO beat estimates with a profit of $0.24 a share. Revenues were up +54% from a year ago to $363 million.

Management said it was their second highest revenue quarter in history. Their GAAP results saw gross margins improve from 40.9% in Q1 2014 to 45.1% today. Their net income attributable to common stockholders increased 98.2% compared to the first quarter of 2014. International sales surged +66% and accounted for just over half of total sales in Q1 2015. GPRO shipped 1.3 million devices in the first quarter. This was the third quarter in a row of more than one million units.

GPRO management raised their guidance. They adjusted their Q2 revenue forecast to be in the $380-400 million range with earnings in the $0.24-0.26 region. Analysts were only forecasting $335 million with earnings at $0.16 a share.

GPRO reported its Q2 report on July 21st. Results were way above expectations. Analysts were expecting earnings of $0.26 per shares on revenues of $396 million. GPRO said Q2 earnings came in at $0.35 per shares. That's a +337% improvement from a year ago. Revenues were up +71.7% to $419.9 million, significantly above the estimate. Gross margins improved from 42.2% to 46.4%.

Naturally GPRO management was enthusiastic. GoPro Founder and CEO, Nicholas Woodman, commented on their quarterly results saying, "I couldn't be more proud of our aggressive pace of innovation. With the introduction of HERO4 Session and HERO+ LCD, we've launched five new cameras in the past 10 months, exciting both new and existing customers and contributing to strong second quarter results. Our core business is enjoying terrific momentum as we charge forward into attractive adjacent markets."

Bearish Argument

The biggest argument against GPRO is competition from a Chinese rival Xiaomi who has produced a competitive action camera that they're selling for about half of GPRO's similar model. GPRO critics are worried this could kill GPRO's growth in China and the rest of Asia.

This past weekend Barron's published a bearish thesis on GPRO suggesting the company was a one-trick pony. Actually the article said GPRO was a "one product wonder" and compared it to companies like Blackberry who lost to competitors who came after Blackberry had already established the market.

The Barron's analyst also suggested that GPRO was still overvalued and could fall to $25.00 a share. Shares of GPRO plunged more than -8% on Monday in reaction to the Barron's article.

Today GPRO CEO Nick Woodman defended his company and said, "I think to say that we're a one-trick pony is shortsighted. The content that the world loves has grown so much value into our brand." Woodman is suggesting that GPRO is more than a product company and should also be considered a media company. We are not going to argue either way on the media versus consumer products company debate. Tonight's trade is more technical.

The Trade

The selling in GPRO may be nearing a capitulation. Average daily volume is about 8 million shares. These past three weeks has seen volume surge into the 13-19 million zone almost every day. Shares are also down -48% from their August 10th, 2015 high of $64.74. That's a pretty sharp decline in only six weeks.

We suspect that bulls will defend GPRO near its IPO debut in the $28-30 range. Tonight we are suggesting a buy-the-dip entry point to open bullish positions at $30.00. This is a speculative, higher-risk trade. Use small positions to limit risk.

Buy-A-Dip Trigger @ $30.00

- Suggested Positions -

Buy GPRO stock @ $30.00

- (or for more adventurous traders, try this option) -

Buy the NOV $35 CALL (GPRO151120C35) current ask $3.25
option price is a current quote and not a suggested entry price.

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

Daily Chart:

Weekly Chart:


Murphy Oil Corp. - MUR - close: 26.20 change: -1.36

Stop Loss: 29.05
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on September -- at $---.--
Listed on September 22, 2015
Time Frame: Exit prior to earnings in late October
Average Daily Volume = 2.4 million
New Positions: Yes, see below

Company Description

Trade Description:
The outlook for crude oil continues to worsen. We are bringing MUR back to the Premier Investor newsletter.

Here's an updated trade description:

The crash in crude oil prices in the second half of 2014 was pivotal turning point for the U.S. energy industry. Suddenly the booming oil and gas sector had its future being questioned with the price of oil now unprofitable for many drillers. Oil has managed a bounce from its 2015 lows while many of the oil and gas producers are still seeing their stocks decline.

MUR is in the basic materials sector. According to the company, "Murphy Oil Corporation is an independent exploration and production company with a strong, oil-weighted portfolio of global offshore and onshore assets. Exploration activities are focused in four main regions: Deepwater Gulf of Mexico, the Atlantic Margin, Southeast Asia and Australia."

The company reduced its 2015 capex outlook by -33% when they reported their 2014 Q4 results back in January. MUR's Q1 results came out in May. Profits evaporated with MUR delivering a loss of ($1.11) per shares versus a profit of $0.96 a year ago.

Management is trying to prop up their floundering stock price. On May 20th the company announced an accelerated stock buyback program of $250 million. This is part of a previously announced $500 million repurchase program from August 2014. The buyback doesn't seem to be working.

Goldman Sachs downgraded MUR to a "sell" in late May. Nearly a month later UBS has also downgraded MUR to a "sell". The UBS analyst expressed concern that MUR's production would likely decline in 2015 and 2016 since the company has cut back on investment. (edit: UBS later pulled its "sell" rating after MUR reported earnings on July 30th). Soon other analysts jumped on the downgrade bandwagon. Morgan Stanley and Oppenheimer have both downgraded MUR in the last several weeks. The Oppenheimer analyst expressed concern that MUR would face a significant cash flow deficit and would need to fund operations through cash on hand and additional debt.

MUR's most recent earnings report on July 30th did beat Wall Street estimates but the company posted a loss of $0.48 per share versus estimates for a loss of $0.54.

Shares of MUR have continued to race lower with investors selling every rally. The trend of lower highs and lower lows has pushed MUR to levels not seen since early 2004. The point & figure chart is bearish and forecasting a long-term target of $12.00. I see potential support at $20.00. The September 11th low was $25.77. Tonight we are suggesting a trigger to launch bearish positions at $25.65.

Trigger @ $25.65

- Suggested Positions -

Short MUR stock @ $25.65

- (or for more adventurous traders, try this option) -

Buy the 2016 JAN $25 PUT (MUR150115P25) current ask $2.20
option price is a current quote and not a suggested entry price.

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

Daily Chart:

Weekly Chart:

In Play Updates and Reviews

Commodity Weakness Leads Market Retreat

by James Brown

Click here to email James Brown

Editor's Note:
Another big drop in commodities helped lead the market's decline on Tuesday. A bounce in the dollar and worries over global weakness fueled a down day for commodities and related stocks.

We closed the QSR trade this morning.

HOS and IP hit our bearish entry triggers today.

Current Portfolio:

BULLISH Play Updates

CDW Corp. - CDW - close: 40.33 change: -0.23

Stop Loss: 39.85
Target(s): To Be Determined
Current Gain/Loss: -2.1%
Entry on September 14 at $41.20
Listed on September 12, 2015
Time Frame: Exit prior to earnings in early November
Average Daily Volume = 1.1 million
New Positions: see below

09/22/15: CDW has seen a -4.7% pullback from its recent high near $42.00 to today's low near $40.00. It was nice to see round-number support at $40 hold and CDW pared its loss today to -0.5%. I would be tempted to buy a bounce from here but use small positions to limit risk.

Trade Description: September 12, 2015:
Consistent earnings and revenue growth have helped drive shares of CDW to new all-time highs.

CDW is in the technology sector. According to the company, "CDW (NASDAQ: CDW) is a Fortune 500 company and a leading provider of integrated information technology (IT) solutions in the U.S. and Canada. We help our customer base of approximately 250,000 small, medium and large business, government, education and healthcare customers by delivering critical solutions to their increasingly complex IT needs. Founded in 1984, CDW employs more than 7,200 coworkers. In 2014, the company generated net sales of more than $12.0 billion.

Our broad array of offerings range from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. We are technology 'agnostic,' with a product portfolio that includes more than 100,000 products from more than 1,000 brands. We provide our products and solutions through our sales force and service delivery teams, consisting of more than 4,500 coworkers, including over 1,800 field sellers, highly skilled technology specialists and advanced service delivery engineers."

Recent quarterly reports have seen CDW beating Wall Street estimates on both the top and bottom line. Investors were very happy to see the company's most recent report on August 3rd. Earnings were up +20% from a year ago and revenues beat expectations. Management said they expect to grow +2-to-3% above the U.S. IT market in 2015.

Shares of CDW surged on its August 3rd report. When the market corrected sharply lower in late August shares of CDW actually weathered the storm relatively well. The stock filled the gap from its August 3rd earnings pop and then bounced. Now shares have broken through major resistance at $40.00.

Friday's high was $41.11. We are suggesting a trigger to open bullish positions at $41.20.

- Suggested Positions -

Long CDW Stock @ $41.20

- (or for more adventurous traders, try this option) -

Long DEC $45 CALL (CDW151218C45) entry $1.15

09/19/15 new stop @ 39.85
09/14/15 triggered @ $41.20
Option Format: symbol-year-month-day-call-strike

Ingram Micro Inc. - IM - close: 26.78 change: -0.70

Stop Loss: 25.75
Target(s): To Be Determined
Current Gain/Loss: -3.8%
Entry on September 09 at $27.85
Listed on September 8, 2015
Time Frame: Exit prior to earnings in late October
Average Daily Volume = 1.0 million
New Positions: see below

09/22/15: Uh-oh! IM displayed relative weakness with a -2.5% decline today. Shares appear to have broken down from their recent $27-28 trading range. More conservative traders may want to raise their stop loss. No new positions at this time.

Trade Description: September 8, 2015:
IM looks like it is about to break out from a huge consolidation pattern.

The company operates in the services sector. According to the company, "Ingram Micro helps businesses fully realize the promise of technology® - helping them maximize the value of the technology that they make, sell or use. With its vast global infrastructure and focus on cloud, mobility, supply chain and technology solutions, Ingram Micro enables business partners to operate more efficiently and successfully in the markets they serve.

No other company delivers as broad and deep a spectrum of technology and supply chain services to businesses around the world. Founded in 1979, Ingram Micro's role as a leader and innovator in technology and supply chain services has fueled its rise to the 69th ranked corporation in the FORTUNE 500.

Ingram Micro amplifies the value of its position at the intersection of thousands of vendor, reseller and retailer partners by customizing and delivering highly targeted applications for industry verticals, business to business customers and commercial needs. From provisioning solutions for system integrators working at the heart of the network to offerings through the full lifecycle of mobile devices, SMB to global enterprise software and computing, point of sale to cloud services, professional AV to physical security-Ingram Micro is trusted by customers to have the expertise and resources to help them define and push the boundaries of what's possible.

The company supports global operations by way of an extensive sales and distribution network throughout North America, Europe, Middle East and Africa, Latin America and Asia Pacific."

The company's most recent earnings report was July 30th. Wall Street was expecting a profit of $0.54 per share on revenues of $10.9 billion. IM delivered $0.55 cents. Revenues were down -3.3% to $10.55 billion. However, if you back out the impact of currency headwinds then IM's results look a lot better. Negative currency translations shaved off -8% from their revenues.

IM management's guidance was a little soft but they announced the initiation of a $0.10 per share dividend and that they were boosting their stock buyback program by $300 million. The stock soared on this news. Shares rallied from $24.50 to $27.25 the next day.

IM was not immune to the market's late-August crash but investors bought the dip at support near its July lows. Shares have since erased the sell-off. Now IM is poised to breakout past resistance and what looks like a consolidation that started in early 2014.

A rally past $28.00 would generate a new buy signal on the point & figure chart. We want to jump in a little earlier. Tonight we are suggesting a trigger to open bullish positions at $27.85.

NOTE: I want to caution readers about the options. The spreads on most of IM's options are a little bit wide. Actually some of them are probably too wide. Be careful with the options.

- Suggested Positions -

Long IM stock @ $27.85

- (or for more adventurous traders, try this option) -

Long DEC $30 CALL (IM151218C30) entry $1.15

09/15/15 Caution - IM did not participate in the market's rally today
09/09/15 triggered @ $27.85
Option Format: symbol-year-month-day-call-strike

Starbucks - SBUX - close: 57.12 change: -0.42

Stop Loss: 54.75
Target(s): To Be Determined
Current Gain/Loss: +3.6%
Entry on August 27 at $55.15
Listed on August 25, 2015
Time Frame: Exit prior to earnings in October
Average Daily Volume = 8.0 million
New Positions: see below

09/22/15: Starbucks addicts can rejoice. The company just announced that customers can order their Starbucks coffee before you get to the store. Consumers with the Mobile Order & Pay app on their Apple iOS and Android smartphones can place and pay for their order before they get there. This new service is available at more than 7,400 company-owned stores.

Today's announcement was not necessarily new news as the company had been hinting at it for a while. Shares of SBUX still fell -0.7% during today's broad-based market decline. Nimble traders can look for SBUX to dip near support at $56.00 as a potential entry point.

Trade Description: August 25, 2015:
The sell-off in shares of SBUX is a bit ridiculous. The Thursday-Friday-Monday sell-off in the market saw SBUX fall from $57.59 to $42.05. That was a -27% drop in less than three days. The company's fundamentals didn't deteriorate -27%. The recent market turmoil presents an opportunity to buy SBUX. Jump to the bottom of this play description for details.

Here's a little bit about SBUX and the company's performance:

The world seems to have an insatiable appetite for coffee. Starbucks is more than happy to help fill that need. The first Starbucks opened in Seattle back in 1971. Today they are a global brand with locations in 66 countries. SBUX operates more than 21,000 retail stores with more than 300,000 workers.

A few years ago Business Insider published some facts on SBUX. The average SBUX customer stops by six times a month. The really loyal, top 20% of customers, come in 16 times a month. There are nearly 90,000 potential drink combinations at your local Starbucks. The company spends more money on healthcare for its employees than it does on coffee beans.

The company's earnings results were only mediocre most of 2014 year. You can see the results in SBUX's long-term chart below. After incredible gains in 2013 SBUX has essentially consolidated sideways in 2014. SBUX broke out of that sideways funk after it reported earnings in January 2015.

Five-Year Plan

In late 2014 SBUX announced their five-year plan to increase profitability. Here's an excerpt from a company press release:

"The seismic shift in consumer behavior underway presents tremendous opportunity for businesses the world over that are prepared and positioned to seize it," Schultz said (Howard Schultz is the Founder, Chairman, President, and CEO of Starbucks). "Over the next five years, Starbucks will continue to lean into this new era by innovating in transformational ways across coffee, tea and retail, elevating our customer and partner experiences, continuing to extend our leadership position in digital and mobile technologies, and unlocking new markets, channels and formats around the world. Investing in our coffee, our people and the communities we serve will remain at our core as we continue to redefine the role and responsibility of a public company in today's disruptive global consumer, economic and retail environments."

"Starbucks business, operations and growth trajectory around the world have never been stronger, and we are more confident than ever in our ability to continue to drive significant growth and meet our long term financial targets," said Troy Alstead, Starbucks chief operating officer. "We have more customers visiting more stores more frequently, both in the U.S. and around the world, than at any time in our history. And we expect both the number of customers visiting our stores and the amount they spend with us to accelerate in the years ahead. With a robust pipeline of mobile commerce innovations that will drive transactions and unprecedented speed of service, Starbucks is ushering in a new era of customer convenience. We believe the runway of opportunity for Starbucks inside and outside of our stores is both vast and unmatched by any other retailer on the planet."

The company believes they can grow revenues from $16 billion in FY2014 to almost $30 billion by FY2019. To do that they will expand deeper into regions like China, Japan, India, and Brazil. SBUX expects to nearly double its stores in China to over 3,000 locations in the next five years

They're also working hard on their mobile ordering technology to speed up the experience so customers don't have to wait in line so long at their busiest locations. This will also include a delivery service.

Part of the five-year plan is a new marketing campaign called Starbucks Evening experience. The company wants to be the "third place" between home and work. After 4:00 p.m. they will start offering alcohol, mainly wine and beer, in addition to new tapas-like smaller plates.

The company recently launched its first ever Starbucks Reserve Roastery and Tasting Room in Seattle, near their iconic first retail store. The new roastery is supposed to be the ultimate coffee lovers experience. CEO Schultz said they will eventually open up about 100 of these Starbucks Reserve locations.

Earnings results:

It was a very strong holiday period for SBUX thanks in part to astonishing gift card sales. The amount of money loaded onto SBUX gift cards during the holidays surged +17% to a record $1.6 billion. One out of every seven Americans received a SBUX gift card. The company also saw significant growth overseas with its China and Asia-Pacific business soaring +85% to sales of $495 million. Their mobile transactions have reached seven million transactions a week.

SBUX reported its Q2 (2015) on April 23rd. Earnings of $0.33 a share were in-line with estimates. Revenues were up +17.8% to $4.56 billion, slightly above expectations. It was their strongest growth in four years. Customers are responding well to new drink options and an updated food menu. They're also developing new delivery options, mobile pay options, and alcoholic drinks available at select locations.

Worldwide same-store sales grew +7%. This was significantly above estimates. It also marked the 21st consecutive quarter where SBUX's comparable store sales were +5% or more.

The company issued mixed guidance. The stronger dollar is having an impact. They see fiscal 2015 results in the $1.55-1.57 range. That compares to Wall Street estimates for $1.57 per share. However, the company's revenue estimates are more optimistic. They're forecasting +16-18% sales growth into the $19.1-19.4 billion zone compares to analysts' estimates of $19.1 billion.

The trend of earnings pops continued in July with shares gapping up to new all-time highs following its Q2 report on July 23rd. Earnings were $0.42 per share, a penny above estimates. Revenues were up +17.5% to $4.88 billion, just a hair above expectations. Global same-store sales were up +7% and their non-GAAP operating margin improved 100 basis points to 19.5%. Management is still guiding 2015 revenues to rise +17% in the $19.1-19.4 billion range.

Recent Sell-off & Entry Point

The recent stock market bloodletting saw SBUX breakdown below a multitude of support levels. The weakness on Monday morning was just ridiculous. SBUX opened on Monday, August 24th near technical support at its 200-dma and then it plunged to $42.05. The stock bounced back to $50 by the closing bell. The rebound struggled today but SBUX displayed relative strength with a +1.48% gain versus a -1.35% drop in the S&P 500 and a -0.4% decline in the NASDAQ.

If the stock market continues to sink we want to take advantage of the weakness in SBUX and launch bullish positions on a dip near its 200-dma. Today the simple 200-dma is at $48.04. We will set our entry trigger at $48.00. We are starting this play without a stop loss. More conservative investors might want to wait on launching positions since the next few days could be volatile for the broader market (SBUX included).

- Suggested Positions -

Long shares of SBUX @ $55.15

- (or for more adventurous traders, try this option) -

Long NOV $57.50 CALL (SBUX151120C57.5) entry $2.00

09/16/15 new stop @ 54.75
08/29/15 new stop at $51.15
08/27/15 Triggered @ $55.15
08/26/15 Entry point adjustment - move the buy-the-dip trigger from $48.00 to $50.00. Plus, add a secondary trigger to open bullish positions at $55.15.
Option Format: symbol-year-month-day-call-strike

Zafgen, Inc. - ZFGN - close: 43.27 change: -0.85

Stop Loss: $41.15
Target(s): To Be Determined
Current Gain/Loss: + 7.2%
Entry on September 17 at $40.35
Listed on September 16, 2015
Time Frame: Exit 6 to 8 weeks
Average Daily Volume = 232 thousand
New Positions: see below

09/22/15: Biotech stocks continued to sink today following yesterday's punishment. The IBB managed a decent bounce off its intraday lows. Meanwhile ZFGN fell -1.9%.

More conservative investors may want to raise their stop loss. No new positions at this time.

Trade Description: September 16, 2015:
Most of us have a few extra pounds hugging our waistline. Did you know that more than one third of adults in the U.S. is officially obese? That's the story from the Centers for Disease Control and Prevention. The danger of being too overweight can lead to higher rates of heart disease, diabetes, stroke, and even cancer. ZFGN wants to change that.

ZFGN is in the healthcare sector. According to the company, "Zafgen (ZFGN) is a biopharmaceutical company dedicated to significantly improving the health and well-being of patients affected by obesity and complex metabolic disorders. Zafgen is focused on developing novel therapeutics that treat the underlying biological mechanisms through the MetAP2 pathway. Beloranib, Zafgen's lead product candidate, is a novel, first-in-class, twice-weekly subcutaneous injection being developed for the treatment of multiple indications, including severe obesity in two rare diseases, Prader-Willi syndrome and obesity caused by hypothalamic injury, including craniopharyngioma-associated obesity; and severe obesity in the general population. Zafgen is also developing ZGN-839, a liver-targeted MetAP2 inhibitor, for the treatment of nonalcoholic steatohepatitis, or NASH, and abdominal obesity, as well as second-generation MetAP2 inhibitors. Zafgen aspires to improve the lives of patients through targeted treatments and has assembled a team accomplished in bringing therapies to patients with both rare and prevalent metabolic diseases."

Regular readers know that biotech stocks can be high-risk, high-reward trades. The right headline could send ZFGN soaring while the wrong one could see it gapping down at the opening bell. Odds are if the market is going to rally then biotechs tend to outperform as bullish investors swing for the fences and bet on a big return.

Shares of ZFGN priced at $16.00 when it IPO-ed on June 19, 2014. Shares opened at $20.00. Shares hit an intraday high near $55 in March this year. Since then ZFGN has been consolidating. The consolidation has taken a bit of a bullish bias with higher lows if we discount the market's plunge in August.

Today ZFGN is poised to breakout past major resistance at the $40.00 level. A breakout here could spark some short covering. The most recent data listed short interest at 15% of the very small 20 million-share float. The point & figure chart is already bullish with a quadruple top breakout buy signal and a $54.00 target. Tonight we are suggesting a trigger at $40.35 to launch bullish positions.

NOTE: ZFGN does have options but the prices and the spreads are outrageous. I would avoid them.

- Suggested Positions -

Long ZFGN stock @ $40.35

09/19/15 new stop @ 41.15
09/17/15 triggered @ $40.35

BEARISH Play Updates

Hornbeck Offshore Services - HOS - close: 15.01 change: -0.48

Stop Loss: 17.05
Target(s): To Be Determined
Current Gain/Loss: +1.4%
Entry on September 22 at $15.22
Listed on September 21, 2015
Time Frame: Exit prior to earnings in late October
Average Daily Volume = 925 thousand
New Positions: see below

09/22/15: Our new bearish play on HOS is off to a good start. Commodities, including crude oil, sank again today. This helped push energy stocks lower. Our suggested entry point was $15.30 but HOS gapped open lower at $15.22. The stock dipped to $14.61 before settling near $15 with a -3.0% decline.

Tonight we are adding a stop loss at $17.05.

Trade Description: September 21, 2015:
HOS has been crushed over the last couple of years and there appears to be no end in sight.

HOS is part of the basic materials sector. They're in the oil equipment and services industry. According to the company, "Hornbeck Offshore Services, Inc. is a leading provider of technologically advanced, new generation offshore service vessels primarily in the Gulf of Mexico and Latin America. Hornbeck Offshore currently owns a fleet of 66 vessels primarily serving the energy industry and has eight additional ultra high-spec Upstream vessels under construction for delivery through 2016."

The energy sector has been hurt by the bear market in crude oil. The sell-off in crude started in June 2014. Yet the sell-off in HOS started in late 2013, more than six months before crude oil turned lower. Falling oil prices make it unprofitable for companies to do a lot of drilling offshore, which is significantly more expensive than normal drilling methods. Today there are only 31 active offshore oil rigs. That's down from 66 offshore rigs a year ago.

HOS management seems to be doing a good job in slashing expenses. They have managed to beat Wall Street's estimates on the bottom line number. Yet HOS has been unable to stop the plunge in revenues. Last quarter revenues fell -20% from a year ago.

Moody's just downgraded HOS' credit rating and changed their outlook to negative. Here is an excerpt from the Moody's press release,

"Hornbeck benefits from the scale and quality of its fleet, and good liquidity, but its credit metrics will continue to be negatively impacted by the very challenging environment facing the offshore sector through 2017" said Sreedhar Kona, Moody's Senior Analyst. "The negative outlook reflects our expectation of continued deterioration in the utilization of offshore supply vessels and their day rates"
The bearish conditions in the energy sector are not secret. Investors have been selling the rallies. Bears have piled on HOS with short interest at 33% of the small 25.5 million share float. That does raise the risk of a short squeeze.

Technically the trend is down. It was just a few days ago that Goldman Sachs outlined their worst-case scenario that saw crude oil falling to $20 a barrel. It could take years for the world to work through the current supply glut that will keep oil prices depressed.

HOS' point & figure chart is forecasting at $12.00 target. Today HOS displayed relative weakness with a -4.3% decline. Tonight we are suggesting a trigger to launch bearish positions at $15.30. More conservative traders might want to wait for a breakdown below $15.00 before launching bearish positions.

*Due to the high short interest I am suggesting small positions to limit risk*

*small positions to limit risk* - Suggested Positions -

Short HOS stock @ $15.22

- (or for more adventurous traders, try this option) -

Long DEC $15 PUT (HOS151218P15) entry $2.15

09/22/15 triggered on gap down at $15.22, suggested entry was $15.30
Option Format: symbol-year-month-day-call-strike

Helmerich & Payne, Inc. - HP - close: 47.44 change: -0.63

Stop Loss: $54.35
Target(s): To Be Determined
Current Gain/Loss: +4.5%
Entry on September 10 at $49.70
Listed on September 9, 2015
Time Frame: Exit prior to earnings in November
(option traders exit prior to October expiration)
Average Daily Volume = 2.1 million
New Positions: see below

09/22/15: HP is another energy stock sinking toward new lows. Shares lost -1.3% at set a new multi-year closing low today.

More conservative traders may want to lower their stop again. No new positions at this time.

Trade Description: September 9, 2015:
The bear market in crude oil has crushed shares of HP, an oil driller. The stock has fallen from its 2014 highs near $118.00 down to $50.00.

HP is in the basic materials sector. According to the company, "Helmerich & Payne, Inc. is primarily a contract drilling company. As of July 30, 2015, the Company's existing fleet includes 342 land rigs in the U.S., 40 international land rigs, and 9 offshore platform rigs. In addition, the Company is scheduled to complete another 12 new H&P-designed and operated FlexRigs, all under long-term contracts with customers. Upon completion of these commitments, the Company's global fleet is expected to have a total of 394 land rigs, including 373 AC drive FlexRigs."

You have to give HP's management team credit for slashing expenses. The company managed to turn out an adjusted profit of $0.27 a share in the third quarter during a very tough period for the industry.

HP reported its Q3 results on July 30th. Wall Street was only expecting $0.14-to-0.17 per share. Revenues still fell -30% from a year ago to $659 million but that was much better than expected.

Unfortunately for HP the oil market has not recovered. After a huge bounce from its August lows the price of oil has begun to slide. Global oil production is still near record highs while consumption has been weak. An economic slowdown in China and much of the world is hurting demand for oil.

If oil prices stay depressed it's going to hurt business for drillers. The sell-off in HP's stock price has boosted the dividend yield to 5.2%. The current dividend is about $2.75 a year. Rival driller Transocean (RIG) recently cut their dividend. Slower business for drillers could lead HP to reduce its dividend too, which should send the stock lower.

Technically shares of HP are in a bear market and hovering near support at $50.00. A breakdown below $50 could spark a drop toward the next support level around $40.00. The point & figure chart is bearish and forecasting at $38.00 target. Tonight we are suggesting a trigger to launch bearish positions at $49.70.

- Suggested Positions -

Short HP Stock @ $49.70

- (or for more adventurous traders, try this option) -

Long OCT $45 PUT (HP151016P45) entry $1.75

09/19/15 new stop @ 54.35
09/10/15 triggered @ $49.70
Option Format: symbol-year-month-day-call-strike

Intl. Paper Company - IP - close: 39.57 change: -0.77

Stop Loss: 42.35
Target(s): To Be Determined
Current Gain/Loss: +0.7%
Entry on September 22 at $39.85
Listed on September 19, 2015
Time Frame: Exit prior to earnings in late October
Average Daily Volume = 2.9 million
New Positions: see below

09/22/15: Tuesday's widespread market decline helped push IP below support at $40.00. Shares actually gapped lower at $40.00 and then dipped to $39.40 at its low for the day. Our trigger to launch bearish positions was hit at $39.85.

If you're looking for a new entry point consider waiting for a drop below $39.40.

Trade Description: September 19, 2015:
Over supply issues and currency headwinds are hurting IP's results.

IP is in the consumer goods business. According to the company, "International Paper (IP) is a global leader in packaging and paper with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include industrial and consumer packaging along with uncoated papers and pulp. Headquartered in Memphis, Tenn., the company employs approximately 58,000 people and is strategically located in more than 24 countries serving customers worldwide. International Paper net sales for 2014 were $24 billion."

The last few earnings reports have seen IP beat Wall Street's bottom line estimate but that was mainly due to cost cutting. Revenues have been slowing down. Their 2014 Q4 revenues were only up +1.6%. Q1 revenues fell -3.6%. Their most recent report saw Q2 revenues fall -3.6%. The last two quarters saw revenues come in below analysts' expectations.

IP's management did manage to slash selling and administrative costs by almost -8% last quarter. Unfortunately their international packaging, consumer packaging, and printing papers businesses all saw sharp sales declines.

Dividend investors might be drawn to this stock. IP currently has a yield near 4%. Is it worth buying a big yield when the stock has fallen -30% from its 2015 highs and shows no signs of stopping? A Bank of America analysts said their previously bullish thesis for IP doesn't work anymore. Over supply issues in the containerboard industry remain a trouble spot.

The stock is bearish with a clear trend of lower highs and lower lows. Today shares are poised to breakdown under round-number support at $40.00. We are suggesting a trigger to launch bearish positions at $39.85.

- Suggested Positions -

Short IP stock @ $39.85

- (or for more adventurous traders, try this option) -

Long 2016 Jan $40 PUT (IP160115P40) entry $3.00

09/22/15 triggered @ $39.85
Option Format: symbol-year-month-day-call-strike

QUALCOMM Inc. - QCOM - close: 53.94 change: -0.45

Stop Loss: 56.65
Target(s): To Be Determined
Current Gain/Loss: +0.9%
Entry on September 04 at $54.45
Listed on September 1, 2015
Time Frame: 4 to 6 weeks
Average Daily Volume = 12.5 million
New Positions: see below

09/22/15: QCOM has finally broken support near $54.00. Unfortunately it was not a very convincing move lower. I would consider new positions now but you may want to wait for a new decline below today's intraday low of $53.58 before initiating positions.

FYI: If you're starting new positions I would not buy the October options. Look at the Novembers or Januarys.

Trade Description: September 1, 2015:
There seem to be a ton of bulls shouting at everyone to buy QCOM even though the stock is in a bear market. QCOM peaked in early 2014 around $81-82 a share. Since then it has been a very bumpy decline lower.

The company is facing rising competition. More importantly some of that competition is coming from its own customers. QCOM has been a very dominant player in the mobile phone chipset market. Yet lately the company has been facing competition from mobile phone manufacturers choosing to use their own chips instead of QCOM's.

Almost half of QCOM's revenues come from two companies: Apple (AAPL) and Samsung. Both of these mobile phone makers have been slowly beefing up their own in-house chip design and production abilities. Earlier this year QCOM lost out when Samsung picked its own chip sets for a handful of new mobile phone models instead of QCOM's.

The rising competition is taking a bite out of sales. QCOM's earnings performance has been mixed over the last year. It tends to beat estimates on the bottom line but revenues have been disappointing. After a couple of quarters of revenue growth in the +7-8% range QCOM just reported Q3 revenues fell -14.3%, which was worse than expected. Another big challenge is management's guidance. QCOM has lowered its guidance the last four quarterly reports in a row!

The company has tried to soften the bad news by announcing a massive $15 billion stock buyback program but that was back in March this year. They promised to spent $10 billion on buybacks between March 2015 and March 2016. The big buyback has not stopped QCOM's stock from falling to new multi-year lows.

Bullish investors have tried to argue that QCOM might split up the company to unlock value. That was a very popular idea when activist investors Jana Partners got involved in QCOM. Jana is one of the reasons QCOM did such a big stock buyback earlier this year.

Right now the market's focus on China's weakness could be killing QCOM's stock. The company does a huge amount of business with China.

Meanwhile technically QCOM looks very weak. The point & figure chart is bearish and forecasting at $48.00 target. The oversold bounce from last week's lows appears to be rolling over. Today's intraday low was $54.69. We are suggesting a trigger to launch bearish positions at $54.45. We'll plan on exiting in the next four to six weeks.

Please note that I do want to offer one potential warning. Apple Inc. (AAPL) has a special event scheduled for September 9th. We do not know what AAPL will announce. If they happen to announce something that uses QCOM equipment then it could be a bullish catalyst for QCOM but that's probably a big "if" at the moment.

- Suggested Positions -

Short QCOM stock @ $54.45

- (or for more adventurous traders, try this option) -

Long OCT $50 PUT (QCOM151016P50) entry $0.96

09/12/15 new stop @ 56.65
09/04/15 triggered @ $54.45
Option Format: symbol-year-month-day-call-strike

iPath S&P500 VIX Futures ETN - VXX - close: 24.35 change: +1.30

Stop Loss: None, no stop at this time.
Target(s): To Be Determined
Current Gain/Loss: -11.6%
2nd position Gain/Loss: +16.1%
Entry on August 25 at $21.82
2nd position: September 2nd at $29.01
Listed on August 24, 2015
Time Frame: Exit prior to October option expiration
Average Daily Volume = 50 million
New Positions: see below

09/22/15: Today's decline in the stock market was strong enough to fuel a +11% jump in the volatility index (VIX). The VXX only rose +5.6% and definitely pared its gains by the closing bell. If the stock market continues to sell off we could see the VXX spike back into the 28-30 region.

No new positions at this time.

Trade Description: August 24, 2015
The U.S. stock market's sell-off in the last three days has been extreme. Most of the major indices have collapsed into correction territory (-10% from their highs). The volatile moves in the market have investors panicking for protection. This drives up demand for put options and this fuels a rally in the CBOE volatility index (the VIX).

You can see on this long-term weekly chart that the VIX spiked up to levels not seen since the 2008 bear market during the financial crisis. Moves like this do not happen very often. The VIX rarely stays this high very long.

(see VIX chart from the August 24th play description)

How do we trade the VIX? One way is the VXX, which is an ETN but trades like a stock.

Here is an explanation from the product website:

The iPath® S&P 500 VIX Short-Term Futures® ETNs (the "ETNs") are designed to provide exposure to the S&P 500 VIX Short-Term FuturesTM Index Total Return (the "Index"). The ETNs are riskier than ordinary unsecured debt securities and have no principal protection. The ETNs are unsecured debt obligations of the issuer, Barclays Bank PLC, and are not, either directly or indirectly, an obligation of or guaranteed by any third party. Any payment to be made on the ETNs, including any payment at maturity or upon redemption, depends on the ability of Barclays Bank PLC to satisfy its obligations as they come due. An investment in the ETNs involves significant risks, including possible loss of principal and may not be suitable for all investors.

The Index is designed to provide access to equity market volatility through CBOE Volatility Index® (the "VIX Index") futures. The Index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects market participants' views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the Index. Owning the ETNs is not the same as owning interests in the index components included in the Index or a security directly linked to the performance of the Index.

I encourage readers to check out a long-term chart of the VXX. This thing has been a consistent loser. One market pundit said the VXX is where money goes to die - if you're buying it. We do not want to buy it. We want to short it. Shorting rallies seems to be a winning strategy on the VXX with a constant trend of lower highs.

Today the VXX spiked up to four-month highs near $28.00 before fading. We are suggesting bearish positions at the opening bell tomorrow. The market volatility is probably not done yet so we are not listing a stop loss yet. Our time frame is two or three weeks (or less).

- Suggested Positions -

Short the VXX @ $21.82

- (or for more adventurous traders, try this option) -

Long OCT $20 PUT (VXX151016P20) entry $2.93

Sept. 2nd - 2nd position (Double Down On The September 1st Spike)

Short the VXX @ $29.01

- (or for more adventurous traders, try this option) -

Long OCT $20 PUT (VXX151016P20) entry $0.78

09/02/15 2nd position begins. VXX gapped down at $29.01
09/01/15 Double down on this trade with the VXX's spike to 6-month highs
08/25/15 trade begins. VXX gaps down at $21.82
Option Format: symbol-year-month-day-call-strike


Restaurant Brands Intl. - QSR - close: 37.64 change: -0.33

Stop Loss: 38.25
Target(s): To Be Determined
Current Gain/Loss: -1.6%
Entry on September 11 at $36.85
Listed on September 10, 2015
Time Frame: Exit 4 to 6 weeks.
Average Daily Volume = 1.0 million
New Positions: see below

09/22/15: The stock market's weakness this morning helped cushion the blow on our early exit with QSR. The plan was to exit this morning QSR gapped down at $37.44.

- Suggested Positions -

Short QSR stock @ $36.85 exit $37.44 (-1.6%)

- (or for more adventurous traders, try this option) -

OCT $35 PUT (QSR151016P35) entry $0.85 exit $0.25 (-70.6%)

09/22/15 planned exit
09/21/15 prepare to exit tomorrow morning
09/19/15 new stop @ 38.25
09/11/15 triggered @ $36.85
Option Format: symbol-year-month-day-call-strike