Option Investor

Daily Newsletter, Wednesday, 9/14/2016

Table of Contents

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

Market Wrap

Fighting To Hold Support

by Keene Little

Click here to email Keene Little
This week we've seen the indexes pounding on support (the techs have been stronger in that regard) and it's getting to the point where the bulls need to step back in and rally this market. Otherwise the bears are smelling blood and ready to take no prisoners.

Today's Market Stats

We've had some whippy moves since last Friday's decline but today was relatively tame with the Dow swinging less than 200 points, the first day since last Friday. One could argue the dampening volatility since Friday is a good sign for the bulls as support levels hold. Others will argue that support levels are being pounded into submission and will soon break, opening the flood gates to more selling as stop levels get hit. We're in opex week and so far SPX has been holding near 2125, which could hold into Friday morning's settlement for opex and what it does after that will be telling. That's if it holds for one more day.

The market is concerned about what the Fed will say next week in their FOMC announcement on Wednesday. The stock market is worried about the removal of accommodation, which is the only thing a 0.25% rate increase would accomplish. With the Fed's new self-imposed mandate of protecting the stock market they've been threatening to raise rates, which I think has been a test of the market's reaction. The hard selloff and inability to recover (unlike the spike down in June on the Brexit worries) will likely convince the Fed the market won't tolerate a rate increase. Neither will the economy but that seems to be beside the point for the Fed.

Other than the Fed we haven't had much news, economic or geopolitical, to affect the market. Some say the loss of the lead by Clinton over Trump is upsetting the market (since Trump is such a wild card and supposedly not part of the political-financial establishment) but I think people are grasping for straws in an attempt to explain the selling. The market has been overbought and overloved and people came back from their summer vacations and decided to take profits off the table. Selling begets selling and pretty soon you have a real decline. But that explanation doesn't sound sexy enough to financial media makes up reasons for it. Some big players though seem to be worried about this market.

I saw an interesting chart from Tom McClellan that showed the open interest for VIX futures vs. SPX and how spikes in open interest often correlate with SPX price highs. All this year the open interest has been climbing and is now historically high and it spiked much higher in the past month. As McClellan stated, "These big spikes in open interest are usually followed by meaningful price declines. The Sep and Oct futures contracts each have just seen huge increases in open interest." It's looking like there are some big players out there betting on a big market decline, which of course spikes the VIX higher and those long the VIX can make a lot of money.

VIX Futures Open Interest vs. SPX, chart courtesy mcoscillator.com

Dow Industrials, INDU, Weekly chart

This week the Dow is testing support at its uptrend line from February-June, currently near 18045(using log price scale, whereas it's near today's low at 17992 when using the arithmetic price scale). The line was tested Monday before the big rally back up and then again on Tuesday. Depending on the price scale the uptrend line is either holding or was slightly broken today and the new low (1 point below Monday's) suggests we could see lower prices directly ahead, which is what I'm depicting with the bold red arrow vs. the light-green dashed line heading back up. One of the things favoring the bulls is the lack of bearish divergence at the July-August highs vs. the April high, which is not required before a significant decline but the lack of a negative divergence is reason for caution if you're a bear. However, price is king and a break of the uptrend line would be a bearish development, which would likely lead to a drop down to the 50-week MA (it supported the decline into the June low), currently at 17556, and potentially down to price-level S/R at 17140.

Dow Industrials, INDU, Daily chart

The Dow's daily chart shows the struggle to hold onto its uptrend line from February, which was broken today when looking at this with the log price scale. The price pattern for the decline from last week, with the sharp declines on greater volume and bearish market internals, supports the idea for lower prices. If we get another leg down it should be a strong decline, one that could take the Dow down to its 200-dma, currently near 17571 (slightly above the 50-week MA) very quickly. The risk in this whippy market, especially this week, is for a head-fake break (to hit the stops) to then be followed by a strong reversal and into a new rally (or another leg up to create a larger a-b-c bounce pattern off Monday's low).

Key Levels for DOW:
- bullish above 18,351
- bearish below 17,994

S&P 500, SPX, Daily chart

SPX has been bouncing between support at 2120 (the June 8th high) and resistance at 2135 (the May 2015 high and the July 2015 high was near 2133) and hanging close to 2125, which is where it might settle Friday morning for opex (it's common to see a 25-point multiple act as a magnet). Yesterday it closed near 2127 and today is closed near 2125. It just needs one more day to close near this level and not move much into Friday morning. If it drops below support at 2120 we could see it test its uptrend line from February-June, currently near 2100 (log price scale, 2108 with arithmetic price scale). A break of its uptrend line, which would follow the Dow breaking first, would be bearish confirmation that a significant high is already in place. A drop below 2100 would likely lead to a drop to the 200-dma, currently at 2058. But until 2100 is broken there is still the potential for the bullish price pattern, which calls for one more leg up in a rising wedge pattern for the rally off the February low. The bearish pattern calls the August high the completion of a 3-wave bounce correction off the February low and now we'll see a breakdown that will take SPX below the February low at 1810. Neither side can get aggressive yet since we don't have enough clues yet for either side.

Key Levels for SPX:
- bullish above 2170
- bearish below 2120

S&P 500, SPX, 60-min chart

The sharp decline into Monday's low was followed by a sharp bounce and then another sharp decline, leaving traders guessing which direction will be next. The bounce pattern off Tuesday's low looks like a corrective pattern and that swings the odds over to the bears and another leg down would likely break support near 2120 (tested for the 3rd time in 3 days today) and head for 2100. With the increased volatility and spiky price moves it's hard for traders to pick a direction without getting stopped out but at the moment I think it's better to pick the short side for trading. With cycles pointing down into mid-October it's another reason to stay defensive if you're a bull.

Nasdaq-100, NDX, Daily chart

The techs have held up relatively well this week by holding onto most of Monday's big rally. But NDX has been struggling to stay above price-level S/R at its December 2015 high near 4740, which it managed to do today with a late-day bounce up to 4746. Last Friday it closed below its 50-dma, near 4701 on that day, but it's been holding above it since then, currently near 4721. The 20-dma is slightly above today's high at 4770, currently near 4784, so there could be struggle between roughly 4720 and 4780. I'm not seeing anything on its chart that suggests which way this is going to break but it remains just as vulnerable as the others to another leg down in a strong decline. If on the other hand it does make it back up we could see it reach the trend line along the highs from July-November 2015, which will be near 4870 by the end of the month. And a rally in techs would likely drag the others up with them, although not necessarily to new highs.

Key Levels for NDX:
- bullish above 4870
- bearish below 4656

Russell-2000, RUT, Daily chart

Like the other indexes, the RUT has been struggling between two price-level S/R lines, one near 1215 (price-level S/R since March 2014) and the other at 1205 (the December 2015 high). Its broken 50-dma, now near 1222, was almost tested with today's high near 1220. The RUT was the only one to make a new low Tuesday morning below Monday's and that set a bearish tone to the pattern and the bounce since then looks corrective. If the bounce gets another leg up to give us a larger a-b-c bounce with two equal legs up we could see 1224, which would also be a 62% retracement of Tuesday's decline. But whether it will be from that level, if reached, or from here, it's looking like the decline will continue. Assuming we'll see support at 1205 break, the next downside target would be 1187 where the decline from September 7th would achieve two equal legs down. That could then lead to the start of another rally leg but I think the higher-odds pattern points to a strong decline to the next price-level S/R near 1160 before consolidating. A drop down to its 200-dma, near 1130, before the end of the month is a reasonable possibility if the bearish wave pattern is correct.

Key Levels for RUT:
- bullish above 1236
- bearish below 1205

30-year Yield, TYX, Daily chart

Last week I had shown a chart of TYX (30-year yield) to point out a pattern that called for a rally (selling in bonds) to create an a-b-c bounce pattern off the July 8th low. Two equal legs up for that pattern called for a rally to 2.463%, which was achieved yesterday (with a high at 2.488%), and is only slightly below its December 2008 and May-July 2012 lows near 2.5%. It gapped back down this morning and then tested the 2.463 projection with a high at 2.469 before dropping back down. This pattern calls for the start of the next leg down in yields, one which should take TYX below 2% (and TNX below 1%). If this pattern is the correct interpretation it's saying the Fed will not be raising rates next week. But if TYX makes it above 2.5% we could then see it rally up to its 200-dma, currently at 2.58%. The 200-dma hasn't been tested since TYX dropped below it in January.

20+ Year Treasury ETF, TLT, Daily chart

As far as a trading opportunity in bonds, you can use TLT, the 20+year Treasury Bond ETF. It's of course a mirror image of yields and the setup here is for a rally after completing an a-b-c pullback from July with two equal legs down at 133.78 (yesterday's low was 133.36 and it closed at 134.05). It gapped back up this morning and I'd consider a long play here with a stop just below 133.36.

KBW Bank index, BKX, Daily chart

Back in August BKX broke above its downtrend line from July-December 2015 and then broke its uptrend line from June (more like dribbled through it). After a brief consolidation it then pushed higher and back-tested its broken uptrend line on August 30 - September 1 before falling away, leaving a bearish kiss goodbye. The decline since September 1st is corrective enough to suggest caution by the bears since we could get another leg up and potentially up to 75.41 to achieve two equal legs up from February. At the moment it's looking like we could see a drop at least back down to its broken downtrend line where its 50-dma is getting ready to cross it near 69. Below 69 would be more bearish but until that happens we need to watch for the possibility of another rally. Follow the money by watching the banks carefully.

U.S. Dollar contract, DX, Daily chart

The US$ is holding its uptrend line from May 3rd and my expectation for the dollar is higher, back up to the top of its parallel down-channel near 100. The way it's been chopping its way higher since May it could take a while. At the moment, even for the bullish pattern, I can't rule out a decline back down to the bottom of its parallel channel and a price projection at 92.68 for two equal legs down from July 25th. Not until it breaks below that level would I turn bearish the dollar. We should get a clearer picture after the FOMC announcement next week.

Gold continuous contract, GC, Daily chart

Since its high on July 6th gold has traded sideways in what looks like a descending triangle. It now has the requisite 5-wave move inside the triangle and the bullish interpretation of this pattern is for another rally leg out of it to complete the 5th wave of the rally from December. If we get another rally leg it could make it up to only the downtrend line from September 2011 - October 2012, near 1403 by the end of the month. But if it climbs up to the top of a rising wedge pattern (the trend line along the highs from February-July) we could see gold hit 1470 sometime later in October. However, if gold drops below 1305 it could start a more significant decline, especially since a bullish consolidation pattern will have failed. I don't see anything here to signal one outcome over the other, except the COT report shown further below.

Gold futures Commitment of Traders (COT) report, chart courtesy tradingster.com

I mentioned above that the price pattern is a 50/50 setup but based on the triangle consolidation pattern since July I'd bet on the long side. I and a few other non-commercial traders. And we'd be betting against the commercials, who are considered the "smart" money. The chart below is squished from its original but the gold price is at the top and the commercial (black) vs. non-commercial (retail, fund managers and the like, shown in blue) is shown at the bottom. The dates run from July 2013 to the present and if you draw vertical lines when the commercials increase their net short positions the non-commercials increase their net long positions and the commercials almost always win this bet. The current spread is wider than it's been since before 2007 and this is telling us the commercials are massively short vs. the non-commercials being massively long. I would not bet against the commercials here, which means flat or short the shiny metal.

Oil continuous contract, CL, Daily chart

Oil has twice been rejected by its downtrend line from June 2014 - June 2016, in August and again on September 8th. Oil would turn bullish above its September 8th high at 47.75 but in the meantime a double rejection should lead to a continuation lower. If oil gets just a 3-wave pullback from August it will achieve two equal legs down at 36.27 so that's the first downside target. Over the longer term I think oil will continue to sink lower and at least test its February low and quite possibly break it. The fundamentals for oil are not good and the chart patter supports a complete retracement of the 3-wave rally off the January low at 26.19.

Economic reports

While today was a quiet day for economic reports, Thursday will be busy, as can be seen in the table below. Most of the numbers look like expected small improvements but if they're too strong then there will be additional worries about the Fed raising rates. The Fed is doing a good job scaring the market by talking about raising rates and while I know they desperately want to raise rates (so they have the ability to lower them again when we hit a recession) they have successfully painted themselves into a corner. It took a lot longer than I thought it would but they've finally succeeded. If they raise rates now they'll kill the stock market (one of their self-mandated jobs is to rally the stock market) and put the economy into a recession, which will then require they immediately lower the rates again. I think they'll be playing with negative rates before they raise them again because they're effectively trapped now. Good job Fed, you've screwed the savers, rewarded the bankers and now can't figure out a way out of your dilemma. But I digress...we'll see what reaction we get in the futures from all the economic reports and then back to our regularly scheduled market.


The stock market is starting to reflect fear and it's hard to tell if the decline will continue from here or if instead it will start another rally that takes the indexes to new highs into the election (conspiracy theory anyone?). From a pattern perspective I could argue either case and it's reason enough for caution by both sides. But the downside pattern is particularly bearish and there are some market cycles (long-term and short-term) that argue for a decline into mid-October. The downside potential by mid-October is well below the June lows and that makes bets on the long side particularly risky since we could see several gap-down mornings along the way. As always, the FOMC is the wild card and how the market reacts to the FOMC statement next Wednesday. The market is trying to hold support near here but if it's unable and it drops much lower we could see a fast disconnect to the downside. On the other hand, if support does hold we could see a stronger bounce into next week. How it sets up before next Wednesday and the reaction after the Fed announcement will be key for what happens into October. Trade safe.

Good luck and I'll be back with you next Wednesday.

Keene H. Little, CMT

In the end everything works out and if it doesn't work out, it is not the end. Old Indian Saying

New Plays

Struggling Stocks

by Jim Brown

Click here to email Jim Brown
Editor's Note

Before the market went into decline mode, these two stocks were struggling. It is really difficult to find any bullish plays in the small cap arena. I looked at nearly 500 charts and there were less than 10 that had positive charts and they were the result of recent headlines or upcoming earnings. I did manage to find several bearish candidates.


No New Bullish Plays


WFM - Whole Foods Market - Company Profile

Whole Foods Market, Inc. operates natural and organic foods supermarkets. Its stores offers produce, packaged goods, bulk, frozen, dairy, meat, bakery, prepared foods, coffee, tea, beer, wine, cheese, nutritional supplements, vitamins, body care, pet foods, grocery, and household goods. As of January 28, 2016, the company had approximately 434 stores in the United States, Canada, and the United Kingdom. Company description from FinViz.com.

Whole Foods Market has been known to consumers as the Whole Paycheck Market because of their high prices. That has changed somewhat in recent months because the competition is rapidly accelerating. Sprouts Farmers Market, Walmart and all the various Kroger branded chains are slashing prices on organic products and adding them to their shelves by the hundreds.

Last week Sprouts (SFM) warned that Q3 same store sales would be flat compared to prior guidance of +3.5% to +4.5% that they gave just two months ago. That is a significant decline in expectations. They cited increased price competition and a highly promotional environment that was cutting into profits as well. Their own chart for same store sales tells the tale.

I am choosing to play WFM instead of SFM because the latter dropped significantly on the guidance warning while did drop and is continuing to drop. Since Whole Foods is the most expensive store in the group they have the most market share to lose.

Earnings are Oct 26th and investors should be afraid to hold into that event.

With a WFM trade at $27.75

Short WFM shares, initial stop loss $28.75

Optional: Buy Nov $25 put, currently .60, no stop loss.

SWHC - Smith & Wesson - Company Profile

Smith & Wesson Holding Corporation manufactures and sells firearm products and accessories. The company operates in two segments, Firearms and Accessories. It offers handguns, including revolvers and pistols; long guns, such as sporting, bolt action, and single shot rifles; hunting rifles; black powder firearms; handcuffs and restraints; and firearm-related products and accessories. The company also provides accessories, such as reloading, gunsmithing tools, gun cleaning supplies, tree saws, shooting and field rests, gun vises, hearing protection, ammo tumblers, and vault accessories. It sells its products under the Smith & Wesson, M&P, Thompson/Center Arms, Caldwell Shooting Supplies, Wheeler Engineering, Tipton Gun Cleaning Supplies, Frankford Arsenal Reloading Tools, Lockdown Vault Accessories, Hooyman Premium Tree Saws, BOG-POD, and Golden Rod Moisture Control brands. In addition, the company engages in selling parts of other brands; operates a private law enforcement training facility; provides metal processing and finishing services comprising tooling, forging, heat treating, finishing, plating, and plastic injection molding, as well as engineering support services to third-party customers; and licensing of trademarks to third parties. Company description from FinViz.com.

Smith & Wesson has been posting some outstanding earnings thanks to rapidly rising gun sales only those sales are slowing now that Trump has pulled even or slightly ahead of Clinton. Trump is pro gun and Clinton is anti gun. As long as his numbers are improving, gun sales are likely to slow. However, should Clinton surge into the lead again, the numbers will rocket higher. Consumers are not going to spend hundreds of dollars to buy another gun if they think their gun rights will be safe for another 4 years. If Clinton surges into the lead again, they will be out in force buying those "extra" guns. The biggest surge will occur if Clinton wins the election on Nov 8th. At that point we want to be long every gun manufacturer and ammunition maker.

Shares have sold off despute great earnings and raised guidance because FBI background checks slowed in August to only a 6% rise compared to 37% growth in July and 39% in June. The actual number of checks fell from 2.19 million in July to 1.85 million in August.

Earnings Dec 1st.

With a SWHC trade at $26.45

Short SWHC shares, initial stop loss $27.45

No options recommended because of price.

In Play Updates and Reviews

Barely Holding Support

by Jim Brown

Click here to email Jim Brown

Editors Note:

The Dow, S&P and small cap indexes are barely holding on to critical support. The Dow dipped under 18,000 and barely recovered that level at the close. The S&P-600 Small Cap Index lost another 2.5 points to close right on critical support at 732. The Nasdaq managed to remain positive thanks to Apple's $4 gain and the gains in their chip suppliers.

The weakness in both the big caps and small caps is worrisome. They appear to be setting up for a potential support break ahead of the Fed meeting next week. I would continue to advise caution about entering new positions.

Current Portfolio

Stop Loss Updates

Check the graphic below for any new stop losses in bright yellow. We need to always be prepared for an unexpected decline.

Profit Targets

Check the graphic below for any profit stops in green. We need to always be prepared for a profit exit at resistance.

Current Position Changes

ACAT - Arctic Cat
The short stock position was stopped with a trade at $14.75.

If you are looking for a different type of trading strategy, try these newsletters:

Short term Calls and Puts on equities = Option Investor Newsletter

Credit spreads and naked puts = OptionWriter

Long term option investments = LEAPS Investor

3-6 month Option Trades = Ultimate Investor

Iron Condors = Couch Potato Trader

BULLISH Play Updates

PTLA - Portola Pharmaceuticals - Company Profile


No specific news. Excellent 4% gain in a mixed market to trigger the entry to the position.

The company will be presenting at carious sessions at the Annual Neurocritical Care Society Meeting from Sept 15-18th.

Original Trade Description: September 12th.

Portola Pharmaceuticals, Inc., a biopharmaceutical company, develops and commercializes therapeutics for patients in the areas of thrombosis, other hematologic disorders, and inflammation. The company is developing Betrixaban, an oral, once-daily Factor Xa inhibitor, which is in Phase III clinical trial for treating venous thromboembolism prophylaxis in acute medically ill patients in-hospital and post discharge; and Andexanet alfa, a recombinant protein that is designed to reverse the anticoagulant activity in patients treated with a Factor Xa inhibitor. The company is also developing Cerdulatinib, which is in Phase I/IIa proof-of-concept study, an orally available kinase inhibitor that inhibits spleen tyrosine kinase (Syk) and janus kinases enzymes, which regulate signaling pathways, as well as for hematologic, or blood, cancers, and inflammatory disorders. In addition, it is involved in the development of PRT2607, a selective Syk inhibitor. Portola has collaboration agreements with nearly a dozen major pharma companies including Bristoll Myers, Pfizer and Bayer to name a few. Company description from FinViz.com.

The billion dollar drug is Andexxa (Andexanet Alpha). In February, Portola licensed the rights in Japan to Bristol-Myers and Pfizer for $15 million in upfront payments, $90 million in milestone payments and double-digit royalties. This is just for Japan. Portola is planning on submitting the MAA for approval in Q3.

In the U.S., Portola suffered a setback in August when the FDA rejected its BLA submission for Andexxa. The FDA asked for some manufacturing information and a change to the labeling. Portola plans to meet with the FDA in the coming weeks to resolve any outstanding questions. Once the drug is approved we could see the shares spike significantly. There is almost zero risk of non-approval based on the remaining questions posed by the FDA. Shares fell from $28 to $18 on the news in late August and the rebound is starting to accelerate.

Shares only lost $1 in the Friday crash and recovered 50% of that on Monday. Support is $21 and shares closed at $22.

Earnings Nov 9th.

Because the futures are down so sharply tonight I am going to put an entry trigger on the position. I hate to say buy something and then have the market gap down -100 points at the open on its way to a repeat of Friday.

Position 9/14/16 with a PTLA trade at $22.25

Long PTLA shares @ $22.25, see portfolio graphic for stop loss.

(Wide stop loss because of the market volatility. I will raise it when it makes sense.)

BEARISH Play Updates

ACAT - Arctic Cat - Company Profile


ACAT was upgraded from sell to hold buy Wunderlich. That was enough to spike the stock from a 4-month closing low on Tuesday to stop us out at $14.75 today.

Original Trade Description: August 20th.

Arctic Cat Inc. designs, engineers, manufactures, and markets snowmobiles and all-terrain vehicles (ATVs), and recreational off-highway vehicles under the Arctic Cat and MotorFist brand names. The company also provides related parts, garments, and accessories. It offers accessories consisting of bumpers, cabs, luggage racks, lights, snow plows, backrests, windshields, wheels, track systems, and winch kits; shocks, attachments, and float avalanche airbags; and maintenance supplies, such as oil and fuel additives. In addition, the company provides snowmobile garments for adults and children under the Arcticwear brand, which include jackets, coats, pants, and casual sportswear. Its Arcticwear line of clothing also includes insulated outerwear, hats, mittens, helmets, boots, sweatshirts, T-shirts, and casual wear.

For Q2 the company reported a loss of 81 cents that was twice what analysts expected at 40 cents. Revenue of $104.9 million also missed estimates for $118.7 million. The company lowered guidance for the full year to a loss of 70 cents to $1 per share on revenue of $635-$655 million. Shares crashed from $18.25 to $14.33 on the news.

Earnings Oct 28th.

Since the July 29th earnings, analysts have been slashing estimates. Six analysts have cut full year estimates from a consensus loss of 19 cents to a loss of 92 cents. For the current quarter, five analysts have cut estimates from 41 cents to 62 cents.

Shares tried to rebound twice and failed. If the post earnings low fails we could see ACAT move into single digits.

I am recommending we short the stock if it makes a new August low. The current low is $14.33. It could take several days before this position it triggered.

Position 8/31/16 with a ACAT trade at $14.15

Closed 9/14/16: Short ACAT shares @ $14.15, exit $14.75, -.60 loss

VXX - Volatility Index Futures - ETF Description


Major increase in volatility only a couple days after we entered the position. There will be ups and downs. Just hang in there and the long-term trend will always be down.

If you are not already in this position the spike today would be an excellent place to enter a new short.

Since this is a long-term play, I am not going to comment on it every day. Just forget it is in your portfolio and hope for a strong market rally in Q4.

Original Trade Description: September 6th.

The VXX is a short term volatility product based on the VIX futures. As a futures product it has the rollover curse. Every time they roll to a new futures contract they have to pay a premium and that lowers the price of the ETF. It is a flawed product with a perpetual decline built in from the monthly roll over in the futures contracts.

As evidence of this flaw, they have now down four 1:4 reverse stock splits. The last four reverse splits occurred at $13.11 (11/2010), $8.77 (10/2012), $12.84 (11/2013), $9.52 (8/8/16). The prospectus says it can reverse split anytime it trades under $25 for a prolonged period and the splits will always be 1:4.

After the August split the ETF moved sideways for four weeks at $36. I think everyone was waiting for the typical August volatility. When it did not show up and the market rallied on Friday that support broke. And the decline has begun.

Because there may be some September volatility, anyone in this position must understand that it may move higher before it moves lower BUT it will always move lower. We just have to wait it out. Volatility never lasts forever.

Unfortunately, put options are expensive with a volatility instrument at this price level. The only recommendation is to short the ETF and forget it. If we do get a prolonged rally as some are expecting we could see strong gains in the next 2-3 months. This will be a long-term position. This is not a 2-3 week play. I can guarantee you, if history holds, we can play this until it splits 1:4 again at $10. Once we are in the position and profitable I will put a trailing stop loss on it. We will take profits and then look for a bounce to get back in. We could keep this play in the portfolio on a trading basis permanently.

Position 9/7/16:

Short VXX shares @ $33.88, no initial stop loss.

No options recommended because of price.

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