EOT Position Update – September 1, 2010

September 1, 2010

Market Snapshot

Wall Street is starting September off on the right foot.  Stocks across the board are surging higher today.

Right now pessimism is “in” and expectations are down.  So any good economic data has the potential to fuel a big rally.  And that’s exactly what happened today.

Today’s catalyst was the ISM manufacturing survey.  “Experts” were expecting a slowdown.  But instead, manufacturing activity increased in August.  Clearly the economy isn’t falling off a cliff as some have speculated.

But keep this in mind…

It’s just one good data point in a sea of conflicting information.  This does little to clear up the “unusually uncertain” economic outlook.

At this point, it looks like the markets will remain mired in their trading range.  In fact, I wouldn’t be surprised to see them remain in this range until the mid-term elections in November.

Let’s move onto the updates…

Position Updates

Just a quick note:  Remember, we won’t update every open position every week.  I try to focus on the positions that have some significant news or price movement.

  PEGA March 2011 $25 Calls
PEGA is off to a good start.  A recent report from Forrester Research confirms Pegasystems is on the leading edge of the BPM trend.  According to the report, they “lead the pack” in this hot field.  The bottom line is S&P 500 companies are jumping on the BPM bandwagon.  And PEGA is positioned to reap the rewards.  Continue holding for further gains.  Resistance is at $27.50 and $35.  Support is at $16 and $15.

  APOL November 2010 $37 Puts
APOL is under fire from regulators and investors alike.  Lawsuits against management for false and misleading statements are being filed.  And Senator Durbin from Illinois is proposing for-profit education share default risk on federal student loans.  Clearly Washington has no qualms about taking down businesses relying on government funding (just look at healthcare reform).  Until this debacle is over, APOL runs the risk of plummeting at any time.  Hold tight for now.  Resistance is at $45 and $50.  Support is at $35 and $30.

Category: EOT Update