EOT Position Update – September 8, 2010

September 8, 2010

***Editor’s Note***  Keep an eye on your email for a new trade soon.

Market Snapshot

Let’s be honest…

There’s a lack of confidence in the economy and stock market.  A few better than expected reports on jobs, housing, and retail sales aren’t going to change that.

Investors are extremely risk averse.  Just look at the huge rally in Treasuries, bonds, and gold lately.

Last week’s rally looks to be nothing more than a bounce off of a technical support zone.  And now we’re closing in on the upper limits of the S&P 500’s trading range around 1,125.

Unless some earth shattering development shakes things up, we’re likely heading back down to 1,040 on the S&P 500.

And the lack of any significant economic data this week means a shakeup is highly unlikely.

The good news is summer’s coming to an end.  We’ll likely see many of the Wall Street hotshots returning from their summer vacations in the Hamptons.

If these big investors start moving money around, we could see some individual stocks gain momentum.

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’s rally has slowed over the last few days.  However, our option hit a new high on Friday.  And with plenty of time until expiration, this trade has the potential to be huge.  Continue holding for further gains.  Resistance is at $27.50 and $35.  Support is at $16 and $15.

  APOL November 2010 $37 Puts
APOL has defied gravity and continues to push higher.  But it’s not going to last.  Major regulatory changes are going to wreck their business model.  A report released by Advertising Age reports Apollo spent $6.7 million on Google advertising.  This is just the type of practice the DOE is going to crack down on.  And when they do, it’s lights out for APOL.  Continue holding you APOL puts.  Resistance is at $45 and $50.  Support is at $35 and $30.

Category: EOT Update