EOT position update March 5, 2014

March 5, 2014

Market Snapshot

Just last week the S&P 500 and many other market indexes reached new all-time highs.

The rally was being spurred on by a boat load of better than expected economic data. Housing prices, new home sales, durable goods, Chicago PMI, University of Michigan Confidence, and bank lending all surprised investors with better than expected readings.

Needless to say, this is the type of thing that drives stocks higher.

The stock market rally was put on hold in the wake of Russia’s invasion of Ukraine’s Crimea region.  The threat of war tends to do that.

The stock market selloff didn’t last long.  The conflict hasn’t reached a boiling point and both sides say they don’t want war.

As a result, the S&P surged to the upside and reached new highs again yesterday.

The strong performance and resiliency of stocks has shifted investors into a bullish mood over the last few weeks.  The pendulum of fear and greed has once again shifted back toward greed.

Here’s the bottom line…

Financial markets will never be immune from world events.  In fact, they often create buying opportunities.  Unfortunately this one happened so fast (less than 24 hours), it was nearly impossible to trade.

The good news is there are still plenty of opportunities out there.

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.

AMZN April 2014 $365 Mini Calls
AMZN’s rally has begun.  It crossed over $370 today and our option is now up 33%. This stock should continue to surge back toward $400 in the weeks ahead.  Continue holding… Support is at $340 and again at $320.  Resistance is at $380 and $400.

EIGI May 2014 $15 Calls
EIGI’s strong performance continues in the wake of their solid earnings report.  The stock is up nearly 20% and our option has doubled in value.  Aggressive traders should continue to hold for bigger gains ahead.  The next resistance is at $20.00.

Category: EOT Update