EOT Position Update – August 15, 2012

August 15, 2012

Market Snapshot

This year’s been quite a roller coaster ride.

Looking back, the S&P 500 closed out December of 2011 right around the 1257 level. We had a nice rally into April which pushed the index above the 1400 level.

Then the wheels fell off the bus.

Between April Second and June Fourth, we lost almost 141 points on the index… that’s a huge 10% loss in just over two months.  To say the situation was looking dire would be an understatement.

The bears were having a spring picnic!

But the party didn’t last… the last eight weeks have seen a slow and steady climb in the market… and that’s given us some nice gains in our older trades.

So where do we stand now?

We’ll it’s looking like a goal line stand.  The Bulls want to drive the market higher… but they’ll need to break through those April highs (1419 on the S&P)… and do it convincingly.

The Bears, on the other hand, want to drive the market lower… and to do that, they need to keep the market from reaching new highs.  In a nutshell, the developments over the next few weeks could give us a great indication of market direction for the end of the year.

Bottom line…

Watch that 1419 level very closely.

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.

  CSCO August 2012 $16 Calls
CSCO has been a long haul for us, but it has finally paid off.  This afternoon they announced earnings, and now the stock is well over $18 per share in after hours trading.  Congratulations on another winner of over 50%!  Our call options expire this Friday, so tomorrow morning is probably not a bad time to cash out on the win! It’s time to take profits and redeploy our capital.

  BKI October 2012 $30 Calls
BKI is our newest trade.  We’ve only had it for two days and it’s already moving nicely. A 10% return in two days.  Not bad, wouldn’t you say?  Better yet, the industry itself has been showing clear signs of improvement and I think BKI has a lot more room to run.  We are going to hold these call options for bigger gains ahead!  Remember, we want this stock to rise in value.  Support is at $27.50 and $26.00.  Resistance is at $34.50 and again at $36.00.

Category: EOT Update