EOT Position Update – August 19, 2015
Market Snapshot
So far the summer of 2015 has been a forgettable one for stocks.
Right now the S&P 500 is up a paltry 3.4% year-to-date. Over the last six months, the large cap index has gyrated up 1%… down 1%… up 2%… down 2%… and going nowhere fast.
What’s more, we’re no longer seeing all sectors moving higher simultaneously. There have been individual pockets of strength and weakness among the sectors.
Healthcare and consumer discretionary have generally been the strongest sectors, while the energy sector has been the weak link thanks to falling oil prices. More than anything, there’s nothing for investors to be excited about.
And the latest economic data did little to change that.
Don’t get me wrong, there are some good things happening in the economy. US consumers are as healthy as they have been in a decade. The jobs market, retail sales, and housing all reflect the slow and steady growth of the US economy.
But those strengths are offset by concerns about a slowdown in worker productivity, slowing Chinese economic growth, a strong US Dollar, falling oil and commodity prices, and the lack of private and public investment in future growth.
Needless to say, finding the right themes and investments is more critical today than it has been at any other time in the current bull market.
Let’s move onto the updates…
Position Updates
Just a quick note: Remember, we won’t update every open position every week. We try to focus on the positions that have some significant news or price movement.
NTAP September 18th 2015 $30 Puts
NTAP reports their quarterly earnings announcement after the market closes today. It’s hard to say if this is due to the weakness in the S&P 500 that is testing support of the 200-day moving average or pessimism about their earnings. Our option is up 40% in a week… conservative traders can lock in these gains ahead of the earnings announcement. More aggressive traders should continue holding for the earnings announcement. Resistance levels will be at $32.50 and again at $35.00. Remember, we want this stock to move lower. Support levels will be at $27.50 and $26.00.
MSFT August 21st 2015 $47 Calls
MSFT’s rally stalled out… but not before conservative traders were able to capture some nice gains. Aggressive traders can close this position if you can recoup some capital or just let the option expire at the end of the week.
LUV August 21st 2015 $36 Calls
LUV surged above our $40 resistance level this week… that’s our cue to sell this option to close the trade. Our option is now up an eye-popping 279%! Congratulations to everyone that knocked the ball out of the park on this trade.
GDDY August 21st 2015 $24 Puts
GDDY’s floor of support at $26.00 has held up. Someone or something doesn’t want this stock to fall below $26.00. Anyone still holding this option can let it expire at the end of the week.
Category: EOT Update
