EOT Position Update – August 5, 2015

| August 5, 2015

Market Snapshot

These are the dog days of summer… more often than not, this a quiet time of year for the financial markets.  And this year is no exception.

Now that we’ve passed the peak of earnings season, there’s sure to be even more major players packing it in for a few weeks of vacation.  And I suggest you do the same… watching the market is akin to watching paint dry right now.

Frankly, we’re seeing the same fundamental and technical factors driving the markets that we have for months on end…

Investors are focused on falling oil prices, slowing growth in China, strong US Dollar, sluggish corporate investment, and concerns about the timing of the first US interest rate hike in nearly a decade.

And the price action is unchanging as well…

S&P 500

As you can see, the S&P 500 has failed to break out of its trading range four times in as many months.  This trading range is the dominant force for lackluster returns.

However, we have seen some sectors perform better than others.  For instance, the healthcare sector and certain parts of the consumer discretionary sector have been bright spots for large cap stocks.

The energy sector has been the big loser this year… it’s down 13%.  Thankfully we’ve avoided trying to call a bottom in energy stocks and avoided being caught up in the latest downdraft.

It’s hard to say where we go from here.  Our forecast is economic data dependent, much like the Fed’s first interest rate hike.  And right now the economic data is sending mixed signals.

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.

MSFT August 21st 2015 $47 Calls

MSFT is moving in the right direction again today.  Our option is back up $1.60… that’s a gain of 58%.  The release of Windows 10 has been a positive story for MSFT so far.  Aggressive traders should continue holding.

LUV August 21st 2015 $36 Calls

LUV is now up more than 9% since I recommended buying call options on it.  The nice uptick in the stock price has caused our call options to more than double from $1.23 to a high of $2.50 yesterday.  Aggressive traders should continue holding as LUV makes a run at the next resistance at $40.00.

GDDY August 21st 2015 $24 Puts

Today is the make or break moment for our GDDY trade.  The company will report earnings after the markets close today.  The stock has moved up in anticipation of the earnings report.  Keep an eye on the stock to see how it reacts in the coming days.

Category: EOT Update

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