EOT Position Update – December 9, 2015
Market Snapshot
It has been a relatively boring week on Wall Street. More investors are moving back into wait-and-see mode.
According to the AAII Investor Sentiment Survey, half of all investors see a flat stock market over the next six months. In short, investors aren’t overly bullish or bearish at the moment.
As a result, the S&P 500 is hugging the 200-day moving average…
The big news this week was OPEC. The oil cartel didn’t agree to reign in production. They’ll continue to flood the market with oil and the ongoing supply glut.
Even the weakness of the US Dollar (that typically supports higher oil prices) last week couldn’t prevent oil from falling to the lowest levels since 2009.
We also saw a disturbing data point on the ISM Manufacturing report. The number came in at 48.6, below the estimate of 50.5, and below 50 indicates the manufacturing sector is contracting.
There’s no doubt about it, industrials, materials, and energy are headwinds for this market.
Now all eyes are turning to the Fed. They’re expected to raise interest rates next week for the first time since the financial crisis.
Now, 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.
FB January 15th 2016 $110 Calls
FB is in consolidation mode. It’s holding around $104. The 50-day moving average is trending higher. Look for the stock to make the next leg higher after it touches the 50-day moving average. Support is at $100.00 and $99.00. Resistance is at $110.00 and $115.00.
KR January 15th 2016 $37.50 Calls
Did Christmas come early? Nope, that’s just KR rocketing higher after they beat quarterly revenue and earnings. As I pointed out, the weakness in Whole Foods (WFM) and Wal-Mart (WMT) was a good sign for KR. And their recent earnings prove that they are grabbing more market share from these competitors. The stock soared up to $41.68 and our call option surged 192%! Congratulations to everyone locking in these impressive gains. All but the most aggressive traders should sell this option to close the trade and take profits.
Category: EOT Update
