EOT Position Update – February 10, 2016

| February 10, 2016

Market Snapshot

Uncertainty is the name of the game these days.

Falling oil prices, slowing economic growth, the Fed painting themselves into a corner with the promise to raise rate four times this year, and the US presidential election are all adding to investor fears and uncertainty.

The mood on Wall Street is one of fear and valuations are nearing levels that are indicative of panic.  These types of selloffs set investors up for solid returns in the future as investors regain their appetite for risk and higher returns.

But there’s still no indication that we’ve reached a turning point.  In fact, the handful of momentum stocks that were responsible for keeping the S&P 500 from falling off a cliff in 2015 have been some of the biggest disappointments in 2016.

It certainly seems that things are bound to get worse before they get better.

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.

STMP February 19th 2016 $85 Puts

On Monday, STMP fell below our $85.00 support.  The selloff sent this put option up to $4.40.  That’s a gain of 80% from our buy price of Friday.  The stock has stabilized around the 200-day moving average.  But a selloff down to $80.00 or even closing the window of the November gap up back to $75.00 could happen in short order.  Conservative traders should look to book profits ahead of quarterly earnings due tomorrow (Thursday) after the markets close.  Aggressive traders should continue holding for bigger gains.

Category: EOT Update

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