EOT Position Update – February 15, 2012

| February 15, 2012

February 15, 2012

Market Snapshot

Against All Odds, The Rally Presses On…

It’s truly amazing to witness the defiance of the bulls.  Just as the stock market looks like it’s about to correct… it moves higher.

For example, yesterday the S&P 500 traded as low as 1,326 before staging a late day comeback.  The index moved high enough to close back above the 1,350 level… down just about one point.

In addition, both the Dow and the NASDAQ turned slightly positive after seeing similar trading days.

Here’s what that tells me…

The markets are in full rally mode.  Every dip lower becomes a buying opportunity. Sure, there may have been a couple of down days along the way.  But the bottom line is this… investors simply can’t get enough US stocks right now.

It’s even more interesting how the markets are shrugging off uncertainty across the pond.

Just this past weekend, we witnessed the Greek Parliament pass the austerity-filled budget.  By agreeing to such steep cuts in spending, Greece has given the signal that they are serious about staying in the EuroZone.

However, this is just one step on their quest to avoid exile…

A number of acrobatic feats must transpire to keep Greece from defaulting.  The next hurdle is for private creditors to accept a 70% loss on the Greek sovereign debt they’re holding.  In addition, the EuroZone finance ministers have to clear the way to supply Greece with the pre-promised bailout funds next month. These two events are in process as we speak.  It’s quite complex.

Even with all the challenges left in Greece… the markets continue marching higher.

Now, keep an eye on the 1,370 level for the S&P 500.  Once breached, we’ll be at a new 52-week high for the index… and we’re sure to see a surge even higher.

On to 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.

  GRPN April 2012 $21 Puts
Groupon shares have continued falling since their lackluster earnings report.  And our puts have given us a 38% gain in just days.  Remember, we want this stock to move lower.  Support levels will be at $18 and $15.  Resistance levels will be at $23 and again at $26.

  BHI April 2012 $47 Puts
BHI recently traded just above $52, but couldn’t hold the gains.  Shares have since returned to trade around $48.  The failed test of resistance is a bearish signal for BHI. Aggressive traders should continue holding.  Resistance is at $52.50 and $55.  Support remains at $45.

Category: EOT Update

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