EOT Position Update – February 25, 2015

| February 25, 2015

Market Snapshot

Over the last week, investors have bought risky assets like stocks and sold their safe haven investments like Treasuries. We saw some of the strongest buying action in small cap stocks and high yield debt that are clear indications of investors’ optimism.

Fear had been the dominant emotion driving the market during the first month of the year. Investors were worried about Russia, Greece, falling oil prices, and sluggish global economic growth.

Many of the concerns investors had have been put to rest, or at least kicked down the road, far enough for investors to put their concerns on the back burner.

Now greed is the dominant emotion driving the market action. According to the AAII Investor Sentiment Survey, bullish investor sentiment surged 7% last week.

Investors are clearly positioning themselves to profit from the next market rally. In other words, last week was a classic ‘risk on’ week for the markets.

Another interesting thing I’ve noticed is that mid-cap stocks have started to outperform large-cap stocks this year. That’s a good sign for the overall health of the market.

It will also provide us with lots of potential trade opportunities in these mid-cap stocks.

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.

DOW March 20th 2015 $48 Puts

DOW is holding right at the 200-day moving average. This technical resistance level is often a brick wall for stocks. And that has certainly been the case for DOW. Based on the recent price action, the odds still favor DOW suffering through another pullback before it can break through this potent resistance level. Continue holding… Resistance is at $51.00 and $52.00. Support is at $46.00 and $43.00.

STI April 17th 2015 $41 Calls

STI’s uptrend appears to be in good shape. This undervalued bank stock continues to move in the right direction. Aggressive traders can continue holding for more upside. The next resistance is at $42.50. Support is at $37.50 and $35.00.

Category: EOT Update

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