EOT Position Update – July 11, 2012

| July 11, 2012

July 11, 2012

Market Snapshot

We have now come to the realization the stock market is so frustrating it can make you pull your hair out!

I think it’s safe to say we’re officially stuck in a trading range.  For the last few months, the market has just gone up, only to come back down.

And that’s exactly what continued to happen over the past week.

We have the news portion that’s driving the market and we have technicals driving the market. 

Let’s look at both…

The markets took another turn down yesterday as corporate earnings and future projections disappoint investors.

We are all too familiar with weak economic reports and the European crisis.  Now add lower projected corporate earnings and we can see why these markets are moving all over the place.

Just as it seemed like the market was turning a corner, all of a sudden back to square one.  We really don’t have much leaning to the bullish side here in regards to news or announcements.

So, what news are we looking for?

We’ll be watching closely at the FOMC minutes for any sort of change in attitude toward the economy.  However, I’m not expecting anything different than where we are now.

Also in the news, we must continue to always be prepared for the unexpected overseas.  And now not just in Europe but China could also begin to play a role moving forward as signs of slowing are beginning to emerge.

What about the technicals?

Technically we are below 1,350 on the S&P with a slight increase in volume.

We did close on the 20-day moving average yesterday, but we broke below the intraday lows.  I’m looking to see if the 50-day moving average can hold or if we bounce after the FOMC minutes.

Bottom line…

It seems as if we could be stuck between 1,350 and 1,325 again for a while.

And as earnings continue through the next week or so, we’ll be keeping an eye on our trades along with new ones that present themselves.

Let’s move onto 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.

  SLB August 2012 $67.50 Calls
Schlumberger is our newest trade.  And as the market continues its endless swings back and forth, SLB is holding up extremely well.  SLB should soon begin to benefit as oil comes off of its multi-year lows.  And there’s no reason this shouldn’t start to happen very quickly.  Our call options are right at breakeven since our recommendation.  But if oil continues its upside behavior, SLB will certainly follow suit. And this will give us an opportunity for large gains.  For now, SLB is a hold.  Remember, we want SLB to move higher.  Resistance is at $70.00 and $72.50, while support is at $62.50 and again at $60.00.

  SCHW July 2012 $12 Calls
Schwab seems to be stuck in a tight trading range.  Again, Schwab moves right alongside the banking sector.  Schwab is up 66% since our recommendation.  However, it’s getting closer to expiration.  And since SCHW has held up so well in this uncertain environment, we can continue to hold it for a little longer.  Don’t forget, if the banking sector jumps, SCHW will reap the rewards.  Remember, we want this stock to rise in value.  Resistance is at $13.20 and $13.60, while support is at $11.70 and again at $11.20.

Category: EOT Update

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