EOT Position Update – June 17, 2015

| June 17, 2015

Market Snapshot

Right now the markets are focused on two things…  The Fed and Greece.

After two days of meeting, the Fed released its latest statement.  In short, they didn’t change anything.

They think the economy is improving and that interest rates will be hiked later this year.  But the committee also backed off their estimates for how high they think rates will be next year.

In other words, rates are going to start going up soon.  But the pace the hikes are going to be will be slower than previously thought.

That seems about right to me.  Inflation is running below the 2% target and there’s little indication that prices are in danger of accelerating from here.

I know it’s shocking, but I’m actually in agreement with the Fed assessment for once.

Greece is the other thing that’s front and center in the financial markets.

Another ‘deadline’ for Greece to agree to terms with creditors has been set for tomorrow.  But we’ve seen this before, I’m guessing they’ll kick the can down the road a few more months.  And we’ll be right back here in a few months hearing about a Greek debt default.

One way or another, two of the headwinds that have been weighing on US stocks are being alleviated this week…  The Fed didn’t raise rates at this meeting as some had feared.  And this round of the Greek debt saga is coming to an end.

Hopefully this will release investors’ animal spirits and we’ll see more risk taking that will provide a lift for US 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.

TAN July 17th 2015 $45 Calls

TAN is starting to move higher today.  Solar industry growth and margin expansion are expected this year.  What’s more, M&A activity is expected among suppliers.  But TAN is most influenced by investor sentiment.  And I believe we’re on the verge of another wave of bullish sentiment pushing TAN higher.  Continue holding…  Resistance is at $46.00 and $49.00.  Support is at $38.00 and $34.00.

LULU June 19th 2015 $65 Calls

LULU has continued to move higher post-quarterly earnings.  But the gains have been held in check by the unexpected announcement by the company’s founder, Dennis Wilson, to sell his stake in LULU.  That’s 14% of the company or about $1.2 billion worth of stock.  In the long run, this is a good thing for LULU.  He has been a disruptive presence in the company the last few years.  But in the short term, the pending sale is a headwind.  These options expire on Friday.  Aggressive traders should sell these options to close the trade and pocket a solid gain.

Category: EOT Update

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