EOT Position Update – June 3, 2015

| June 3, 2015

Market Snapshot

It’s been another week of the same thing we’ve seen over the past several months.

Simply put, there’s a lack of conviction from buyers and sellers alike.

According to the latest AAII Investor Sentiment Survey, 27% of investors are bullish on stocks over the next six months, 25% are bearish on stocks over the next six months, and 48% of investors are neutral.

The long-term average for the study is 39% bullish, 30% bearish, and 31% neutral.

As you can see, there are a lot more people than normal that don’t have a strong feeling about the market. And for good reason…

We know that low interest rates make stocks more attractive than bonds. This has helped propel stocks higher over the last several years.

So, until interest rates rise off these extreme levels, then there’s no reason for investors to sell stocks because there’s no better place for them to put their money.

But at the same time, the lack of growth and general lack of momentum for the economy doesn’t give investors reason to leverage up or pump money into aggressive strategies that will benefit from faster economic growth.

In other words, stocks are the best place to be right now because current monetary policies are supportive of the stock prices. But there’s not enough good news to spark a bullish breakout from the current trading range.

Just about the only thing that’s sparking big stock moves these days are M&A deals like we recently saw in the semiconductor industry.   But pinpointing the timing of a specific M&A deals is impossible.

It’s time for outside the box thinking to find some profitable trades while stocks continue to drift sideways is a tight trading range.

In fact, I’m working on a few ideas that have massive potential for short term gains. So keep an eye out for a new trade later this week.

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.

GDDY August 21st 2015 $24 Puts

GDDY is trying to make the case that they’re entering into a new marketing era that will be good for the company. But so far there has been few details about this new ‘global brand marketing’ and they’re seeking a partner to help them do it.

Here’s an actual quote from their Chief Marketing Officer…

“We’re searching for a brand marketing partner, an ‘agency-of-record’ to help make the GoDaddy brand globally scalable and locally relevant in ways that tell entrepreneurs and small business owners everywhere exactly ‘how’ we can help them grow their businesses.”

Ummm… ok. So, basically, you’re saying you want to grow globally but have no clue how to do it so you’re asking for help. This is a huge red flag that speaks to the uncertainty of their ability to grow their business.

What’s more, their big announcement last week was a new email marketing platform.

Wow! Talk about innovation… marketing via email. That’s revolutionary! (Yes, that’s sarcasm.)

Continue holding for the hammer to fall on this rudderless ship. Resistance is at $29.00 and $30.00. Support is at $24.00 and $20.00.

Category: EOT Update

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