EOT Position Update – March 11, 2015
Market Snapshot
Over the last week, several events have sent ripples though the stocks market.
The first thing that happened was investors decided to shift their investments. They started reallocating money from bonds and dividend stocks into growth stocks.
As a result, things like treasuries and utilities stocks took a beating. At the same time, consumer and technology stocks raced higher.
This was largely driven by upbeat US economic news. But by the end of the week, economic news was a little too good for investors.
More specifically, the February jobs report soared past expectations. The report showed a gain of 295,000 jobs. That’s about 60,000 more than predicted.
What’s more, the unemployment rate dipped to 5.5% from 5.7% in January.
That’s all it took to convince everyone that the Fed is now likely to hike rates in June.
This rush to judgment has sparked an increase in volatility and led to the sharpest one day selloff for the stock market this year. Needless to say, investors are concerned about the impact rising interest rates will have on stocks.
One thing’s for sure, the selloff has erased all the S&P 500’s gains for the year. The large cap index is now down 0.3% in 2015.
But it’s important to remember the selloff is occurring within the upward trending price channel. So, there’s no indication that the latest selloff will amount to anything more than a buying opportunity.
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.
WEN May 15th 2015 $11 Calls
WEN has pulled back off the highs, but it looks to have found support at around $10.50. We should see it get a nice bounce at this level. The uptrend is still intact… continue holding. Resistance is at $12.00 and $13.00. Support is at $10.20 and $9.50.
DOW March 20th 2015 $48 Puts
DOW finally broke down after being stuck to the 200-day moving average for three weeks. The stock has quickly fallen over the last week. The stock is down 5% from when we sent out the trade alert. And our put option is up a solid 64%. I think it’s time to take our profits on this trade. Sell this option to close the trade and pocket your gains of 64%!
STI April 17th 2015 $41 Calls
As expected, STI made its surge toward our $42.50 resistance last week. It sent our option up to 223%! Congratulations to everyone that cashed in these impressive gains. All but the most aggressive traders should have taken their profits on this option.
Category: EOT Update
