EOT Position Update – November 11, 2015

| November 11, 2015

Market Snapshot

It’s Veterans Day today.  So, I’ll start off by thanking all of the men and women who have sacrificed so much so we can live in the greatest country in the world.

Your efforts are truly appreciated and sacrifice is never forgotten.

As we turn our attention to the stock market, there’s no denying that the S&P 500 has been on a great run since the beginning of October.

The S&P 500 is up more than 10% from the recent lows.  And it’s reclaimed the 200-day moving average.  Over last week, the large cap index has drifted back toward the 200-day moving average.

S&P 500

The breakout and subsequent pull back to the 200-day moving average is the type of price action we usually see around major resistance and support levels.

The bullish bias is further supported by a batch of better than expected economic data.  Last week non-farm payrolls and hourly earnings crushed expectations.

Here’s the thing, the better than expected economic data set the stage for the Fed to raise interest rates in December.  It’s amazing how quickly the tide can turn when investors and the Fed are hanging on every data point.

So, here’s the next question…

Will the potential of the first Fed rate hike torpedo the bullish momentum in stocks?

The price action over the next week will likely determine whether the bulls or bears take control of the market through the end of the year.  I’ll be watching the 200-day moving average closely.

If the 200-day moving average holds and stocks move higher, it could set the stage for a strong Santa Claus rally into the end of the year.  But if the S&P falls back below the 200-day moving average, there’s a good chance the bears can take control of the market.

Now, 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.

TGT January 16th 2016 $72.50 Puts

TGT’s troubles are hard to ignore.  The company is doing anything and everything to bring in customers.  They just announced they’ll start Black Friday promotions, typically reserved for the Friday after Thanksgiving, five days early.  And they’ll be open on Thanksgiving.  I feel sorry for those employees forced to work on Thanksgiving.  But at the same time, the news sparked a leg down in the stock that sent our put option soaring to $2.84.  Conservative traders can go ahead and sell this option to lock in a quick 87% gain.  Support levels are at $72.00 and again at $70.00.  Resistance levels are at $78.00 and $80.00.

AAPL November 20th 2015 $120 Calls

AAPL hit an unexpected snag when an analyst report showed the tech giant is cutting back orders to suppliers as Asian demand for the iPhone is falling short of expectations.  Aggressive traders still holding this option should look to sell into any strength over the next week before this option expires.

Category: EOT Update

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