EOT Position Update – November 18, 2015

| November 18, 2015

Market Snapshot

Terrorism struck the civilized world again over the weekend.  This time the attackers hit Paris.

The horrific events and loss of life are tragic.  My heart goes out to those that have been impacted by these events.

Needless to say, terrorism is back at the top of the agenda for world leaders.  I hope for swift justice for those that planned and executed these cowardly acts.

As ugly and appalling as these attacks are, we are no longer surprised by them in a way we once would have been.  We already lost our innocence and we understand that there are risks that come with freedom.

The most important thing we can do as members of the civilized world is continue to live our lives as free men and women… albeit with a bit more caution and awareness than we did before.

The financial markets are taking a sober look at these events as well.  There’s sure to be an impact to the economy near these events.  And it could cause some negative impact to tourism and travel.

But these events don’t change the trajectory of the global economy. 

There are things to be concerned about in the global economy.  Things like the strong US Dollar, weak commodity prices, and a slump in US imports ahead of the holiday season.

The big question right now is this… How much of the weakness is behind us and already baked into the cake?

Over the last week, the S&P 500 slumped lower after nearing the all time highs.  The pullback erased most of the gains over the last month.  And it sent the large cap index back below the 200-day moving average.

S&P 500

But the S&P 500 is still a full 13.5% above the August lows.  So, the correction and breakdown below support of the 200-day moving average needs to be taken with a grain of salt.

Don’t forget, the stock market is forward looking.  What happened last quarter or this quarter isn’t as big of a deal as what investors expect to happen six months or a year down the road.

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.

KR January 16th 2016 $37.50 Calls

KR is holding steady in its established trading range.  But a breakout to the upside should be in the cards for the 2nd largest grocery store chain in the country.  Support is at $35.00 and $34.00.  Resistance is at $39.25 and $42.00.

TGT January 16th 2016 $72.50 Puts

TGT reported earnings today.  The troubled retailer met earnings estimates but fell short of revenue.  The bigger problem is they saw customer traffic in their stores slow and online sales growth slowed as well.  Investors quickly sent the stock lower as sellers overwhelmed buyers.  The selloff triggered a breakdown below the neck line of the head-and-shoulder pattern and brought even more sellers to this trade.  The stock is below our $70.00 support level.  Our put option has skyrocketed 270% to a high of $5.62 today!  Congratulations to everyone cashing in this great trade.

Category: EOT Update

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