EOT Position Update – October 14, 2015

| October 14, 2015

Market Snapshot

US stocks have managed to rally over the last week.

The S&P 500, Dow Jones Industrials, and the NASDAQ have all climbed back above the 50-day moving average coming into today.  But they all remain well below the important 200-day moving average.

Additionally, the CBOE Volatility Index or VIX, a widely watched gauge of fear in the market, has come down from recent highs of 35 to 16. This suggests that investors’ perception of risk is going down and could help stocks to maintain these levels.

But I’m not sure it can…

Quarterly earnings season is in full swing.  And we’ve already seen disappointing earnings and weak forward guidance send the stock price of stocks like Yum! Brands $YUM and Wal-Mart $WMT off a cliff.

If this trend continues, the recent rally will come to an end very quickly.

What’s more, the uncertainty created by slowing economic growth around the globe, the timing of the first Fed interest rate hike, and a strong US Dollar is still weighing on investors.

As a result, stocks are range bound.  We simply need more information before we can make any sure bets on the market’s next move. I’ll be keeping a close watch on earnings and economic data for any clue that could indicate stocks will break higher or lower from here.

Let’s take a look at our options and see how they are doing this week…


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.

C November 20th 2015 $50 Puts

Citigroup will report earnings tomorrow before the market opens. As I said in the trade alert, I’m expecting a disappointing report. Keep an eye on this one tomorrow. The support levels are at $49.00 and $47.00. Resistance levels are at $52.75 and $54.00.

AAPL November 20th 2015 $120 Calls

Apple stock has been in a holding pattern as market turmoil and global growth concern weigh on investors. This option doesn’t expire until their next quarterly earnings report on October 27th so continue holding. The support level at $109 is holding. Support is at $109.00 and again at $105.00.  Resistance is at $120.00 and $130.00.

Category: EOT Update

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