eot-position-update-October-29-2014

October 29, 2014

Market Snapshot

Well, that’s the end of QE.

The Fed’s bond buying program that has helped support the economy over the last six years came to an end this week.  The Fed now has a mindboggling $4 trillion worth of assets on its balance sheet.

One thing’s for sure, QE has been great for stocks.  The S&P 500 is up 129% since the first Fed program began in 2008.

The end of the Fed program has many investors questioning what’s next for stocks. And for good reason, if QE was good for stocks, it stands to reason that the end of QE will be bad for stocks.

Needless to say, the next few weeks will be very important for stocks.  The bulls need to see that stocks can hold at these levels or move higher without the Fed’s training wheels.

While the bears are licking their chops to pounce on any weakness after being shredded by the Fed policies time and time again during the last five years.

It’s too soon to say which side will come out on top… but we’ll see how it plays out in the next few weeks.  Either way, our option strategy gives us the ability to profit from market downtrends just as easily as uptrends.

Let’s move onto the updates…

Position Updates

Just a quick note:  Remember, we won’t update every open position every week.  I try to focus on the positions that have some significant news or price movement.

GLOG February 20th 2015 $20 Calls
GLOG has pulled back a bit from the recent highs.  But we’re still sitting on some decent gains on our call options.  Honestly, I have no idea why the recent oil price volatility is hurting GLOG.  It simply doesn’t have an impact on the company.  This stock and our options should continue moving higher from here.  Resistance is at $24.00 and $28.00.  Support is at $14.00 and $13.00.

CVX December 19th 2014 $120 Calls
CVX continues to move higher after the crazy selloff that ripped through the energy sector earlier this month.  The stock is quickly approaching our option’s $120 strike price.  We could see CVX clear this level when they report earnings after the bell on Friday.  Aggressive traders should continue holding with an eye on the 200-day moving average as a target to exit this trade… that’s currently $122.02.

Category: EOT Update