EOT Position Update – October 7, 2015

| October 7, 2015

Market Snapshot

Some of you know that I grew up on a large family farm in Nebraska.  They have a saying about the weather in Nebraska… if you don’t like it, just wait a few hours and it’s bound to change.

Over the last few weeks, the stock market has been behaving in much the same way as the weather in Nebraska.  It has been up one hour and down the next.  Then up and down again…

The S&P 500 is now in a volatile new trading range with multiple levels of support and resistance above and below the current price.

S&P 500

But the most troubling aspect of the recent price action is the moving averages.  You can see on the chart that the S&P is now below the 50-week moving average.

The only other times the S&P has been below the 50-week MA in the last decade was a few weeks in 2011 and in 2008 right before the stock market plummeted in financial crisis.

And it’s the same story for other moving averages like the 200-day moving average.  These are significant long-term moving averages that many investors look to for clues about investor sentiment.

The longer the large cap index remains below these levels the more it reinforces the belief that the bull market off the 2009 lows has come to an end.

I’m working on a new trade for later this week.  So, keep an eye on your email.

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.

AAPL November 20th 2015 $120 Calls

A combination of weaker than expected iPhone sales in China and the ongoing market turmoil is keeping AAPL from bouncing back.  I guess 13 million iPhone sales in the first weekend isn’t good enough…  So far our support level at $109 is holding.  Continue holding.  Support is at $109.00 and again at $105.00.  Resistance is at $120.00 and $130.00.

MAR October 16th 2015 $72.50 Puts

MAR has shot up after coming within a few pennies of our $65.00 support level aggressive traders were targeting.  As you know, picking the support and resistance levels is as much of an art as it is a science.  This option will expire next Friday.  Aggressive traders still holding this option should look to exit this trade in the next week.

Category: EOT Update

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