EOT position update September 10, 2014
September 10, 2014
Market Snapshot
The big story this week is Apple (AAPL).
The tech giant unveiled its new iPhone… the iPhone 6. More on that in the position updates…
Beyond Apple, the other piece of news that caught my attention was the shortfall of the nonfarm payroll data last week.
The US economy created 142,000 jobs last month. That came up well short of the 228,000 estimate and it was the weakest month for job creation since December.
The weaker than expected number is probably a good thing at this stage. The Fed is looking at the labor market closely for clues as to when they should begin to raise rates.
The stronger the labor market gets, the more likely they Fed will raise rates. So, the weak jobs number means that the Fed doesn’t need to accelerate their timeline for rate hikes at this point.
In other words, economic data continues to fall into the Goldilocks range… it’s not too hot and not too cold.
But that’s not the case in Europe…
The sluggish European economy and the drop in inflation caused the European Central Bank’s (ECB) to cut rates and put together a timeline for asset-backed security purchases.
The ECB action has sent the value of the Euro down and the US Dollar has soared. That’s been bad news for commodities prices, energy stocks, and anything to do with agriculture.
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.
AAPL October 17th 2014 $105 Calls
AAPL’s launch day was a tremendous success or a huge letdown depending on who you ask. The iPhone 6, iWallet, and iWatch are great products. They get back to what Apple does best… innovate. Obviously only time will tell how successful these products will be. But the markets’ initial reaction has been good. The stock and our options are up. The option hit a peak gain of 64% yesterday during the launch. The iPhone goes on sale on September 19th. If this launch is successful, it should send the value of our options soaring higher. Resistance is at $105.00 and $110.00. Support is at $95.00 and $94.00.
BDBD December 19th 2014 $12.50 Calls
BDBD jumped above our $15 resistance level today. The shares of the organic food maker have been moving higher in the wake of General Mills’ (GIS) buyout of fellow organic food maker Annie’s (BNNY). Our option hit a high of $3.00 today… that’s 69% above our buy price. Congratulations to everyone who locked in these impressive gains! Aggressive traders can continue holding for the next leg higher. The next resistance is at $17.50. Support is at $12.00 and $11.00.
TPLM October 2014 $12.50 Calls
TPLM reported strong 2nd quarter earnings this week. Earnings per share and revenue both beat estimates. Simply put, I’m blown away by the fact that the stock and our option hasn’t exploded to the upside after the latest earnings. One reason it may not be moving higher is management said they don’t intend to sell or seek a buyout at this point. That’s not what some of the short term traders were hoping for… Any way you slice it, this stock is cheap and very undervalued. Continue holding… Resistance is at $14.00 and $17.50. Support is at $10.00.
Category: EOT Update
