EOT Position Update – September 23, 2015
Market Snapshot
We’re back at it again after a short break last week. Let’s take a look at what’s going on…
The big news was the Fed deciding to keep interest rates unchanged. There was wide-spread speculation they were going to hike rates for the first time in a decade… but it didn’t happen.
The Fed cited tightening financial conditions, concerns about the global economy, and low inflation as the main reasons for not hiking interest rates.
We’ve seen the Fed steadily dial back their long term economic growth projections. At this point, they’re projecting economic growth of a paltry 2%.
It appears the Fed will wait until sometime in 2016 for their first rate hike. But if inflation remains low, they’ve said they would allow the unemployment rate to fall lower than they had previously indicated. So, it could be mid-2016 before the Fed decides to hike rates.
Unfortunately, the Fed’s dovish stance is doing little to help the stock market. In fact, the Fed’s policy change has only served to muddy the waters. The increased uncertainty is due to the simple fact that it’s nearly impossible to predict when this Fed will hike interest rates.
Uncertainty is never a good thing. And it will likely keep the S&P 500 from regaining its recent highs any time in the next few months.
A more likely scenario is the S&P 500 muddles along in a range between 1,875 and 2,000 until after Halloween.
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
AAPL is a new trade. We’re buying call options of Apple because it’s in a long term bullish uptrend and they’re launching their iPhone 6s and iPhone 6s Plus. 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 is down 5.8% from $72.01 to $67.82. It has been moving lower after it rallied up to a dual layer of resistance created by the downtrend and the previous broken support level. That’s good news for our put options. They’ve increased in value by 81%! It’s below our $69.00 support zone that indicates conservative traders should be taking profits. Aggressive traders can continue holding for more downside. Support is at $69.00 and again at $65.00. Resistance is at $73.00 and $74.00.
Category: EOT Update
