Weekly Market Assessment
The Dow Jones and the S&P 500 have hit the lowest levels in a month as tapering is right around the corner (September). Obviously, it is still a question if this will even occur. Fund managers have hit the Hamptons for August as volume has seasonally declined and 13F filings have hit the market. The 13F filings are reports filed by institutional investment managers that reveal their holdings from the most recent quarter. Everyone scans through these filings to find out what each fund manager sees as the next great opportunity and gives a glimpse of what sectors to be in. The exodus remains in the 10 Year Treasury Bond as it hits 2 year highs of 2.85%. This has of course filtered down to Main Street as yields continue to put pressure on home buyers and the financial stocks which would usually benefit from a rising yield. As uncertainty is slowly again creeping back into the market, the VIX (volatility index) has jumped ~10% to find resistance at its 50 day moving average. All eyes will be focused on the Federal Reserve meeting which is September 17th-18th, where we will find out if the market is able to stand on its own and accept the fact that the artificial low yields have past us by.
From the Trading Floor to the Option Pit: A quick look at what's on the trading desk
E-Mini S&P 500 futures- The market has sold off and has hit month lows. Volatility has presented itself again and I have been actively trading in the futures market. Currently sitting at its 50 day moving average I have been buying both "CALLS" and "PUTS" based on previous highs and lows and support and resistance levels. Total gain through options this week was 68%
Apple (AAPL)- On Wednesday Carl Icahn announced via Twitter that he had "taken a large new stake in AAPL." I immediately hit the ask on the weekly 485 "CALLS" as the stock jumped 3%. I exited this trade, used the house money and bought weekly $500 "CALLS" while then selling a weekly $460/465 "CALL SPEAD". This not only let me use the house money to buy the "CALLS" but was also able to use the premium from the SPREAD to pay for the "CALL". I ended up holding the weekly call to the following day where I saw $500 price target on APPL as a psychological level and also where shorts would begin to cover. APPL broke the $500 level to trade to $504, then sold off to finish the day below $500. A total option gain of 96%.
Cisco (CSCO)- Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP) based networking and other products related to the communications and information technology industries. Said Wednesday it will cut 4,000 workers, citing difficult economic conditions. The stock sold off huge down ~10% after hours. I bought weekly $24.50 "CALLS". It is trading in no mans land between the 50 and 100 day moving average.
Amazon (AMZN)- Back in AMZN "CALLS" as AMZN has hit the 50% Fibonacci retracement level. Currently it trades at $285.65 and I am in weekly $290 "CALLS". It traded through its 50 day moving average and I am looking for traders to see this as another chance to get AMZN at a 10% discount.
Sandridge Energy (SD)- operates as an independent natural gas and oil company in the United States. Bought more shares as this traded down after its earnings and now have a cost basis of $5.25