Mid-day Update: Snoozefest
Very little activity in the markets today as we have sat in a pretty tight range for much of the morning after the S&P leaped to the 1659 area before settling in around 1656 to churn. The ADP report was solid albeit somewhat light compared to estimates, and the 10-year is hovering just below 3% as murmurs of tapering in September have crept back into the markets.
Not a whole lot of major individual movers out there, though we are seeing interest rate sensitive names taking a hit, including housing related stocks such as $HD, $TOL and $LEN, while our favorite taper play $T is getting whacked today after rallying hard yesterday. Our puts are trading back near the $.30 range. $LNKD rallied extremely hard off of the opening lows and would have made a very lucrative intraday swing trade, but we can’t catch them all. $AAPL is taking it on the nose some today, while $FB surged on the open and has held its gains most of the day.
One idea that we’ve been toying with of late is getting short $TSLA via puts. We probably wouldn’t initiate this position any time soon because the stock still has an air of invincibility surrounding it, and it has not shown a commitment to any prolonged sell off in the past. Still, the rumored addition of $TSLA to the buy list at Goldman Sachs (a report that has been heavily disputed with some Sachers calling it a miscommunication) has us thinking. Apple’s meteoric rise was met by ludicrous price targets and upgrades upon upgrades. The firm’s valuation is beyond absurd, but we wouldn’t seriously consider it until we had another round of earnings from the firm, at least. We are utterly infatuated with the cars ourselves, and we think the company has done a remarkable job in the early innings of bringing the electric car to the mass market. But at some point, the company has to start delivering real earnings, and there are still major hurdles to the electric car catching on, including the institution of charging stations and a more affordable model with the same appeal of Tesla’s current upscale model. Nothing to act on just yet (because the stock could surge to $200 at the drop of a hat), but it may be time to question whether the company can keep its foot on the gas (puns!).
$FCEL has had decent price action today and has traded in a fairly tight range on heavy volume. The stock met major resistance at the high of the day as September options holders put a lid on today’s rally. We may look to peel off either our stock or option position at some point today, but we would be content with standing pat if need be. Nonetheless, a big winner for us on the day.
We’re currently bidding on $EJ February calls after seeing some unusual buying activity in the $12 strike, and we may play a few earnings names today, including Smith and Wesson $SWHC, likely to the long side.