It’s nice to see the market moving to higher highs.
It’s just too bad there’s no logical – or sane – reason for it.
The bulls just continue to push the markets higher even as technical pivot points tell us we’re greatly overvalued. Typically, the Dow trades right at its 50-day moving average. These days, we’re 400 points above it.
While that means nothing, it’s just a reminder that we’ve overshot sanity. I’d like to see the Dow drop about 400 before moving higher. Here, we’re too high, too fast.
In the meantime, we’re opting to take our remaining second half gains on the AT&T July 33 calls picked up on April 14 at 90 cents, as well as the AT&T January 32 calls picked up at $1.90.
It’s best to take these gains on AT&T now, as the underlying stock challenges the upper range of the channel. It’s finding extreme resistance at a double top just under $34.60. The stock stands to pull back to test support at the 200-day moving average near $33.25, as well. It’s for this reason we hold the AT&T June 34 put.
Take good care,
Ian L. Cooper
Inside Value Trader