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Cabot Options Trader Position Update 01-10-19

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[00:00:00] Hey Cabot options traders. This is Jacob. In 2019 I plan to introduce more video and audio to my market updates and options education articles. If you’re like me we don’t always have time to sit down and read long articles and instead listen to podcasts and other media while cooking dinner or sitting at kids sporting events.

[00:00:17] So over time, if the response is positive, I will introduce more new media. Be patient with my early attempts at these ventures as I am a trader first and I’m never really being compared to Martin Scorsese. That being said making options picks that make money will always remain the number one priority.

[00:00:33] This morning two of our stocks received upgrades. Twitter was raised to Buy at Bank of America Merrill Lynch and given a thirty nine dollar price target and also named a 2019 best idea by JP Morgan and given a 44 dollar price target. In reaction Twitter is trading higher by one dollar at 33 dollars and 25 cents.

[00:00:54] On semiconductor symbol, ON, was also received positive commentary today from research firm Craig-Hallum who called the risk reward in On too hard to ignore and cited a recent conference in which I noted that they are struggling to keep up with demand despite Chinese weakness. The firm reiterated its Buy rating with the 25 dollar price target. I like the potential in both these stocks. That said much like 99 percent of the stocks the market again falls on hard times Twitter and On will likely fall with it because of that risk and for a couple other reasons yesterday we added the new hedge as I wrote in the Nasdaq trade alert yesterday.

[00:01:34] I’m not bearish on the market instead I added a hedge because I thought the risk reward in the indexes had balanced out after big market run off the late December bottom. Also more importantly my options barometer and my daily morning e-mails have gone from consistently at a 6 or 8 which is bullish to a 5 or less which is not as bullish the last several days. This isn’t wildly bearish by any means but instead may show that hedge funds and institutions are becoming less bullish in the short term. Thanks.

Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.