Last Friday, Cisco stock was assigned to me as part of an expiring Put Options contract. For now, I plan to hold the position as a short term trade.
The drop in Cisco started last quarter when management lowered guidance based on expectations of a global slowdown. However, if Cisco is so concerned about a pending recession, why did they recently try to acquire Datadog? Cisco is known for their conservative guidance, perhaps they are just sandbagging for a big Santa Claus rally bonus.
The Cisco chart is starting to form a base near its 50 week moving average. Short term my money is on a breakout above that level.
As to the overall markets- even with all the pessimism, the S&P 500 is within ~1% of a record high. An extremely prudent investor might take profits at this level (shoutout to one of my favorite daughters). October is likely to be very volatile with the continuing China Trade Negotiations and the BREXIT deadline. However, I remain optimistic about the general condition of global markets. In fact, if things are soooooo bad, why is the Semiconductor Sector (XSD) within 2% of a record high?
Time will tell. Until then, watch for a special event of the Wealthsteading Podcast as we celebrate episode 300!
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