Week in Review (February 24 – 28, 2014)

 

Option to Profit Week in Review
February 24 – 28, 2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
5 / 5 4 8 4 / 0 2  / 0 0

    

Weekly Up to Date Performance

February 24 – 28, 2014

New purchases matched the time adjusted S&P 500 this week but fell behind the unadjusted index by 0.3% during a week that set another new closing high just a few short weeks after hitting the bottom of a correction attempt.

The market showed an adjusted gain for the week of 0.9% and unadjusted gain of 1.3% for the week, while new positions gained  1.0%.

For positions positions closed in 2014, performance exceeded that of the S&P 500 by 1.3%. They were up 3.2% out-performing the market by 71.7%.

For a week that didn’t have much in the way of news it was one with some significant back and forth price shifts going on and one that seemed very tied to technical factors.

Sometimes even I become a believer in that sort of thing as it did seem to be more than a coincidence that the market was so responsive to the number 1850.

After those technical issues only in the final hour did current events sneak into the equation as worries about the situation in the Crimea temporarily took the market from a 120 point gain to a 20 point loss before closing higher to end the week. For the week there was really no impact from news nor data.

With the potentially critical news coming from Crimea and the market hovering at that 1850 level I was actually surprised that the selling didn’t continue as the old market axiom is to not go into a weekend of uncertainty holding long positions.

It has been a very, very long time since anyone has actually listened to that axiom. The pattern over the past five years is that nothing gets in the way of the market’s progress.

At least not for very long, so most have been unwilling to let go of their positions for fear of missing out.

The market being able to come back from the quick event driven sell-off can only be seen as another in a series of optimistic signs that point toward continued strength.

Otherwise, the biggest news of the week was the return of select retailers despite generally lackluster numbers that simply didn’t disappoint already lowered expectations.

In the absence of any really meaningful news the market simply kept its eye on the previous closing high on the S&P 500 and tested it a couple of times. The previous script for the past numerous attempts at a correction all read the same and Friday’s attempt at a strong close to end the week was perfectly in line with the past.

Despite coming off those highs the realization that the final hour’s fall was event driven should allow optimism to continue to reign, unless the event in Russia and Ukraine unfolds some more over the course of the weekend.

The week was another busy one with continued ability to rollover positions and find some new cover, as well.

The only regret of the week is having executed a DOH trade on Target, never imagining that it still had another 5% upside left in it after already having gone 5% higher after announcing its earnings.

Not
quite ready to take that loss at least there was an opportunity to try and wait shares out by rolling forward two weeks and perhaps seeing some price give back, thereby allowing a chance to participate in any further price strength in the future.

At least that’s the story that I’m going to go with.

With some assignments, although two fewer with the final hour drop in shares of General Electric and YUM Brands, there is enough replenishment of reserves to provide some security cushion when approaching next week and looking for new opportunities.

Other than the Target rollover, all of the other rollovers for this week were simply to the following week. Part of that was because the low volatility isn’t offering very many good premiums by going out in time.

While I would like to diversify the time expirations of the contracts some more, such as going to March 14, 2014, it’s hard to want to tie up the funds for more than a week when so little is achieved in return.

But as always, once the week begins anything goes.

 

 

 

     

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:  CHK, COH, HFC, SBUX, VZ

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:   AIG, APC, GE, LULU, MSFT, SBUX, YUM

Calls Rolled over, taking profits, into extended weekly cycle:  TGT

Calls Rolled over, taking profits, into the monthly cycle:  none

Calls Rolled Over, taking profits, into a future monthly cycle:  none

Calls Rolled Up, taking net profits into same cyclenone

New STO:  FAST, INTC, LB, TGT

Put contracts sold and still open: none

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:  LOW, MA, MOS, VZ

Calls Expired: CSCO, INTC

Puts Assigned:  none

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions:  LO (2/26 $0.615), WY (2/26 $0.22)

 

 

.

 

 



For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, C, CSCO, CLF, COP, DRI, FCX, INTC,  JCP,  MCP, MOS,  MRO, NEM, PBR, PM, RIG,  WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.



Daily Market Update – February 28, 2014

 

  

 

Daily Market Update – February 28, 2014 (9:00 AM)

The Week in Review will be posted by 6 PM and the Weekend Update will be posted by noon on SUnday.

 

Today’s possible outcomes include:

Assigned: LOW, MA, MOS, VZ

Rolled: GE, TGT, YUM

Expired:  AIG, APC, CSCO, INTC

 

Trades, if any, will be attempted to be made prior to 3:30 PM (EST)

 

 

 

 

Daily Markt Update – February 27, 2014 (Close)

 

  

 

Daily Market Update – February 27, 2014 (Close)

Normally, you would think that on a day that has Durable Goods, Jobless Claims and Janet Yellen offering Congressional testimony it would be a potentially volatile day in the markets.

With some disappointment in those numbers one may also have expected a tenuous market to respond with some negativity, particularly since there’s little indication that the Federal Reserve might turn the “mother’s milk” spigot back on in response to single data points.

The problem is that makes use of rational thought and logic.

Instead, the past few days have seemed to be focused on different numbers and no emphasis on words relating to policy.

Specifically the market has simply cared about the intra-day high on the S&P 500 and the closing high.

Today, in a very calm manner, it did just that.

Anything else happening during the past few days, such as earnings reports or news from Crimea, served only as a means to bring the market closer to, or further away from those levels.

Technicians are jumping up and down telling everyone that will listen that if only you had looked at the charts you would have known that there would be this kind of resistance.at that level.

If the market had skyrocketed higher those same technicians would have been jumping up and down to tell anyone that would listen that if only you had looked at the charts you would have known that the market was set to explode at that level.

They’re right. You can have your cake and eat it, too.

For me, Thursdays just represent that time when you begin thinking about the coming week.

What past opportunities will come to their natural ends as the week comes to an end and which opportunities won’t, as well as which will go on to live yet another week, while earning their keep.

Whatever the answers to those questions may turn out to be, they then predicate thoughts for the coming week.

While still sitting on some cash and hopefully adding to it by tomorrow’s close, it would be nice to see some resolution around that 1850 level.

My expectation is that resolution will be on the higher side of 1850, but in the past comebacks from correction attempts there hasn’t been the slightest hesitancy in moving forward once that inflection point was reached. So far, this time is a little different and the resistance has been there, especially manifesting itself a few times this week with reversals that moved the market from above to below the magical 1850 level.

I’m not a technician and don’t place too much emphasis on that sort of thing, but it’s not likely that kind of behavior is coincidental. There are plenty of believers and their beliefs matter, particularly as a collective gro
up.

While I usually hope to see alternating market moves, especially as they may contribute to volatility, for now, my hope is that the direction is just higher, but in moderation.

Moderate price moves in either direction are always good, especially when looking to make purchases, but lately the markets have been exhibiting lots of “all or none” kind of behavior and sustaining prices longer than in the past when the behavior has been in response to disappointment.

Retail is a good example and seems to be suddenly waking up after more than a quarter in deep slumber, with some very few exceptions. Never mind that the excitement over the numbers is related to significantly reduced expectations and comments like “losses weren’t as bad as expected.”

Imagine the response of retail stock share price if they actually had something good to report. Yet the sentiment has quickly changed, despite there not being tangible evidence that people are in a position to increase their discretionary spending.

Ultimately, whereas these sort of things used to matter, it’s not so clear that they any longer do.

Instead, looking forward a few days at a time and changing sentiment and outlook as often as the market does, seems to be an increasingly rational alternative to believing in the sustained rational behavior of the market and the people that guide its movements.

For a change, today’s sanity, as the 1850 level was breached, was a welcome change from what we’ve gotten used to out of necessity.

 

 

Daily Market Update – February 27, 2014

 

  

 

Daily Market Update – February 27, 2014 (9:30 AM)

Normally, you would think that on a day that has Durable Goods, Jobless Claims and Janet Yellen offering Congressional testimony it would be a potentially volatile day in the markets.

With some disappointment in those numbers one may also have expected a tenuous market to respond with some negativity, particularly since there’s little indication that the Federal Reserve might turn the “mother’s milk” spigot back on in response to single data points.

The problem is that makes use of rational thought and logic.

Instead, the past few days have seemed to be focused on different numbers and no emphasis on words relating to policy.

Specifically the market has simply cared about the intra-day high on the S&P 500 and the closing high.

Anything else happening during the day, such as earnings reports, served only as a means to bring the market closer to, or further away from those levels.

Technicians are jumping up and down telling everyone that will listen that if only you had looked at the charts you would have known that there would be this kind of resistance.at that level.

If the market had skyrocketed higher those same technicians would have been jumping up and down to tell anyone that would listen that if only you had looked at the charts you would have known that the market was set to explode at that level.

They’re right. You can have your cake and eat it, too.

For me, Thursdays just represent that time when you begin thinking about the coming week.

What past opportunities will come to their natural ends as the week comes to an end and which opportunities won’t, as well as which will go on to live yet another week, while earning their keep.

Whatever the answers to those questions may turn out to be, they then predicate thoughts for the coming week.

While still sitting on some cash and hopefully adding to it by tomorrow’s close, it would be nice to see some resolution around that 1850 level.

My expectation is that resolution will be on the higher side of 1850, but in the past comebacks from correction attempts there hasn’t been the slightest hesitancy in moving forward once that inflection point was reached. So far, this time is a little different and the resistance has been there, especially manifesting itself a few times this week with reversals that moved the market from above to below the magical 1850 level.

I’m not a technician and don’t place too much emphasis on that sort of thing, but it’s not likely that kind of behavior is coincidental. There are plenty of believers and their beliefs matter, particularly as a collective group.

While I usually hope to see alternating market moves, especially as the
y may contribute to volatility, for now, my hope is that the direction is just higher, but in moderation.

Moderate price moves in either direction are always good, especially when looking to make purchases, but lately the markets have been exhibiting lots of “all or none” kind of behavior and sustaining prices longer than in the past when the behavior has been in response to disappointment.

Retail is a good example and seems to be suddenly waking up after more than a quarter in deep slumber, with some very few exceptions. Never mind that the excitement over the numbers is related to significantly reduced expectations and comments like “losses weren’t as bad as expected.”

Imagine the response of retail stock share price if they actually had something good to report. Yet the sentiment has quickly changed, despite there not being tangible evidence that people are in a position to increase their discretionary spending.

Ultimately, whereas these sort of things used to matter, it’s not so clear that they any longer do.

Instead, looking forward a few days at a time and changing sentiment and outlook as often as the market does, seems to be an increasingly rational alternative to believing in the sustained rational behavior of the market and the people that guide its movements.