Option to Profit Week in Review
May 26 – 30,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
3 / 4 4 6 1  / 1 1  / 0 0

    

Weekly Up to Date Performance

May 26 – 30, 2014 

New purchases for the week beat the unadjusted S&P 500 by 0.7% and surpassed the adjusted index by 1.2%

The market finished higher for the second consecutive week and set new closing records for three of the four trading days, but doid so without any real euphoria. New positions were 1.9% higher whole the overall market was up 1.2% on an unadjusted basis. 

Performance of positions closed in 2014 continue to out-perform the S&P 500 performance by 1.6%. They were up 3.2% out-performing the market by 99.2%. 

More records this week, yet with little excitement or buzz.

Earlier this week I showed a graphic that looked at the S&P 500 march higher contrasted with the number of new stock highs. Most everyone who follows that latter metric tells you that when it is going higher it is reflective of a broadly advancing market and a very bullish sign. They also look at the drop in new highs as a bearish signal.

No wonder that people aren’t jumping up and down while the market moves higher. The number of new highs is declining when it should be moving higher, reflecting the very selective and fleeting nature of the advance in individual stocks.

I was among those not terribly thrilled with the performance this week, despite being happy with the new positions opened and the ability to rollover positions and sell new cover on existing positions.

I was also happy with the dividends coming in this week and the way in which positions are set up to receive dividends next week, as well, but would have liked to have seen more assignments.

There were actually relatively few positions expiring this week and happily none expired worthless, all either being rolled over or assigned.

However, the overall performance of the portfolio was lacking this week, predominantly as a result of continued weakness in the commodities sector. It remains hard for me to understand how an economy can be perceived as improving if the very basic building blocks necessary for the growth or maintenance of infrastructure isn’t participating.

Of course the downward revision of GDP earlier this week sent a message that growth wasn’t all its been cracked up to be, but the polar vortex is catching that blame, in the assumption that lost opportunities will be re-captured in coming quarters.

I don’t know, but the kind of thoight that it takes to parse all of that information is well above my pay grade.

Next week has some potential hurdles including lots of attention being focused on European interest rates and our own Employment Situation report. In addition to those is also Monday’s ISM, which recently has recently been weak and has caused the market to hiccough a bit.

While this past week wasn’t as busy trading as was the previous week, I think it would qualify as a busy week at this time next Friday. I’m not expecting to be overly active next week although I certainly wouldn’t want to be left out if the party, even if somewhat muted, continues.

With some replenishment of cash reserves, although not too much, and with a number of rollovers having generated the coming week’s income, there is a buffer that allows the resistance to spending down cash in the coming week.

I continue to want to see uncovered positions earn their keep and have that as a priority over adding new positions for the purposes of creating weekly income streams. The past few weeks have been good in getting some laggards contribute, but there’s much more to be done in that regard.

Coming off all of these highs I’m now increasingly reminded of 2007 when the market setttled in and just went higher every day to the point that people actually seemed to believe that new closing records on a daily basis was an entitlement.

The big difference is that there wasn’t really any sense of nervousness back then. Fortunately, we have that sense of nervousness now and it acts as a sort of Freudian “ego” that may prevent us from doing anything really stupid or that might have long term adverse consequences.

 







 

     

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:  EBAY, GME, GPS, SBGI

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: EBAY, JPM, LOW, MET

Calls Rolled over, taking profits, into extended weekly cyclePFE (6/13)

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

Calls Rolled Over, taking profits, into a future monthly cycle: RIG

Calls Rolled Up, taking net profits into same cyclenone

New STO:  BMY (6/6), FDO (6/6), JPM (5/30), WY (6/21)

Put contracts expiredANF

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:   LLY

Calls Expired:   none

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:  RIG (5/28 $0.75), SBGI (5/28 $0.15), HFC (5/28 $0.50 Special Dividend)

Ex-dividend Positions Next Week:  GME (6/2 $0.33), MOS (6/3 $0.25), COH (6/4 $0.34), GM (6/6 $0.30), HFC (6/4 $0.32)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BX, C, CLF, COH, DRIFCX, GM, JCP, LULU, MCP, MOS,  NEM, PBR ,RIG, TGT, 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.



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