|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|4 / 4||0||5||3 / 0||2 / 0||0|
Weekly Up to Date Performance
September 8 – 12, 2014
New purchases for the week beat the unadjusted S&P 500 by 1.6% and the adjusted index by 1.4% during a week that the market made some wonder whether another of the mini-corrections was being heralded.
As usual, those weeks marked by weakness tend to have the performance of new positions exceed that of the market in general, as the premiums act as a cushion to the declines, even when those declines are severe.
It was a week of little news and little reason to believe that the market would go decisively in either direction, but certainly more reason to be skeptical of it continuing to reach new closing highs, as the market, after a listless performance last week seemed to set itself up in September as a reversal of a very strong August.
While new positions did well, those with exposure to metals and energy followed the market in its decline for the week as commodities were very weak.
Performance of closed positions continued to out-perform the S&P 500 performance by 1.7%. They were up 3.6% out-performing the market by 91.9%.
Last week the big news was the tragic death of a comedian, while this week the spotlight was shared by an abusive football player and the unveiling of new Apple products.
At least next week has an FOMC statement and even a Federal Reserve Chairperson press conference.
But this was another week where there wasn’t much materially to move the markets, other than perhaps some jobless statistics. Those initially moved the market and were taken far more seriously than were the prior week’s Employment Situation numbers that were essentially written off as being in error.
Otherwise, there was nothing this week that really could have accounted for the weakness that prevailed all throughout the week. Maybe it was simply an issue of everyone being in a bad mood from having returned from their beach homes.
With only four new purchases for the week, including one late in the day on Friday, I feel fortunate to be able to see three positions get assigned and having been able to roll over 5 positions. Much of that good luck was thanks to the market’s comeback from deeper losses on Thursday, but unfortunately that momentum couldn’t be continued to end the week. Although rolling over early tends to cost more, despite being offset by the additional day’s worth of premium received on the sale side, it’s often far better to make those trades when there is opportunity, because you never know what tomorrow will bring.
And today was tomorrow and we all know how that went.
Of course, even with some good news, that still left two positions expired and without cover to add to that list and there were no new covered positions created during a week that essentially only saw downward pressure.
On another positive note, there was some ability to bypass next week’s monthly cycle ending when rolling over most of the positions this week, creating a little bit of diversification by time. Not much, but a little.
As volatility did increase this week that provided some of that opportunity to look forward in time a little, rather than being so heavily weighted with expirations on a single day. Most of us have seen how quickly a market can turn, even if just for a day, so it’s better not to have all of those positions exposed to one of those kind of days.
Next week Wednesday, for example, could be one of those days, as there’s lots of speculation that some of the wording of the FOMC statement could be changed, indicating an earlier start to the rise in interest rates.
That’s something to keep in mind, especially for those positions that do have extended weekly options available to be traded, thereby possibly avoiding any unpleasant surprises.
As if that’s not enough the very next date we may know the fates of Scotland and England, which could have some surprises awaiting us, at least in the short term.
Beyond that, there’s also the matter of the much anticipated IPO of Ali Baba which should suck lots of liquidity out of the market, as it is probably likely that lots of money will be chasing that position that may have otherwise gone elsewhere.
With cash at a fairly low level I don’t expect to do too much new position buying next week, although admittedly, some prices do look enticing, including all three of the positions assigned this week and a number of others that have been regular parts of the portfolio in the past.
Still, despite this really poorly performing week, the market isn’t even down by 2% from its recent August highs.
If the past is any indicator, we could still be at risk for about another 3% on the downside if this is another of those mini-corrections in the marking.
That is another reason why I may not be rushing in to spend down whatever cash is available.
In other words?
Relax and enjoy the weekend, because next week may be interesting.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: BP, CY, EBAY, WFM
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: EBAY
Calls Rolled over, taking profits, into extended weekly cycle: HAL (9/26), IP (9/26), LVS (9/26), WFM (9/26)
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 cycle: none
New STO: none
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: BP, WAG
Calls Expired: BX, EBAY
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: GMOH (9/8 $0.30), NEM (9/9 $0.025)
Ex-dividend Positions Next Week: LVS (9/18 $0.50)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, BMY, BX, CHK, CLF, COH, FCX, GM, JCP, LULU, LVS, MCP, MOS, NEM, 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.