Option to Profit Week in Review
October 20 – 24,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
0 / 0 2 2 0  / 0 6  / 0 0

    

Weekly Up to Date Performance

October 20 – 24, 2014

Last week was the first time in years with no new purchases, but it was more easy the second time around. This week it was just much easier letting everything go along for a ride higher.

Like the previous week which moved strongly lower despite a 300 point move higher to close the week, there really wasn’t much in the way of real news, but there was continuing good earnings from most companies.

This was also the third consecutive weeks with no assignments and so the performance of closed positions remains unchanged again, out-performing the S&P 500 performance by 1.7%. They were up 3.5% out-performing the market by 91.8%. 

There’s not much you can say about a week that the market climbs 4.1% other than to hope that portfolios went along for the ride.

There really wasn’t any news to propel the markets forward as much as perhaps the lack of truly bad news. Even word of an Ebola case identified in New York City did little to spook the over night futures.

Imagine if some of the earnings reports, such as from IBM, Coca Cola and McDonalds, along with the New York Ebola story had hit the markets in the early part of last week when everything looked as if it was sliding lower and lower.

In barely a bit more than a week the market has gone from an intra-day decline of 9% from its September highs to its current 2.4%.lower level. During that time, it’s possible that the market has focused on what has been some really pretty decent earnings, thus far, despite some high profile misses.

Those misses have really been punished brutally by a market that seemingly has less and less patience for anything that can’t stand on its own.

This coming week there is very little news, but lots of continuing earnings reports.

However, in this upcoming news shortened week there is another FOMC Statement scheduled for Wednesday.

What makes this one a bit more critical is that it comes about two weeks after what may have been the true primary cause of the market’s reversal.

That reversal, maybe totally coincidentally, came mid-day on October 16th, when Federal Reserve Governor Jeffrey Bullard said that there should be some consideration given to delaying the end of Quantitative Easing.

Who wouldn’t find that to be music to their ears?

Even those that deride the Federal Reserve for its QE policies have been happy to profit from them.

The suggestion that QE might continue would would be a definite boost to those pushing stocks.

So the risk comes that next Wednesday, lately normally a time when the FOMC gives a boost to markets, there could be some disappointment if the statement doesn’t give some indication that there will be a continuing injection of liquidity by the Federal Reserve into markets.

While there will be many waiting for such a word to come there also has to be a sizable faction that would wonder just how bad things are if the Federal Reserve can’t leave the stage as planned.

Welcome back to the days of is good news bad news.

While the move higher this week was beyond impressive, there’s still no escaping the fact that these kinds of moves only happen in downturns. The question that will remain to be answered is whether the very rapid climb higher from recent lows will have any kind of sustainability.

Although I was ready to make some purchases earlier in the week when there was a brief moment of weakness, I d
on’t have that urge right now. I would be much happier finding the opportunity to simply sell calls on existing positions and let the market go wherever it needs to go.

I was happy to go along for the ride this week, but there weren’t many chances to sell calls, particularly as volatility was drying up, so the happiness was very limited.

As much as everyone was talking about the rise in volatility just a week ago, no one seems to be anxious to speak about the nearly 40% drop since the turnaround began last week.

For the coming week I expect another quiet one, at least personally. The markets may be anything but quiet, as they certainly haven’t been so for the past few weeks, but trying to guess where things may go is always a dicey prospect, just seemingly more so, right now.

   

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:   none

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  none

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

Calls Rolled over, taking profits, into the monthly cycle: IP

Calls Rolled Over, taking profits, into a future monthly cyclenone

Calls Rolled Up, taking net profits into same cyclenone

New STO:  CPB (11/22), CY (11/22)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  ANF, CHK, EBAY, GDX, JOY, LVS

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 PositionsFAST (10/22 $0.25), BX (10/23 $0.44)

Ex-dividend Positions Next Week:  none

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, CHK, CLF, COH, CPB, CY, EBAY, FAST, FCX, GDX, GM, GPS, HAL, HFC, .JCP, JOY, K,  LULU, LVS, MCP, MOS,  NEM, RIG, TGT, TMUS, 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.