Option to Profit

Week in Review

 

July 6 – 10, 2015

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
3  /  3 2 0 2  /  0 0  /  0 0 1

 

Weekly Up to Date Performance

July 6 – 10,  2015

This had all the makings of yet another miserable week in the markets and then suddenly it was not such a bad week as we ping ponged back and forth between large losses, large gains and then intra-session turnarounds in both directions.

It was a busier than usual of late week, at least as far as new purchases go.

There were 3 new positions opened and they out-performed the adjusted S&P 500 by 3.3% and the unadjusted S&P 500 by 3.1%.

New positions ended the week 3.3% higher, while the unadjusted S&P 500 was 0.01% lower and the adjusted S&P 500 was 0.1% higher.

This week was different from recent weeks in that I could sense a more compelling reason to part with the money that I would like to be building up in my cash reserve. Despite what could be some good news to end the week, I’m not certain that I see the same compelling reasons for the coming week.

Existing positions, over-invested in energy stocks, which were again down heavily this week again lagged the general market this week.

Fortunately, there were a couple of assignments for the week and the 46 closed lots in 2015 continue to outperform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That difference represents a 283.3% performance differential.

As if Tuesday’s nearly 4 hour trading halt wasn’t enough to make this week memorable, it was also one of the most up and down weeks that anyone can remember. It reminded me a little of some of the trading that went on very early in what became the period of the financial meltdown.

The difference, though, is in scale. While these 200 and 300 moves seem large, they are actually dwarfed both in absolute and certainly in relative terms to the moves we saw in the fall of 2008.

In the current market, and for the most part that means all of 2015 to date, it has been a while since there has been any good news to give the markets a reason to move higher. That has been a recurring theme, although for the most part, the market has managed to find a way to go higher.

This week it was a volley between good news and bad news, all of which originated overseas, as China and Greece weighed heavily on people’s minds. For the most part what was interpreted as good news was mostly simply the absence of continuing bad news.

With the market just a hair’s breadth away from a technical support level and at the precipice of a 5% correction, it could have been very easy to tip the scales and move significantly lower this week, even if the bad news had stopped flowing.

At one point in the week the S&P 500 was the equivalent of about 20 DJIA points away from reaching that support level. Another way of thinking about it is that an additional $3 decline in shares of Apple could have triggered technical traders to start dumping all of the shares in their baskets, with the next stop at a support level being quite a bit lower.

Somehow it didn’t go that route as for now the Chinese government’s strong arm attempts to manipulate its markets are holding, after an initial step backwards.

If their effort to suppress normal markets holds and if there is some substantive movement on an agreement toward the resolution of the Greek debt crisis, we may have some optimism ahead of us as earnings season gets into full gear next week.

If some of these overhanging clo
uds can thin out the prospects of some good earnings reports as the financial sector gets things going next week, could be the catalyst we’ve needed for a meaningful push higher.

With next week marking the end of the July 2015 monthly cycle and with only a small number of positions set to expire, it is very much the same situation as this past week.

That is, that while there is a little bit of reserve cash that I would love to be able to preserve, there aren’t very many income producing positions so there may be a need to open some new positions specifically to generate some of the income I’d like to otherwise see for the week.

As with this past week I would very much like to look for those positions that have a reasonable chance of getting assigned at the end of the week so that the money could simply be recycled the following week.

But if next week brings anything resembling this past week’s uncertainty, there’s definitely nothing close to a sure thing.

On the other hand, if next week’s market starts off as did this one, with a large decline, there may be some reason to think that there could be some short term bargains to be had and that perhaps even a small rebound could be enough to see the assignments happen.

Events during the course of this weekend in China and the Greek Parliament could easily set the tone for us next week, but hopefully, if there is bad news those earnings reports could offset some of the angst that would be experienced by the markets.

Additionally, it’s time again for Janet Yellen’s 2 days of Congressional testimony and hopefully she’ll bring that reassuring tone with her in the event that the market is showing weakness to begin the week.

Otherwise, I hope it’s a week that gives some opportunity to get some more call sales made on uncovered positions and that also sees some rebound in energy stocks that have been much beaten down over the past 2 weeks.

 

 

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

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



New Positions Opened:   ANF, BAC, CY

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:  none

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:  CSCO (8/21), DOW (7/32)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: ANF, BAC

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 PositionsGPS (7/6 $0.23)

Ex-dividend Positions Next Week: FCX (7/13 $0.05)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, FCX, GPS, HAL, INTC, JCP, JOY, KMI, LVS,  MCP, MOS, 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.