Aug72015

Week in Review – August 3 – 7, 2015

Week in Review

 

Option to Profit

Week in Review

 

Aujust 3 – 7, 2015

 

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

 

Weekly Up to Date Performance

August 3 – 7, 2015

It was another weak Friday and now that seems to be the new normal.

< strong>What wasn’t normal was that the market was down for the seventh consecutive day to end the week.

This week was simply a continuation of that weekly back and forth pattern that has been the rule for the summer. Nothing of importance really happened this week, but that didn’t stop the market from finding an excuse to add to the gestalt. That gestalt is one of great negativity, even as the market is just 3% away from its highs.

There was a little more trading activity this week, however.

The 2 new positions out-performed both out-performed both the adjusted and unadjusted S&P 500 by 2.9%.


Those positions were 1.6% higher for the week while both the adjusted and unadjusted S&P 500 were down by 1.3%.

Despite continuing weakness in energy and commodities existing positions matched the performance of the broader market. That’s not much, but it’s something.

 With no assignments once again,  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.

Good luck trying to find a way to characterize this week or at least to try and explain what was going on.

It was a week that saw invincible stocks like Disney and Apple head into correction territory, joining so many others in the DJIA.

It still seems so incongruous that so many of those companies could be floundering, yet the indices don’t really reflect that to be the case.

For those who only follow the index levels on the nightly news, they may be in for a big surprise when they open up their monthly statements.

For the first time in a while, however, I could see some silver lining to the week. That’s not the way I typically look at things as I tend to focus on the weakest link of the week. Fortunately, I didn’t do the same with my kids or the people that used to work for me. That would have been pretty unbearable for them.

The weak link this week was that there were no assignments and I am essentially at a zero cash level.

I say “essentially” because I segregate my premium income and funds used for non-OTP trades from OTP spreadsheets, in order to keep numbers “clean” so that comparisons can be more accurately made.

What that means is that if I want to execute any new trades next week I will have to dip into those funds, creating a negative cash balance reflected in the OTP spreadsheets. That would be the equivalent of using margin. However, I’m not recommending that anyone use margin or add funds to their accounts. If anything, I would be seeking to raise cash levels. That’s why the weak link for the week was not seeing enough strength on Friday to see either Abercrombie and Fitch and Intel get assigned. Both were in range on Thursday to become a source for next week’s cash needs.

Otherwise, despite a really bad market environment, with most all metrics being dour, it was a reasonably satisfying week.

Although the new positions weren’t assigned, they were at least rolled over and there was the opportunity to sell some calls on two previously uncovered positions.

That’s something, just not enough.

Next week is another where it is really anyone’s guess. The economic news of late isn’t doing anything to inspire confidence and next week has very little other than the Retail Sales report.

That and the beginning of the stream of retailers who have yet to report their earnings.

I won’t hold my breath, but sooner or later someone has to be getting the money from whatever is being saved on gas prices. My guess is that when it happens it will be Wal-Mart before it will be Nordstroms, for what that’s worth. The problem is that kind of logic would have been wrong for all of 2015, while the logic itself would have been sound all through that same time period.

So next week,  with a handful of positions having their contracts due to expire, I would be more than happy to see my trading confined to just rolling those expiring positions ove
r and would be even happier with an assignment here and there.

Given the back and forth of the market these past weeks, maybe we’re in store for one of those weeks that will take us forward. If that’s going to be the case, the timing would be very nice, but I hope that it could extend into the following week, as well, since that has an equal number of positions set to expire.

Hopefully, the next week will be one where some of those “buy on the dip” people come back into the light and practice their magic while exhibiting their bravery. They’ve been pretty reluctant of late and it’s been rare to see consecutive days with nicely higher moves. But after 7 straight sessions with the DJIA lower, even a single day higher would be a nice change of pace.

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, INTC

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: ANF, INTC

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 cycle:  none

New STO:  BBY (8/21), EMC (10/16)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

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: INTC (8/5 $0.24)

Ex-dividend Positions Next Week: AZN (8/12 $0.45)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, FCX, GDX, GM, GPS, HAL, INTC, JCP, JOY, KMI, KSS, LVS,  MCPIQ, MOS, RIG, WFM, WLTGQ (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.



Aug72015

Daily Market Update – August 7, 2015

Daily Market Update

 

 

 

Daily Market Update – August 7,  2015  (8:30 AM)

 

The Week in Review will be posted by 6 PM and the Weekend Update will be posted by Noon on Sunday,


The following trade outcomes are possible today:

Assignments:  none

Rollovers:  ANF, INTC

Expirations:  none


The following were ex-dividend this week: INTC (8/5 $0.24)

The following will be ex-dividend next week: AZN (8/12 $0.45)

Trades, if any, will be attempted to be made prior to 3:30 PM EDT

Aug62015

Daily Market Update – August 6, 2105 (Close)

Daily Market Update

 

 

 

Daily Market Update – August 6,  2015  (Close)

 

After attending last night’s Gordon Lightfoot concert I felt like a young man, again.

Not that the music was invigorating, but because the average age in the crowd must have been in the 70s and instead of smartphone charging stations, there were hearing aid and oxygen tank refill stations spread throughout the venue.

It was all a question of comparables.

By comparison I felt pretty young.

The concert, as expected, was about as invigorating as this market has been, which is to say, not all all.

It was disappointing to see yesterday’s early gains evaporate so quickly as it followed oil and energy prices down the drain.

It’s hard to understand why this market is taking a different path from other markets that have been the beneficiaries of lower energy prices. But, by the same token, it’s hard to understand why this economy hasn’t gotten a kick start from those same lower energy prices, so maybe the market is only reflecting what it sees and what it foresees.

Tomorrow brings the Employment SItuation Report and following yesterday’s early reaction to the ADP Report, which delivered some minor disappointment, as the loss of jobs in the energy sector lowered numbers, it’s probable that a similar disappointment tomorrow may also bring market gains.

Otherwise, it continues to be a typical summer where there is less news than is usually the case, especially once August rolls around and most of Europe closes down. While the data will continue coming in, there will either have to be a significant shift in the direction of the economy demonstrating some real growth, or the FOMC has to abandon its claim to being data dependent.

They may just have to say we know what’s best for the economy and we’re not going to wait for things to happen.

That might just be the best thing.

There’s not necessarily anything wrong with a beneficent dictator and at least a rise in interest rates would get us temporarily to stop playing mind games and instead focus on metrics that matter.

With now just one day of trading left to go and today’s sell-off, there’s still some reason to be hopeful that the week may see either assignment or rollover of what few positions are set to expire. Who knows, maybe even another call sale on an uncovered position, as well. But I don’t want to get too greedy, now having been able to get 2 of those uncovered positions back into making some money while sitting and waiting.

Seeing those hopes all come true would be nice, but certainly not something worth predicting, because the market has been beyond predictable of late, other than it hasn’t been very forgiving.

Add today into the growing amount of confusing data making you wonder just what kind of a market could be so close to its highs yet feel so bad.


 

Aug62015

Daily Market Update – August 6, 2015

Daily Market Update

 

 

 

Daily Market Update – August 6,  2015  (9:15 AM)

 

After attending last night’s Gordon Lightfoot concert I feel like a young man, again.

Not that the music was invigorating, but because the average age in the crowd must have been in the 70s and instead of smartphone charging stations, there were hearing aid and oxygen tank refill stations spread throughout the venue.

It was all a question of comparables.

By comparison I felt pretty young.

The concert, as expected, was about as invigorating as this market has been, which is to say, not all all.

It was disappointing to see yesterday’s early gains evaporate so quickly as it followed oil and energy prices down the drain.

It’s hard to understand why this market is taking a different path from other markets that have been the beneficiaries of lower energy prices. But, by the same token, it’s hard to understand why this economy hasn’t gotten a kick start from those same lower energy prices, so maybe the market is only reflecting what it sees and what it foresees.

Tomorrow brings the Employment SItuation Report and following yesterday’s early reaction to the ADP Report, which delivered some minor disappointment, as the loss of jobs in the energy sector lowered numbers, it’s probable that a similar disappointment tomorrow may also bring market gains.

Otherwise, it continues to be a typical summer where there is less news than is usually the case, especially once August rolls around and most of Europe closes down. While the data will continue coming in, there will either have to be a significant shift in the direction of the economy demonstrating some real growth, or the FOMC has to abandon its claim to being data dependent.

They may just have to say we know what’s best for the economy and we’re not going to wait for things to happen.

That might just be the best thing.

There’s not necessarily anything wrong with a beneficent dictator and at least a rise in interest rates would get us temporarily to stop playing mind games and instead focus on metrics that matter.

With two days of trading left to go there’s still some reason to be hopeful that the week may see either assignment or rollover of what few positions are set to expire. Who knows, maybe even another call sale on an uncovered position, as well.

That would be nice, but certainly not something worth predicting, because the market has been beyond predictable of late, other than it hasn’t been very forgiving.


 

Aug52015

Daily Market Update – August 5, 2015 (Close)

Daily Market Update

 

 

 

Daily Market Update – August 5,  2015  (Close)

 

It was nice to wake up this morning and to see the futures heading nicely higher. They were nearly 100 points higher on the DJIA and those kinds of moves tend to have some staying power.

The word “tend” has some leeway built into it and today all of that leeway was necessary, as that triple digit advance disappeared at 10:30 AM, immediately after the Oil and Gas reports were released.

This morning it was the ADP Employment Report that added to the already impressive gains seen in the futures trading. It did so by putting forward disappointing numbers reflecting job decreases in the energy sector.

So what did the futures market do? It simply added about 50% to those earlier gains.

With that somewhat bad news the market reverted back to its “bad news is good news” mentality, as the initial thought must now be that those kinds of employment statistics would likely mean a further delay in an interest rate increase, even when Federal Reserve Governors are increasingly saying that it’s time for that increase.

It’s too bad that is still the way of interpreting news. At some point the market has to get to the more healthy way of accepting news for its real meaning and simply discounting the first order of events 6 months down the road.

Instead, the market is discounting second order events 6 months into the future. That’s a good way to discover disappointment and to realize that crystal balls get cloudy when you expect too much of them.

It is predicting that the bad news will delay an interest rate increase and then it is further predicting that such a delay in interest rates will be good for the stock market that’s just a bit too much of a stretch.

That’s just too much to try and predict.

It also forgets that there’s lots of data that is still going to be released between now and the September FOMC meeting and those scales can easily be tipped, especially if those FOMC members are getting anxious to finally do something after 9 years of not having had a rate increase.

Maybe the morning’s energy report brought the market back to a more normal way of thinking, although historically anything that drives down the price of oil and gas has been good for the stock market. It’s only been during this recent slide over the past 9 months that the market has reacted in such a strange sort of way.

That still leaves Friday’s Employment Situation Report and an expectation that if the numbers are light that the market may again exhibit some inappropriate rejoicing.

While the flurry of futures buying didn’t continue into the actual trading session today, it came within the context of DJIA component Disney down nearly 5%, which alone took away about 60 points from the DJIA. It also came with a continuing weak Apple, which is now officially in correction mode, despite having recovered from its additional 1% loss in the futures trading.

I’d would have l;ked to have seen those gains continue and hopefully leave expiring positions this week in better shape for either assignment or rollover, so I still can’t complain about the disappointment of losing the day’s gains. There was also an all too rare opportunity to sell some calls on an uncovered position, but it’s going to take some sustained gains to see more of those happen and the staying power of advances hasn’t been very good of late.

We’ll see if bad news can end up being the new good news and take us to the new highs that we’ve started believing is our destiny, even if the masses are left behind.