Option to Profit

Week in Review

 

October 19 – 23, 2015

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
2   /   3 1 4 3   /   1 0  /  0 0 1

 

Weekly Up to Date Performance

October 19 – 23, 2015

The latter part of the week was a perfect storm and in a good way for the market and it had its fourth consecutive gaining week, ever since the turnaround on the day the last Employment Situation Report was released.< /strong>

There were 3 new positions opened for the week, but they lagged both the adjusted and unadjusted S&P 500 by 1.0%

Those positions were still 1.1% higher for the week, but just couldn’t keep pace with the S&P 500 which finished 2.1% higher thanks to the tremendous gains on Thursday and Friday.

This week energy and commodities continued their weakness, as did healthcare, but everything else was buoyed the last two days of the week.  Existing positions were flat for the week lagging the overall market, just as in the previous as they were compromised by energy and materials.

For the year the 66 closed lots in 2015 continue to outperform the market. They are an average of 4.8% higher, while the comparable time adjusted S&P 500 average performance has been  1.1% higher. That difference represents a 321.9% performance differential. 

Earnings reports started coming this week and they were for the most part pretty uninspiring until the close of trading on Thursday.

On that day the market was already heading toward a 320 point gain as the ECB gave US markets a gift before the open by suggesting that their version of QE was going to continue.

The rally was prolonged with the first real set of good earnings numbers and they came from important players: Google, Microsoft and Amazon, representing 3 very different segments of the consumer discretionary and business worlds.

If they were reporting better revenues and profits how could that not have some meaning for the broader economy?

So stocks surged again, further helped by a rate decrease by the People’s Bank of China in their effort to jump start their economy which was just reported to be struggling along with a GDP growing at just 7%.

Just 7%?

So this was a good week all around.

There were 3 new positions opened and 4 positions were rolled over, in addition to finding some coverage for an uncovered position.

There was also a single ex-dividend position.

Best of all, there was the assignment of 3 positions and the expiration of one short put sale, helping to free up some cash to either sit or be redeployed.

With all of that, however, there are no positions set to expire next week, so the likelihood is that if any new positions are opened with the increased cash position, they will look for either a dividend or a weekly time frame.

My expectation had been that the coming week was likely to show some euphoria as there was little reason to suspect that the FOMC would raise interest rates. Since we are back on a “bad news is good news” mindset, that would likely give reason for more buying.

However, with so much of an advance this week and someone bound to raise the issue of how far off will that rate increase now be once we’ve seen such strong earnings from some key players, I’m not as convinced of next week’s strength, anymore.

With next week still offering so many companies reporting earnings some care has to be taken to not get overly exposed to companies that have that added risk feature. Despite the great earnings reported by Google et al, the earnings season has otherwise not been very encouraging and has offered lots of punishment for those disappointing even by just a little.

With cash available next week, I would again be happy to see some weakness creep back in, at least maybe to start the week.

Friday’s strong close has placed some of the positions that I was eyeing for next week more expensive than I would like, so I may be more passive than  I would prefer to be as the next week gets off to its start.

With volatility suddenly taking a dive and returning close to where it was a month ago some of the easy new position trades and rollovers will likely be on hiatus, but next week may hold some surprises if the FOMC takes note of some evidence of an economy that’s heating up in key sectors and changes the wording of its statement to reflect that observation.

I’ll be tuned in.


 

 

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:  MS, STX, (puts), WMT

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:  IP (12/18)

Calls Rolled Up, taking net profits into same cyclenone

New STO:  INTC (1/16/16)

Put contracts expired: STX

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: BBY ($33.50), MET, MS

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: FAST (10/23 $0.28)

Ex-dividend Positions Next Week:   KMI (10/29 $0.51), WY (10/28 $0.31)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, CY, FAST, FCX, GDX, GPS, HAL, HPQ, INTC, JCP, JOY, KMI, KSS, LVS,  MCPIQ, MOS, NEM, 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.