Nov62015

Week in Review – November 2 – 6, 2015

Week in Review

 

Option to Profit

Week in Review

 

NOVEMBER 2 – 6, 2015

 

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

 

Weekly Up to Date Performance

November 2 – 6, 2015


The week started off with lots of promise and ended with a fizzle, but saw the market probably do the right thing heading into the Employment Situation Report on Friday.

There was only 1 new position opened for the week and it surpassed the unadjusted S&P 500 by 0.1% and the adjusted S&P 500 by 1.3% .

That single position was 1.1% higher for the week while the unadjusted S&P 500 was 1.0% higher and the adjusted S&P 500 was 0.2% lower.

That large discrepancy between adjusted and unadjusted performance is related to the timing of the purchase of that single position which happened on Tuesday, rather than on Monday when the market had its large gain.

Once again energy and commodities continued their weakness, despite having dome mid-week strength.

For the year the 70 closed lots in 2015 continue to outperform the market. They are an average of 4.6% higher, while the comparable time adjusted S&P 500 average performance has been  1.1% higher. That difference represents a 334.5% performance differential. 

The big news for the week was the Employment Situation Report, but it seems as if the market completely discounted the good news in its early trading for the week and then ended up actually taking it for what it was.

Good news.

This was yet another week of no real news, other than for Friday’s Employment Situation Report. Although there were lots of earnings reports, the reality is that Facebook doesn’t really matter as far as being a barometer of things.

Next week, though, as retailers do begin releasing their earnings, those could very well be the barometer that we and more importantly, the FOMC, have been looking for.

With a very strong gain in employment, well above the threshold that the FOMC has set, some strong retail numbers could finally convince everyone that the time has finally come for that interest rate increase.

If it does finally come in December, the IMF and ECB can’t get too upset with us, as we came close to waiting and holding off until 2016 as could possibly have been the case.

With only a single new position opened this past week and 2 assignments, there will be a little more added to the cash reserve, which is something that I’ve wanted to see for quite some time.

So far, it has worked out well borrowing from myself, in essence the equivalent of having used margin, in order to fuel some new position purchases over the past 2 months.

With those assignments and the rollovers for the week, in addition to the 2 ex-dividend positions, I finished the week reasonably satisfied, although I would have liked it if the week hadn’t gotten off to such a strong start and I could have perhaps added some of those ex-dividend trades.

I was also a little disappointed in not being able to sell any options on uncovered positions as the trades I had put in hoping to get made just wilted away as the week came to its end.

Next week, with cash in hand, I am definitely on the look out for some good reason to spend. With no contracts expiring next week I would like to be able to find a way to generate some cash from the money pile, but again, I’m not prone to being reckless with that money.

My hope is that there is some weakness to begin the week, just as I had hoped would have happened this week.

There are a couple of potential dividend plays next week and I think my focus will continue in that area, especially as volatility has again fallen so low.

Given how well the market seems to have accepted the good employment numbers, I think that it may be in a state of mind to act very rationally if retailers do start reporting good numbers next week. 

A little good news on the retail front could be just the thing to send the market beyond its August highs.

While that’s sad for volatility, it may be just the thing to take us into the holidays.

 

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

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:  BBY (11/27), WMT (12/11)

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

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: INTC, 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: INTC (11/4 $0.24), BP (11/4 $0.60)

Ex-dividend Positions Next Week:   IP (11/12 $0.49)

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.



Nov62015

Daily Market Update – November 6, 2015

Daily Market Update

 

 

 

Daily Market Update – November 6,  2015  (7:30 AM)

 

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  none

Rollovers:  MS, WMT

Expirations:  BBY, F

The following were ex-dividend this week:  BP (11/4 $0.60), INTC (11/4 $0.24)

The following are ex-dividend next week:  IP (11/12  $0.44)

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

Nov52015

Daily Market Update – November 5, 2015 (Close)

Daily Market Update

 

 

 

Daily Market Update – November 5,  2015  (Close)

 

So far, this week hasn’t really had anything terribly newsworthy, at least as far as the markets are concerned.

That didn’t stop the first 2 days of the week from showing nice gains, despite having had lackluster pre-opening futures sessions that offered no predictive guidance.

This morning looked to be another of those quiet opens, but today it may made more sense for the market to keep a relative lid on things, just as it did yesterday.

For a change, it actually did what it made sense to do.

While the week has been a quiet one on the news front, that can all change tomorrow as the Employment Situation Report is released before the market’s open.

It really is anyone’s guess how the market will respond to any kind of number, but most people are of the belief that the FOMC’s new guideline of 150,000 newly created jobs will be easily surpassed, although last month could prove to be something other than an aberration.

The real question is what will now be the new “disappointment.”

Will traders be disappointed if that employment number from last month proves not to have been an aberration or will they revert back to their old selves and look at such bad news as prolonging a sort of free money environment.

For the longest time I’ve been waiting for traders to be of the more rational mindset that good economic news, especially at the beginning of a tangible up slope, has to be good for the market and for corporate profits.

But for the longest time those traders have looked at anything reflecting an improving economy as being bad for them.

Historically, that’s been true in the later phases of an expansion, but not really true in the early phases.

Despite slow and steady climbs in employment over the past few years, there still hasn’t been that obvious upswing in the economy that’s usually fueled by people going back to work and believing that they will be in work for some time to come.

Maybe tomorrow will finally get traders to believe that the economy is growing enough to begin their focus on such things as revenues and real profits, not the kind that are manufactured through stock buybacks or cost cuts.

With a number of positions set to expire tomorrow, I may be a little defensive if some offer an opportunity to rollover. That would be the case if I thought they would be less likely to be assigned, especially with tomorrow’s overhang.

As with last month, you can’t discount the possibility of a strong market reaction to the report’s release and then a strong counter- reaction to that reaction.

I would just like to end the week with some money to move forward next week and maybe some extra income.

That’s the case every week, but for now we may be held hostage by tomorrow.

Nov52015

Daily Market Update – November 5, 2015

Daily Market Update

 

 

 

Daily Market Update – November 5,  2015  (7:30 AM)

 

So far, this week hasn’t really had anything terribly newsworthy, at least as far as the markets are concerned.

That didn’t stop the first 2 days of the week from showing nice gains, despite having had lackluster pre-opening futures sessions that offered no predictive guidance.

This morning looks to be another of those quiet opens, but today it may make more sense for the market to keep a relative lid on things, just as it did yesterday.

While the week has been a quiet one on the news front, that can all change tomorrow as the Employment Situation Report is released before the market’s open.

It really is anyone’s guess how the market will respond to any kind of number, but most people are of the belief that the FOMC’s new guideline of 150,000 newly created jobs will be easily surpassed, although last month could prove to be something other than an aberration.

The real question is what will now be the new “disappointment.”

Will traders be disappointed if that employment number from last month proves not to have been an aberration or will they revert back to their old selves and look at such bad news as prolonging a sort of free money environment.

For the longest time I’ve been waiting for traders to be of the more rational mindset that good economic news, especially at the beginning of a tangible up slope, has to be good for the market and for corporate profits.

But for the longest time those traders have looked at anything reflecting an improving economy as being bad for them.

Historically, that’s been true in the later phases of an expansion, but not really true in the early phases.

Despite slow and steady climbs in employment over the past few years, there still hasn’t been that obvious upswing in the economy that’s usually fueled by people going back to work and believing that they will be in work for some time to come.

Maybe tomorrow will finally get traders to believe that the economy is growing enough to begin their focus on such things as revenues and real profits, not the kind that are manufactured through stock buybacks or cost cuts.

With a number of positions set to expire tomorrow, I may be a little defensive if some offer an opportunity to rollover. That would be the case if I thought they would be less likely to be assigned, especially with tomorrow’s overhang.

As with last month, you can’t discount the possibility of a strong market reaction to the report’s release and then a strong counter- reaction to that reaction.

I would just like to end the week with some money to move forward next week and maybe some extra income.

That’s the case every week, but for now we may be held hostage by tomorrow.

Nov42015

Daily Market Update – November 4, 2015 (Close)

Daily Market Update

 

 

 

Daily Market Update – November 4,  2015  (Close)

 

After 2 days of really nice gains, despite some give back in yesterday’s trading, the S&P 500 was sitting only about 1.5% below its all time high as the day started.

There was certainly nothing to suggest that the market would have taken the opportunity to spend the past 2 days in a celebratory mode, especially since the final day of this week could be an antidote to the happiness.

It’s really hard to understand how the market will react to Friday’s Employment Situation Report, but it seems that everyone is again willing to accept the fact that the FOMC will either be really ready to raise rates very soon, or at the very least will increase their hawkish tone, as there’s little reason to believe that the upcoming Employment Situation Report won’t reach the fairly feeble threshold that was just set.

The difficulty in predicting what may happen at the end of the week is that there could be a “buy on the rumor, sell on the news” kind of situation being set up if the number is well above 150,000, as it had been for much of the past 3 years, other than last month.

Alternatively, if the number continues on the very low side and maybe teeters near 150,000 again, there may be some concern.

If the number is really strong and especially if there are revisions to last month’s low number, there could be reason for even more buying on the basis of “good news is again good news,” with traders believing that rates could possibly be raised even as early as December.

Friday will be a big day, but next week, as national retailers report, could be even bigger, if the top line numbers are strong.

While the bottom line is important, right now the real focus is on whether people are spending money and not as much on how businesses are managing their businesses.

With only a single purchase for the week and with all of those prospective dividend plays being ex-dividend today, I don’t think there will be too much more activity for the week, other than to keep an eye on those positions due to expire in a few days.

With the unknown of Friday’s Employment Situation report coming up and with volatility back down to its usual low levels, there’s very little reason now to think about taking the risk of 3 day options, as the reward is so very low. Any new purchase now would really have to look at an extended or a monthly option to be remotely appealing. But with big news looming on Friday, I don’t have much reason to get in front of that news.

At this point, I would have much rather seen the market continue the week’s trend and move higher. I didn’t mind going along for the ride, especially if energy was part of it, as it was yesterday and being able to roll over existing positions or see them assigned.

Maybe tomorrow.

But, if that’s the case, then the pattern starts over again and the wish is for some pullback to start next week, perhaps with more cash in hand to pick up relative bargains, as the evidence will continue coming in to suggest that the economy is heating up and may perhaps serve as the most appropriate catalyst for the market to begin testing and exceeding its highs.

.