Weekend Update – May 1, 2016


There was potentially lots that could have moved the market last week.

Earnings season was getting into full swing as oil continued its march higher.

As if those weren’t enough, we had an FOMC Statement release and a GDP report and even more earnings to round out the week.

But basically, none of those really mattered.

The FOMC expressed some confidence in the economy even as the GDP may have said otherwise the following day and earnings were all over the place with the market not being very forgiving when already lowered expectations weren’t met or were being pushed out another quarter.

Again, none of that mattered.

What really mattered was when Carl Icahn, who unlike Chicken Little, calmly told the world that he had sold his entire stake in Apple (AAPL) for fears of what China’s “attitude” might be with regard to the company.

The initial interviewer misinterpreted Icahn’s comments to mean that he was worried about the Chinese economy itself and that may have been exactly how traders interpreted Icahn’s words, although a second interviewer correctly interpreted Icahn’s comments and got him to add clarity.

Icahn confirmed that he was actually worried about the possibility that China would be less of a reliable partner for Apple and not that he envisioned a new round of meltdowns in the CHinese economy or in their financial institutions.

Big difference.

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Week In Review – April 25 – 29, 2016

 

Option to Profit

Week in Review

 

APRIL 25 – 29, 2016

 

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

 

Weekly Up to Date Performance

April 25 – 29, 2016


Last week was one of the best weeks that I can remember in a long, long time.

This week was alright, but it’s all very relative.

For the market it was a bad week, but, once again, on a personal note, it wasn’t too bad.

It wasn’t good enough, though, to want to spend any money on new positions.

When it was all done, it was probably a good week to not spend much, if any money, as the S&P 500 was 1.2% lower on the week.

Existing positions, however, continued to find strength in energy, commodities and 1.3% higher than the S&P 500. But with that said, those positions were only 0.1% higher on the week.

Again, though, no positions were assigned, but at least there was the opportunity to get a rollover, sell calls on an uncovered position and have 3 ex-dividend positions.

The only negatives were that there were no assignments and one short position got assigned.

With no assignments, closed positions continue to be 7.8% higher, while the comparable performance for the S&P 500 during the same holding periods has been 2.7% higher. That represents a 189.2% difference in return on closed positions. Unfortunately, though, there are very few closed positions on the year.

There wasn’t too much of a theme this week, other than caution heading into the FOMC meeting and then the GDP release the following day.

Even with those 2 bits of news, the real impetus for the week, outside of some earnings, which were mostly disappointments, came Carl Icahn’s pronouncements.

Clearly, his opinion holds more weight than that of Warren Buffett.

It’s hard, however, to find 2 so very, very different investors.

This week, it was the less likable of the two who moved things.

Next week? Who knows?

More earnings and maybe more reason to believe that the economy really is taking its sweet time about doing anything to warrant an interest rate increase, although so many now believe that June will be the time for the FOMC’s announcement.

That gives plenty of time for some data to start suggesting that things are looking better, but earnings don’t really seem to be painting a really optimistic picture.

With no assignments this week and no positions set to expire next week, I’d really like to do something with what little cash I have in reserve.

With a couple of ex-dividend positions for the week there is at least something, but I would love to continue adding cover to more uncovered positions.

That has been a really, really slow process.

Another really, really slow process has been seeing some minimal recovery in energy and commodity names and those have been the saving grace, just as they had previously been the Achilles heel.

With retail earnings beginning to crop up the week after the next week, we may get some more direct idea of what the consumer is up to.

In a consumer led economy, that tends to be important, but that’s still more than a week away.

That’s just another reason to not be terribly antsy about spending cash next week, but I really wouldn’t mind some further declines, especially if commodities can balance those declines to some reasonable degree.

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:  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:  M

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: STX

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: MAT, MRO

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  F (2/27 $0.15), MS (2/27 $0.15), KMI (2/28 $0.125)

Ex-dividend Positions Next Week:  BP (5/4 $0.595), INTC (5/4 $0.26)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, BBBY, BBY, CHK, CLF, COH, CSCO,  CY, DOW, FAST, FCX, GDX, GM, GPS, HAL, HFC, HPQ, INTC, IP, JCP, JOY, KMI, KSS, LVS, MCPIQ, MOS, NEM, RIG, WFM, WLTGQ, WY (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.



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Daily Market Update – April 29, 2016

 

 

 

Daily Market Update – April 29, 2016 (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:  M

Expirations:   none

The following were ex-dividend this week:  F (4/27 $0.15), Ms (4/27 $0.15), KMI (4/28 $0.125)

The following are ex-dividend next week:   INTC (5/4 $0.26), BP (5/4 $0.595)

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

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Daily Market Update – April 28, 2016 (Close)

 

 

 

Daily Market Update – April 28, 2016 (Close)


Yesterday, the market reacted positively to the FOMC Statement release.

Going from a mildly negative position to a mildly positive position pretty much reflected what was in that FOMC Statement.

Essentially, there was nothing, which itself wasn’t a surprise.

That was some suggestion of confidence in the path of the economy, which then ignited talk of a June 2016 interest rate increase.

This morning’s GDP may have given some clues as to how much the consumer is actually participating, but based on this morning’s futures, the market isn’t in a buying mood and apparently, neither were consumers.

Oil, for a change, didn’t appear to be a precipitating factor this morning and really wasn’t throughout the day.

Oil was absolutely flat to begin the morning, as the DJIA futures were down triple digits, with lots of earnings to come this morning.

Ultimately, none of that mattered.

All that really mattered was that Carl Icahn expressed his pessimism and revealed that he had sold his entire Apple position.

With the week nearing its end, I was just hoping to be able to see my lone expiring position either get assigned or rolled over.

Now, after the market sell off, that hope of assignment is more faint.

However, I continue not minding seeing some of those positions get rolled over, even if their in the money, rather than assigned.

Even as volatility falls, the rollover premiums are often good enough for select positions to make that a more lucrative, and perhaps less risky venture, than trying to find a new place to park money.

On the other hand, I wouldn’t mind parking some money in cash, even as the market hasn’t been swooning.

For now, it’s been mostly oil and commodities that have really lead the way for 2016, just as they led the other way for 2015.

With that going on, I don’t mind being on the long side for a change and am happy to continue watching those positions move higher, even as they really don’t spell anything good for the broader market nor for the economy.

Today ended up just being another day of out-performance thanks to some miserable performing positions that weren’t dumped.

I’ll take that as long as it can keep on going

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Daily Market Update – April 28, 2016

 

 

 

Daily Market Update – April 28, 2016 (7:30 AM)


Yesterday, the market reacted positively to the FOMC Statement release.

Going from a mildly negative position to a mildly positive position pretty much reflected what was in that FOMC Statement.

Essentially, there was nothing, which itself wasn’t a surprise.

That was some suggestion of confidence in the path of the economy, which then ignited talk of a June 2016 interest rate increase.

This morning’s GDP may give some clues as to how much the consumer is actually participating, but based on this morning’s futures, the market isn’t in a buying mood.

Oil, for a change, doesn’t appear to be a precipitating factor.

It’s absolutely flat to begin the morning, as the DJIA futures are down triple digits, with lots of earnings to come this morning.

With the week nearing its end, I now just hope to be able to see my lone expiring position either get assigned or rolled over.

I continue not minding seeing some of those positions get rolled over, even if their in the money, rather than assigned.

Even as volatility falls, the rollover premiums are often good enough for select positions to make that a more lucrative, and perhaps less risky venture, than trying to find a new place to park money.

On the other hand, I wouldn’t mind parking some money in cash, even as the market hasn’t been swooning.

For now, it’s been mostly oil and commodities that have really lead the way for 2016, just as they led the other way for 2015.

With that going on, I don’t mind being on the long side for a change and am happy to continue watching those positions move higher, even as they really don’t spell anything good for the broader market nor for the economy.

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Daily Market Update – April 27, 2016 (Close)

 

 

 

Daily Market Update – April 27, 2016 (Close)


The market was fairly boring during yesterday’s regular trading session, only moving in a range of about 100 points all day long.

The fireworks may have started after the closing bell with some big disappointments in earnings.

Those may be mollified this morning in the futures as oil was again up in the 2-3% range.

Later, the really big news could have come as the FOMC Statement was released and we could all wonder about the nuanced meanings behind each and every word.

Instead, the market traded in a range of only 150 points as no one was expecting the announcement of a rate increase, especially after the Atlanta Federal Reserve lowered its GDP forecast last month, but you never can know.

The FOMC didn’t change rates, but they did suggest the economy was worthy of their confidence.

Whatever that may mean.

Apparently, no one really knew, but the overall idea was that whatever happened wasn’t bad.

Maybe it was even good.

Tomorrow we have a GDP release, as well, and we may get some better insight into what the consumer is doing with all of that extra money coming from increased employment, living wages and lower oil prices.

So far, the answer has been a big, fat, “nothing.”

That’s also about how much I’ve done this week when it comes to trading, but some of the overnight declines in those reporting earnings last night could have made the morning an attractive one as the morning got ready for trading.

Oil, though, saved the day.

Part of this week’s strategy heading into the week was to consider some of those positions if they did fare poorly when announcing earnings.

In those cases, the hope is that the decline is an over-reaction and not the tip of the iceberg.

So often, the put premiums on such stocks are still very high, as the expectation is for the other shoe to drop.

With the FOMC looming overhead, though, there may have been reason to wait to consider any trade until after the announcement, so as to not also get caught up in a general market downdraft.

Ultimately, it didn’t matter. But if you are still long oil and commodities, it was another good day.



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Daily market Update – April 27, 2016

 

 

 

Daily Market Update – April 27, 2016 (7:30 AM)


The market was fairly boring during yesterday’s regular trading session, only moving in a range of about 100 points all day long.

The fireworks may have started after the closing bell with some big disappointments in earnings.

Those may be mollified this morning in the futures as oil is again up in the 2-3% range.

Later, the really big news may come or not come, as the FOMC Statement is released and we can all wonder about the nuanced meanings behind each and every word.

No one is expecting the announcement of a rate increase, especially after the Atlanta Federal Reserve lowered its GDP forecast last month, but you never know.

Tomorrow we have a GDP release, as well, and we may get some better insight into what the consumer is doing with all of that extra money coming from increased employment, living wages and lower oil prices.

So far, the answer has been a big, fat, “nothing.”

That’s also about how much I’ve done this week when it comes to trading, but some of the overnight declines in those reporting earnings last night may start becoming attractive as the morning gets ready for trading.

Part of this week’s strategy heading into the week was to consider some of those positions if they did fare poorly when announcing earnings.

In those cases, the hope is that the decline is an over-reaction and not the tip of the iceberg.

So often, the put premiums on such stocks are still very high, as the expectation is for the other shoe to drop.

With the FOMC looming overhead, though, there may be reason to wait to consider any trade until after the announcement, so as to not also get caught up in a general market downdraft.



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Daily Market Update – April 26, 2016 (Close)

 

 

 

Daily Market Update – April 26, 2016 (Close)


The market recovered nicely from a big loss yesterday as oil and commodities gave back some of the big gains they’ve made over the past two weeks.

Heading into Wednesday’s FOMC Statement release, you might have had reason to suspect that trading would be pretty quiet, but there’s still the matter of oil and lots of important earnings announcements this week.

This morning, the market again looked as if it will open flat, just as it looked yesterday, but some earnings are coming in that aren’t terrible.

That’s the way the bar is set right now.

The expectation is for terrible and if it’s anything better, well then there’s reason for exaltation.

This morning, not all of those numbers have looked better than the expectations, but more importantly, some companies were giving better guidance.

When oil companies start to give better guidance, such as BP did this morning, there’s reason for some excitement, even if their guidance is heavily dependent on workforce reductions.

History has shown that the market rewards those kind of things, even as they are bad for the overall economy.

Microeconomics versus macroeconomics.

It’s a story as old as Cain and Abel.

This morning’s flat market came the day before the FOMC Statement release, which for the past couple of years has been a day for markets to move strongly higher.

That wasn’t the case last month and may no longer be the case, as the countdown for an interest rate increase is really on full alert.

The market stayed flat all day, with the DJIA trading in a 100 point range.

While oil made a big move higher today, the market didn’t follow suit.

I have some money to spend this week and am still considering doing so, but am torn between the risk of earnings and the lure of dividends.

That’s a story as old as Cain and Abel, too.

This morning’s futures did have oil weaker, but the market wasn’t following very closely. It now seems to be more reactive to larger kind of moves in oil, but today’s big move higher didn’t do the trick.

Oil now appears to be getting comfortable above $40 and the next level that had to be broken was $45.

After today, sights are beginning to get set on $50

At some point, someone is going to look at increase gasoline prices, up about $0.08 last week and make note of how that’s going to hurt the summer travel season.

True, but logic hasn’t worked any of the way down in the price, so we’ll see what role logic may play if the optimistic outlook for the price of oil is correct.

I, for one, who suffered on the way down, would like to see the association continue, even if it is illogical.

With a few ex-dividend positions this week, one potential rollover and the sale of calls on an uncovered position, I’d still like to see some more activity this week.

The idea of a surprise from the FOMC doesn’t seem too likely, but I assume that they use very different criteria than the rest of us when interpreting data, especially the data that we don’t have access to, yet.

Such as Thursday’s GDP.

Meanwhile, the stiff wind before tomorrow’s FOMC may come from earnings releases after the market’s close, as there were some big and prominent losers that may catch some by surprise tomorrow morning, as one man’s buying opportunity is another man’s need to sell.



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Daily Market Update – April 26, 2016

 

 

 

Daily Market Update – April 26, 2016 (7:30 AM)


The market recovered nicely from a big loss yesterday as oil and commodities gave back some of the big gains they’ve made over the past two weeks.

Heading into Wednesday’s FOMC Statement release, you might have had reason to suspect that trading would be pretty quiet, but there’s still the matter of oil and lots of important earnings announcements this week.

This morning, the market again looks as if it will open flat, just as it looked yesterday, but some earnings are coming in that aren’t terrible.

That’s the way the bar is set right now.

The expectation is for terrible and if it’s anything better, well then there’s reason for exaltation.

This morning, not all of those numbers have looked better than the expectations, but more importantly, some companies are giving better guidance.

When oil companies start to give better guidance, such as BP did this morning, there’s reason for some excitement, even if their guidance is heavily dependent on workforce reductions.

History has shown that the market rewards those kind of things, even as they are bad for the overall economy.

Microeconomics versus macroeconomics.

It’s a story as old as Cain and Abel.

This morning’s flat market comes the day before the FOMC Statement release, which for the past couple of years has been a day for markets to move strongly higher.

That wasn’t the case last month and may no longer be the case, as the countdown for an interest rate increase is really on full alert.

I have some money to spend this week and am still considering doing so, but am torn between the risk of earnings and the lure of dividends.

That’s a story as old as Cain and Abel, too.

This morning’s futures do have oil weaker, but the market isn’t following very closely. It now seems to be more reactive to larger kind of moves in oil.

Oil now appears to be getting comfortable above $40 and the next level that has to be broken is $45.

At some point, someone is going to look at increase gasoline prices, up about $0.08 last week and make note of how that’s going to hurt the summer travel season.

True, but logic hasn’t worked any of the way down in the price, so we’ll see what role logic may play if the optimistic outlook for the price of oil is correct.

I, for one, who suffered on the way down, would like to see the association continue, even if it is illogical.

With a few ex-dividend positions this week, one potential rollover and the sale of calls on an uncovered position, I’d still like to see some more activity this week.

The idea of a surprise from the FOMC doesn’t seem too likely, but I assume that they use very different criteria than the rest of us when interpreting data, especially the data that we don’t have access to, yet.

Such as Thursday’s GDP.



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Daily Market Update – April 25, 2016 (Close)

 

 

 

Daily Market Update – April 25, 2016 (Close)


There’s so much going on this week, that it may only make sense that the market might start the week taking a break to get things underway.

In addition to lots and lots of systemically important earnings reports during the course of the week, there is an FOMC Statement release and the GDP release the following day.

Add to that the continuing creep higher of oil and commodities and there shouldn’t be too much of a shortage of events that could catalyze movements in either direction.

What we know so far from earnings is that it’s alright to have mediocre numbers, as long as those mediocre numbers at least had the decency to meet already lowered expectations.

If there were even worse than what was expected or the company continued to guide lower for the next quarter, there was a whole world of hurt awaiting.

Lots of stocks reporting earnings fell into that latter category last week and there were some really big movers.

What there wasn’t much of were really big movers to the upside, even as the market did finish higher for the week.

This week I do have some cash and am willing to dip into the smaller cash reserve than I would like to have.

With 3 ex-dividend positions and one contract expiring this week there is already some income, but as is usually the case, I’d like more.

There are some uncovered positions that may be ready to finally find some cover. For those, I’m not necessarily looking to make a killing, even as their holding periods may have been far too long.

Mostly, I just want to either add to my cash reserve or have some other opportunity to generate regular income from dead money.

I did get a small chance to do that today, happily selling calls on those Seagate Technology puts that were assigned last Friday. With its earnings coming up this week and a need to hold one’s breath over the dividend announcement, I elected to go out a few weeks, just in case the market reacted poorly to whatever news may come its way.

While doing so and looking for other opportunities to nake money from dead positions, I’d at least like it to be the case that the position, once closed lost only in terms of opportunity.

While even that is too much, it’s better than losing in the absolute.

With some big events for the week occurring after we pass the mid-way mark, I’m not too keen on putting more at risk, but some of the earnings related trades have some appeal.

There’s not too much reason, for example, to think that Facebook is going to be even more adversely impacted by the FOMC Statement or the GDP.

You and I might be adversely impacted, and maybe advertisers will cut back a little, but is Twitter or Facebook really that sensitive to the kinds of events that investors try to game?

We’ll findf out, although today oil was once again the reason markets went anywhere, whether related to oil or not.

So if you’re still looking for reason and logic, you may need to go elsewhere.


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