Jan232015
Jan232015
Week in Review – January 19 – 23, 2015
| NEW POSITIONS/STO | NEW STO | ROLLOVERS | CALLS ASSIGNED/PUTS EXPIRED | CALLS EXPIRED/PUTS ASSIGNED | CLOSED |
| 3 / 3 | 2 | 3 | 2 / 0 | 1 / 0 | 0 |
Weekly Up to Date Performance
January 19 – 23, 2015
After a fairly miserable beginning to 2015 we were due for something good sooner or later.
With 3 new positions added this week, all within about the first hour of the week’s opening bell, those positions ended the week 1.4% higher. However, that wasn’t enough to beat the S&P 500 which was 1.6% higher for the week on both adjusted and unadjusted bases.
After 3 successive down weeks, yet existing positions nicely outperforming the market, this week there was some catch up, as existing positions were still 1.2% higher, but trailed the market’s performance by 0.4%, as can usually be expected when markets are strongly higher.
Two of the new positions for the week were assigned with closed positions for 2015 3.8% higher, as compared to the 2.2% advance for the time adjusted market, representing a 76.2% difference
While the big news for the week was the ECB finally embracing Quantitative Easing, despite the likelihood that their doing so won’t have any positive impact on the US markets, we acted as if it would, at least for a very short period of time.
I’m not complaining, as I like anything that sends portfolio values higher, but the lack of follow through to end the week, especially a week that was generally positive even before the announcement, was a little disappointing.
However, on a positive note, we’re far better off depending on ourselves for markets to advance as opposed to depending on the ECB.
Instead of being the unlikely beneficiaries of ECB injection of liquidity into their bond markets, which could scarcely drive their interest rates any lower, we are likely to begin seeing some tangible benefit of lower energy costs sooner or later and hopefully those will serve as the driver of higher stock prices to come.
Up until the final hour it looked as if all three new positions for the week would get assigned, but the interest rate sensitive MetLife succumbed to the large drop in interest rates later in the session.
While I was happy you see 2 positions get assigned, I would have been happier for all three, but would have welcomed back the chance to repurchase MetLife, and maybe even Intel or Best Buy, if they open the following week lower.
This was actually a very interesting week as the first 3 days of trading saw significant turnarounds from the pre-opening futures trading within about 30 to 60 minutes of trading and then turnarounds from the turnarounds.
As with most weeks I’m always disappointed by the number of new STO trades that are made on existing uncovered positions. While I would love to do more DOH trades, despite the greater attention they need in order to avoid assignment, the volatility, despite some transient increases, has still been too low to offer a risk – reward proposition that’s worth taking looking at.
As it is, I’m happy that there were some opportunities to rollover some positions and make some of those new call sales, but just like this week, next week doesn’t have very many positions set to expire on Friday.
That means that I’ll likely be looking for new positions next week with weekly option expirations, as it will be another week that I wouldn’t mind adding some new positions, even though I’d like to see cash reserves beefed up a bit more.
Next week will be the busiest week for S&P 500 company earnings and despite the fairly weak earnings so far, I think there may be some hints of good news to come as we start hearing from more consumer names and more from companies that stand to benefit from lower energy costs.
That includes some large oil companies that also begin reporting next week. If they’re able to deliver some news, as did Schlumberger and Halliburton, that wasn’t as bad as expected, that could help create some confidence going forward.
Hopefully that will be the case and I would certainly like to see another week like this one, even if it may end on a sour note.
In addition to earnings next week, while the overall week is a quiet one for economic news, it will feature both an FOMC Statement release and GDP statistics two days later.
With interest rates having been so volatile the past two weeks, both of those events net week could add to that volatility and make the week more interesting.
Not that I really yearn for things to be more interesting. Lately they’ve been interesting enough.
This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: BBY, INTC, MET
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: GPS
Calls Rolled over, taking profits, into extended weekly cycle: EMC (2/6), MET (2/6)
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: AZN (2/20), SBGI (3/20)
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: BBY, INTC
Calls Expired: BAC
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: none
Ex-dividend Positions Next Week: FAST (1/28 $0.28)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, BAC, BP, CHK, CLF, COH, DOW, FCX, HAL, HFC, .JCP, JOY, LVS, MAT, MCP, MOS, NEM, RIG, SBGI, 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.
Jan232015
Daily Market Update – January 23, 2015
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Daily Market Update – January 23, 2015 (8:00 AM) The Week in Review will be posted by 6 PM tonight and the Weekend Update will be posted by Noon on Sunday. The following trade outcomes are possible today: Assignments: INTC, MET Rollovers: BBY Expirations: BAC, EMC There were no ex-dividend positions this week. FAST will be ex-dividend next week (1/28 $0.28) The following positions will be reporting earnings next week: COH (1/27), FCX (1/27), LXK (1/27), EMC (1/28), LVS (1/28), BX (1/29), DOW (1/29), MAT (1/29), PBR (1/30)
Trades, if any, will be attempted to be made prior to 3:30 PM EST.
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Jan222015
Daily Market Update – January 22, 2015 (Close)
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Daily Market Update – January 22, 2015 (Close) All eyes were on this morning’s announcement from the European Central Bank regarding an initiation of its version of Quantitative Easing. Over the past few months as all eyes had previously been focused on the ECM in expectation of the very same announcement, there had been nothing but disappointment, as Mario Draghi, the President of the ECB talked a great game and occasionally spoke with a John Wayne like swagger and confidence, but delivered on none of it. This morning, although this has been said before, had the appearances of being different. The reason it was being given some greater likeliness of finally really be different was because of a credible leak yesterday that gave details of the monthly size of the ECB bond buybacks. The figures suggested seemed to be right along the lines of what many believed it needed to be and was received warmly, although with nowhere near the enthusiasm of previous well placed source leaks or educated guesses regarding the FOMC’s upcoming actions, from the Wall Street Journal’s Jon Hilsenrath. Yesterday’s leak may have been what was responsible for the market’s decisive turnaround shortly after the opening bell. This morning, ahead of the expected announcement the futures were just mildly higher, so it remained to be seen what effect, if any and in what size the reaction might be and, of course, for how long that reaction would last. About an hour before the official announcement came word that European interest rates would remain unchanged and even though that was not a surprise it gave a small bump to the futures. Later, when Draghi spoke, not only confirming that action was going to begin, he indicated that the size of the monthly European bond buyback would be 20% larger than thought and would last longer than anyone thought and in fact would be open-ended, lasting until at least September 2016. The initial response was ebullient in the futures market, but did calm down a little. In fact, shortly after the opening bell the market actually turned negative, but somewhere along the line, about 45 minutes after the open, the market took off, having really embraced the news. While the news may be beneficial for European stock markets in the longer term, there’s really no reason to think that it will be the kind of news or provide the kind of fuel needed to send US markets higher for anything much more than a day or so, but it was certainly good to see, even if it is short lived. The real impetus for further increases could still be upcoming earnings, although thus far, they haven’t been very impressive, although we really haven’t heard anything yet from those businesses that would reasonably be expected to benefit from a severe drop in energy prices.< /span> Interestingly, in an interview yesterday, the CEO of Dow Chemical, which has small oil holdings as part of a Kuwaiti partnership and has seen its shares drop sharply in concert with oil prices, said that the net result of energy price declines was very good for Dow Chemical, because it is a far greater user of energy than it is a producer of energy. That’s something that hasn’t really been factored in yet and Dow Chemical reports its earnings next week. As with many companies, the earnings may be of interest, but it’s the future guidance that may hold the key. Hopefully this morning’s ECB announcement will bring some happy news to the US markets as that would be a good way to bring a shortened trading week to its end. With a few positions set to expire tomorrow, I’d like to see them positioned to either be assigned or rolled over and a couple of good days in succession would really help. So, Mario, we wanted to know “What’s it going to be?” and this time you didn’t disappoint, but what have you done for us lately?
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Jan222015
Daily Market Update – January 22, 2015
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Daily Market Update – January 22, 2015 (7:30 AM) All eyes are on this morning’s announcement from the European Central Bank regarding an initiation of its version of Quantitative Easing. Over the past few months as all eyes had previously been focused on the ECM in expectation of the very same announcement, there had been nothing but disappointment, as Mario Draghi, the President of the ECB talked a great game and occasionally spoke with a John Wayne like swagger and confidence, but delivered on none of it. This morning, although this has been said before, may be different. The reason it may finally really be different is because of a credible leak yesterday that gave details of the monthly size of the ECB bond buybacks. The figures suggested seemed to be right along the lines of what many believed it needed to be and was received warmly, although with nowhere near the enthusiasm of previous well placed source leaks or educated guesses regarding the FOMC‘s upcoming actions, from the Wall Street Journal’s Jon Hilsenrath. Yesterday’s leak may have been what was responsible for the market’s decisive turnaround shortly after the opening bell. This morning, ahead of the expected announcement the futures are just mildly higher, so it remains to be seen what effect, if any and in what size the reaction might be and, of course, for how long that recation will last. While the news may be beneficial for European stock markets in the longer term, there’s really no reason to think that it will be the kind of news or provide the kind of fuel needed to send US markets higher for anything much more than a day or so. The real impetus could still be upcoming earnings, although thus far, they haven’t been very impressive, although we really haven’t heard anything yet from those businesses that would reasonably be expected to benefit from a severe drop in energy prices. Interestingly, in an interview yesterday, the CEO of Dow Chemical, which has small oil holdings as part of a Kuwaiti partnership and has seen its shares drop sharply in concert with oil prices, said that the net result of energy price declines was very good for Dow Chemical, because it is a far greater user of energy than it is a producer of energy. That’s something that hasn’t really been factored in yet and Dow Chemical reorts its earnings next week. As with many companies, the earnings may be of interest, but it’s the future guidance that may hold the key. Hopefully this morning’s ECB announcement will bring some happy news to the US markets as that would be a good way to bring a shortened trading week to its end. With a few positions set to expire tomorrow, I’d like to see them positioned to either be assigned or rolled over and a couple of good days in succession would really help. So, Mario? What’s it going to be?
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