Oct242014

Week in Review – October 20 -24, 2014

Week in Review

 

Option to Profit Week in Review
October 20 – 24,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
0 / 0 2 2 0  / 0 6  / 0 0

    

Weekly Up to Date Performance

October 20 – 24, 2014

Last week was the first time in years with no new purchases, but it was more easy the second time around. This week it was just much easier letting everything go along for a ride higher.

Like the previous week which moved strongly lower despite a 300 point move higher to close the week, there really wasn’t much in the way of real news, but there was continuing good earnings from most companies.

This was also the third consecutive weeks with no assignments and so the performance of closed positions remains unchanged again, out-performing the S&P 500 performance by 1.7%. They were up 3.5% out-performing the market by 91.8%. 

There’s not much you can say about a week that the market climbs 4.1% other than to hope that portfolios went along for the ride.

There really wasn’t any news to propel the markets forward as much as perhaps the lack of truly bad news. Even word of an Ebola case identified in New York City did little to spook the over night futures.

Imagine if some of the earnings reports, such as from IBM, Coca Cola and McDonalds, along with the New York Ebola story had hit the markets in the early part of last week when everything looked as if it was sliding lower and lower.

In barely a bit more than a week the market has gone from an intra-day decline of 9% from its September highs to its current 2.4%.lower level. During that time, it’s possible that the market has focused on what has been some really pretty decent earnings, thus far, despite some high profile misses.

Those misses have really been punished brutally by a market that seemingly has less and less patience for anything that can’t stand on its own.

This coming week there is very little news, but lots of continuing earnings reports.

However, in this upcoming news shortened week there is another FOMC Statement scheduled for Wednesday.

What makes this one a bit more critical is that it comes about two weeks after what may have been the true primary cause of the market’s reversal.

That reversal, maybe totally coincidentally, came mid-day on October 16th, when Federal Reserve Governor Jeffrey Bullard said that there should be some consideration given to delaying the end of Quantitative Easing.

Who wouldn’t find that to be music to their ears?

Even those that deride the Federal Reserve for its QE policies have been happy to profit from them.

The suggestion that QE might continue would would be a definite boost to those pushing stocks.

So the risk comes that next Wednesday, lately normally a time when the FOMC gives a boost to markets, there could be some disappointment if the statement doesn’t give some indication that there will be a continuing injection of liquidity by the Federal Reserve into markets.

While there will be many waiting for such a word to come there also has to be a sizable faction that would wonder just how bad things are if the Federal Reserve can’t leave the stage as planned.

Welcome back to the days of is good news bad news.

While the move higher this week was beyond impressive, there’s still no escaping the fact that these kinds of moves only happen in downturns. The question that will remain to be answered is whether the very rapid climb higher from recent lows will have any kind of sustainability.

Although I was ready to make some purchases earlier in the week when there was a brief moment of weakness, I d
on’t have that urge right now. I would be much happier finding the opportunity to simply sell calls on existing positions and let the market go wherever it needs to go.

I was happy to go along for the ride this week, but there weren’t many chances to sell calls, particularly as volatility was drying up, so the happiness was very limited.

As much as everyone was talking about the rise in volatility just a week ago, no one seems to be anxious to speak about the nearly 40% drop since the turnaround began last week.

For the coming week I expect another quiet one, at least personally. The markets may be anything but quiet, as they certainly haven’t been so for the past few weeks, but trying to guess where things may go is always a dicey prospect, just seemingly more so, right now.

   

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:   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:  WFM

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

Calls Rolled Over, taking profits, into a future monthly cycle:  none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  CPB (11/22), CY (11/22)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  ANF, CHK, EBAY, GDX, JOY, LVS

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 (10/22 $0.25), BX (10/23 $0.44)

Ex-dividend Positions Next Week:  none

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, CHK, CLF, COH, CPB, CY, EBAY, FAST, FCX, GDX, GM, GPS, HAL, HFC, .JCP, JOY, K,  LULU, LVS, MCP, MOS,  NEM, RIG, TGT, TMUS, 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.



Oct102014

Week in Review – October 6 – 10, 2014

Week in Review

 

Option to Profit Week in Review
October 6 – 10,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
2 / 2 2 6 0  / 0 2  / 0 0

    

Weekly Up to Date Performance

October 6 – 10, 2014

New purchases for the week beat both the unadjusted and adjusted S&P 500 by 1.5% during a week that finally had everyone noticing the back and forth movements of regularity of triple digit moves, now expanding to levels of 200 and 300 points.

However, that is simply in relative terms, as those new positions still fell by 1.6% as compared to the S&P 500, which was 3.1% lower for the week, as the DJIA actually finished below 2013’s close.

It was a week of little news other than the FOMC and some more errant words from Mario Draghi.

That changed Friday afternoon with some credit warnings in Europe, including downgrades of Finnish and French debt.

With no assignments this week performance of closed positions were unchanged from last week and continued to out-perform the S&P 500 performance by 1.7%. They were up 3.5% out-performing the market by 91.8%. 

This was another awful week from most perspectives, if not all.

The only potential positive spin is that Friday ended up on a negative note, which was probably better than an advance, having come off the previous day’s 300+ point decline.

While most analysts and technicians don’t agree on much, they generally do agree that large gains coming on the heels of large losses don’t have any positive meaning. They prefer to see blow-out kind of declines, sort of like getting it out of your system.

The exception is when the gain represents a “key reversal,” and we all know how well that predictive tool worked out.

That kind of further large decline may be the sort of thing that may be in store on Monday, as markets re-open. That’s especially so since the news of the credit downgrades came after  the European markets closed and they haven’t had a chance to respond.

Further, in the US banks are closed for the Columbus Day holiday and that could present some very short term liquidity issues as equity trading goes on as usual.

In some small way I can look to the dividends received this week, which were more than the usual number, and the ability to rollover some positions despite the weakness, as well as the ability to sell some new covered options, as something akin to a positive note.

Somehow, even with a horrible environment there was an opportunity to get 10 OTP trades in for the week.

However, the relative out-performance of positions is of little solace during a week that saw nothing redeeming, other than a brief move higher after release of the FOMC Statement. I suppose it’s nice to have that kind of relative out-performance, but it’s no replacement for the real thing.

After the past 3 weeks are all said and done, the market is down only about 5%, which puts it at the level of most all of the other periodic declines of the past two years. However, it really, really feels like much more because of all of those large moves heading in both directions, but being increasingly a net negative.

For those watching volatility, you may have noticed that before the late sell-off the volatility was rising more than usual given where the day’s change had stood, reflecting the continuing back and forth during the day. Despite having had some of these periodic mini-corrections greater than our current correction, the volatility is now at a two year high, as the back and forth movement continues to be reminiscent of 2011.

If that continues as we head into net week I would envision spending much more time looking for “DOH” trading opportunities. Once the volatility begins to rise those become more and more appealing and can become a primary source of income.

The downside, however, is that they take much more attention and maintenance, as the ideal DOH Trade is one that lasts only for a day or two and sees the contract sold expire worthless. Otherwise you end up chasing the opportunity to rollover the contract in an attempt to avoid being assigned at a strike price that is below your original cost. If you follow my personal trades that’s what happened with some of those trades today.

The positive aspect of the DOH Trades is that during a prolonged downturn it really makes a big difference to be able to squeeze out some premium, particularly as you are able to use strike prices that are generally 2% or more above the current price at the time of the option contract sale, depending on the number of days of contract duration.

While doing so may be a nuisance, it is the kind of nuisance that has me preferring markets that are down trending.

With less cash than I would like at the current market level and despite what look like so many great values, there has to be hesitance about spending any more of the cash reserve down. Ideally, if doing so, it would be in support of other existing positions, such as you might do in cost averaging down, rather than looking for too many new positions.

Still, I don’t expect to actively look for “deals” next week. It’s generally easier to do that when a particular sector or a particular stock is beaten down. It’s much harder to select what may be ready to bounce back when almost everything has been pummeled, so if the market continues in its current pattern the emphasis will be on beginning to generate revenue from existing positions, even if through the use of strike prices below cost.

There are two caveats to all of the above.

One is that with a market moving lower, new positions are often more appropriately entered through the sale of puts and rolling those over, where appropriate or simply taking assignment. So if considering any new positions the sale of puts may be the way to go.

The second caveat regards the DOH trades. 

With a small number of positions set to expire next week as the monthly cycle concludes, I may consider using some expanded weekly option expirations for some potential DOH trades, rather than very short term trades, particularly if there are also upcoming earnings. That would reduce some of their high maintenance and provide more time for any price blips to even out. An example of that might be Las Vegas Sands, which was a DOH trade today and then reports earnings next week. Ideally, the way to enter into that kind of a trade is during a strong price rise and then using a well out of the money strike whose premium will be enhanced by the earnings event.

Otherwise, for now, you’ll be hearing a lot about moving averages the next week and the risk that it presents at a time when people are fleeing from risk. It means nothing except in hindsight. If the 200 DMA proves to be important, you’ll be hearing about it ad nauseum. If not? That will be the end of its mention, just like the “key reversal” has been relegated to the closet.

While the crowd running from risk and an over-reliance on unvalidated technical indicators may normally represent contrarian opportunities, I’m content to wait to see some stability return first.

That’s far more important than a surge higher that only ends up being another in a string of disappointments.

     

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:   DOW, EMC

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:  DOW (10/31), LVS (10/31), WFM (10/31)

Calls Rolled over, taking profits, into the monthly cycle: none

Calls Rolled Over, taking profits, into a future monthly cycle: BMY (11/22), PBR (11/22)

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  GDX (10/24), LVS (10/10)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  GPS, HAL

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: CHK (10/10 $0.09), CPB (10/8 $0.31), DRI (10/8 $0.55), FCX (10/10 $0.31), GPS (10/6 $0.22)

Ex-dividend Positions Next Week:  none

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, CHK, CLF, COH, FCX, GDX, GM, GPS, HAL, HFC, .JCP, JOY, K,  LULU, LVS, MCP, MOS,  NEM, RIG, SBGI, TGT, 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.



Sep192014

Week in Review – September 15 – 19, 2014

Week in Review

 

Option to Profit Week in Review
September 15 – 19,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
3 / 3 3 2 4  / 0 8  / 0 0

    

Weekly Up to Date Performance

September 15 – 19, 2014

New purchases for the week beat the unadjusted S&P 500 by 0.4% and the adjusted index by 0.6% during a week that had much more potentially critical news events than is meant to be digested over such a short time period.

It was a week of major unknowns and a market that did not really go according to script, other than to start the week off with some efforts to raise cash for Alibaba’s IPO by selling stocks, especially momentum stocks that had performed well year to date.

With all of the uncertainty and all of the potential factors that could have sent the markets much lower, and quickly so, instead it just went right on setting more new closing records.

New positions ended the week 1.7% higher, while the unadjusted S&P 500 was 1.3% higher and the adjusted S&P 500 lagged a little, but still rose 1.0% for the time period.

Performance of closed positions continued to out-perform the S&P 500 performance by 1.7%. They were up 3.6% out-performing the market by 88.1%. 

This was a week that brought surprises every day, when you consider the various potential obstacles that arose during the latter half of the week. The first surprise was the kind of strength that was shown in the early part of the week, especially after Monday’s sell off in momentum names that had compiled lots of gains that could be used for an Alibaba IPO allocation.

Otherwise, the first two challenges provided nothing at all and certainly not any challenges.

Nothing was provided in the FOMC statement, as its wording went unchanged. It was that change, that would have portended interest rate increases sooner than hoped, that worried so many..

All it took was the suggestion by someone who really shouldn’t have any basis to know other than an educated guess that the wording would remain unchanged for the market to run with it.

Then, the Scotland referendum proved to be a non-issue and had no influence on the market at all, as there was so much division over which way the decision would go that the market had been at a stalemate in discounting the result. The only likely result would have been if the referendum approved an independent Scotland. That wasn’t at all factored into the market’s level and could have caused quite a drop, but it wasn’t to be.

Finally, it was time for Alibaba to come to market and despite the nearly 3 hour wait for its first trade and an nearly 50% pop at its trading high, it really did nothing for the markets and it ended up being a really weak day, despite the closing DJIA at another new high.

In fact, while the S&P 500 did gains nicely for the week, not only did it lag the DJIA quite a bit, but the NASDAQ and Russell 2000 really trailed behind.

There were a number of people that boldly predicted that the S&P 500 would top out at the time of the Alibaba IPO and the trading to end the week did nothing to call those predictions into question. Certainly the IPO didn’t propel the market higher, nor did the suggestion that all of the selling on Monday that created cash held back for the IPO find itself going anywhere, other than perhaps Alibaba on the secondary market. 

All in all, this was a very disappointing week, despite the fact that the market could have easily tumbled. Yet, instead it set new records, but you just didn’t hear very many people cheering.

I think that the lack of cheering was due to the realization that for this week, at least, equities were the safest of all worlds, given the concerns over interest rates, currency fluctuations related to Scotland and plummeting precious metal and commodity prices.

Where else are you going to go with your money when everything else appears so shaky?

For me, the disappointment was due to the lack of many trading opportunities, especially rollovers.

However, as Wednesday and Thursday were survived without seeing prices tumble and rollover opportunities lost, the broad weakness on Friday didn’t too anything to help the rollover process along.

A number of the positions expiring were just too expensive to buy back as they were quoted in $0.05 increments. With relatively low premiums in forward weeks that $0.05 required to be paid to buy back those contracts was just too expensive relative to the potential premium received.

That has been a trend lately and while I hate adding to the list of uncovered positions it would be nice to actually have some profit to show for the trouble of a rollover.

Next week doesn’t have anywhere near the amount and intensity of news events on the calendar. But as much as I dislike really quiet news weeks, this past one was just too much with not only the amount of news but its character and how the news came at the markets from all different angles.

While I wasn’t too happy about the trading activity level I was happy to see some assignments occur and the chance to add a little to the cash pile. Getting a few uncovered positions back to work was nice, as well, but the premiums are still far too low and there is some reluctance to  put them at risk for assignment for relatively little in return.

With some recycled cash in hand for next week, which begins the October 2014 cycle, there are already a number of positions set to expire next week and the beginnings of some time diversification as other positions are peppered throughout the coming month. As much as possible I’d like to continue that diversification, but again the primary limiting factor are the very low premiums in forward weeks.

With all of this week’s events out of the way there is now a chance to take a deep breath. It will be especially interesting to see where the market picks up next week, which by comparison would be expected to be a boring one.

Once again, I don’t envision adding too many new positions as trading begins anew. My priority continues to be to find cover for uncovered positions, but that has been an elusive goal and has come in frustratingly low numbers as there has been very little in the way of sustained and broad strength even as the market goes higher.

For now, it’s just good to have survived the events of the past week and to be able to think about what’s still to come.

      

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:   CPB, EBAY, TMUS

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: FAST, PBR

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  BMY (10/10), BX (10/31), GM (10/3)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned:  C, CCL, COH, PFE

Calls Expired:  CHK, EBAY, FAST, GM, HFC, K, SBGI, SBGI

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: LVS (9/18 $0.50
)

Ex-dividend Positions Next Week:  CY (9/23 $0.11), WFM (9/24 $0.12)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, CHK, CLF, COH, EBAY, FCX, GM, HFC, JCP, K,  LULU, LVS, MCP, MOS,  NEM, PFE, RIG, SBGI, TGT, 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.



Sep122014

Week in Review – September 8 – 12, 2014

Week in Review

 

Option to Profit Week in Review
September 8 – 12,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
4 / 4 0 5 3  / 0 2  / 0 0

    

Weekly Up to Date Performance

September 8 – 12, 2014

New purchases for the week beat the unadjusted S&P 500 by 1.6% and the adjusted index by 1.4% during a week that the market made some wonder whether another of the mini-corrections was being heralded.

As usual, those weeks marked by weakness tend to have the performance of new positions exceed that of the market in general, as the premiums act as a cushion to the declines, even when those declines are severe.

It was a week of little news and little reason to believe that the market would go decisively in either direction, but certainly more reason to be skeptical of it continuing to reach new closing highs, as the market, after a listless performance last week seemed to set itself up in September as a reversal of a very strong August.

While new positions did well, those with exposure to metals and energy followed the market in its decline for the week as commodities were very weak.

Performance of closed positions continued to out-perform the S&P 500 performance by 1.7%. They were up 3.6% out-performing the market by 91.9%. 

Last week the big news was the tragic death of a comedian, while this week the spotlight was shared by an abusive football player and the unveiling of new Apple products.

At least next week has an FOMC statement and even a Federal Reserve Chairperson press conference.

But this was another week where there wasn’t much materially to move the markets, other than perhaps some jobless statistics. Those initially moved the market and were taken far more seriously than were the prior week’s Employment Situation numbers that were essentially written off as being in error.

Otherwise, there was nothing this week that really could have accounted for the weakness that prevailed all throughout the week. Maybe it was simply an issue of everyone being in a bad mood from having returned from their beach homes.

With only four new purchases for the week, including one late in the day on Friday, I feel fortunate to be able to see three positions get assigned and having been able to roll over 5 positions. Much of that good luck was thanks to the market’s comeback from deeper losses on Thursday, but unfortunately that momentum couldn’t be continued to end the week. Although rolling over early tends to cost more, despite being offset by the additional day’s worth of premium received on the sale side, it’s often far better to make those trades when there is opportunity, because you never know what tomorrow will bring.

And today was tomorrow and we all know how that went.

Of course, even with some good news, that still left two positions expired and without cover to add to that list and there were no new covered positions created during a week that essentially only saw downward pressure.

On another positive note, there was some ability to bypass next week’s monthly cycle ending when rolling over most of the positions this week, creating a little bit of diversification by time. Not much, but a little.

As volatility did increase this week that provided some of that opportunity to look forward in time a little, rather than being so heavily weighted with expirations on a single day. Most of us have seen how quickly a market can turn, even if just for a day, so it’s better not to have all of those positions exposed to one of those kind of days.

Next week Wednesday, for example, could be one of those days, as there’s lots of speculation that some of the wording of the FOMC statement could be changed, indicating an earlier start to the rise in interest rates.

That’s something to keep in mind, especially for those positions that do have extended weekly options available to be traded, thereby possibly avoiding any unpleasant surprises.

As if that’s not enough the very next date we may know the fates of Scotland and England, which could have some surprises awaiting us, at least in the short term.

Beyond that, there’s also the matter of the much anticipated IPO of Ali Baba which should suck lots of liquidity out of the market, as it is probably likely that lots of money will be chasing that position that may have otherwise gone elsewhere.

With cash at a fairly low level I don’t expect to do too much new position buying next week, although admittedly, some prices do look enticing, including all three of the positions assigned this week and a number of others that have been regular parts of the portfolio in the past.

Still, despite this really poorly performing week, the market isn’t even down by 2% from its recent August highs.

If the past is any indicator, we could still be at risk for about another 3% on the downside if this is another of those mini-corrections in the marking.

That is another reason why I may not be rushing in to spend down whatever cash is available.

In other words?

Relax and enjoy the weekend, because next week may be interesting.

 



 

     

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:   BP, CY, EBAY, WFM

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle:  HAL (9/26), IP (9/26), LVS (9/26), WFM (9/26)

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:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned:  BP, WAG

Calls Expired:  BX, EBAY

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: GMOH (9/8 $0.30), NEM (9/9 $0.025)

Ex-dividend Positions Next Week:  LVS (9/18 $0.50)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, BX, CHK, CLF, COH, FCX, GM, JCP, LULU, LVS, MCP, MOS,  NEM, RIG, TGT, 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.



Sep52014

Week in Review – September 1 – 5, 2014

Week in Review

 

Option to Profit Week in Review
September 1 – 5,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
7 / 7 2 4 3  / 0 0  / 0 0

    

Weekly Up to Date Performance

September 1 – 5, 2014

< strong>New purchases for the week beat the unadjusted S&P 500 by 1.4% and the adjusted index by the same 1.4% during a week that the market almost broke its string of consecutive weekly gains, until it pulled a rabbit out of its hat on Friday afternoon.

It was a week that the market was essentially unresponsive to anything going on, even showing no response to disappointing employment statistics and yawning at news of a peace accord between Ukraine and whoever is representing the other side.

While the news of a peace pact should have sent the market higher, as fears of conflict sent markets strongly lower, the news of the employment statistics could have taken the markets in either direction, depending on whether it’s taken as good news or bad. Given that the Federal Reserve is pretty much done with Quantitative Easing and isn’t likely to intervene unless there is some real systemic problem, the disappointing numbers should have been received in a negative manner.

But they weren’t.

Still, with Friday’s late gain the market managed another in a week of 5 successive weekly finishes higher.

Performance of closed positions continued to out-perform the S&P 500 performance by 1.7%. They were up 3.6% out-performing the market by 89.4%. 

It was a much busier trading week for new positions than I had expected it to be, as the week ended up closing almost precisely where it had started.

That’s usually a good thing for new positions and this week was a good reflection of that kind of market behavior.

I like weeks when there is a mix of assignments and rollovers, but would have been happier had there been more new covered posit
ions sold. When weeks are flat those latter opportunities  don’t pop up very often.

Despite hitting another new closing high and despite the seeming geo-political peace in Ukraine and despite the EU looking as if it may undertake some more market friendly actions, no one is ebulliently bullish.

Maybe that’s a good contra-indicator.

Barry Ritholtz, a very well respected market analyst and investment advisor believes that the news that CNBC viewership is at all time lows is a contrarian sign suggesting the market is poised for even further runs higher.

Based on this morning’s disappointing Employment Situation Report numbers, it may also mean that people who can’t find employment may be willing to give up their basic cable subscriptions before they give up their smartphones.

While Ritholtz interprets the news as a bullish indicator it does question whether any of that fabled money on the sidelines will then ever find its way into the markets helping to propel it even higher. On the other hand, maybe we don’t want that money to chase stocks because that may be the ultimate kiss of death.

While I would love to see some sanity return to the markets, I’m not quite ready for that kiss of death and would prefer to find myself complaining about the climb higher and the ever decreasing level of volatility.

Next week will be helped by having some assignment generated cash for recycling, but the week also starts at a cash level lower than this week had started with, due to the buying spree, so I don’t think that I’ll be chasing stocks, either, especially with the market not really having taken any kind of meaningful rest.

With a number of positions set to expire next week and the same for the following week, which also happens to be the end of the monthly cycle, there is flexibility in terms of what kind of option time frames to use for any new purchases, as there are invariably new positions, even when not in the mood to chase after anything.

At the moment, my guess would be that I would still be looking at the weekly expirations, as those forward week premiums are still just so incredibly low. Looking at premiums for such stocks as General Electric and Pfizer you realize just how far those premiums have fallen, but as history shows it won’t always be that way.

I would, however, be more than happy to see the market continue on a path higher, especially if it is the slow and grinding type or the type that simply has lots of daily back and forth. Even in a low volatility environment those are the best kind of weeks to operate within.

This week was a good example of that, particularly if you can throw some dividends into the mix.

Hopefully next week will be some more of the same.

 

      

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:   BP, COH, GM, INTC, LVS, TMUS, WFM

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  EBAY, LVS, TMUS

Calls Rolled over, taking profits, into extended weekly cycle:  none

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

Calls Rolled Over, taking profits, into a future monthly cycle: none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  IP, PFE

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned:  BP, INTC, WFM

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: COH (9/5 $0.34), MOS (9/2 $0.25)

Ex-dividend Positions Next Week:  GM (9/8 $0.30), NEM (9/9 $0.25)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, CHK, CLF, COH, FCX, JCP, LULU, LVS, MCP, MOS,  NEM, PFE, RIG, TGT, 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.