|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|0 / 0||6||0||0 / 0||4 / 0||0|
Weekly Up to Date Performance
October 13 – 17, 2014
For the very first time in years, there were no new purchases executed this week as despite a nearly 300 point DJIA gain on Friday, the broader S&P 500 ended the week 1.0% lower.
It was a week of little news other than some reasonably good earnings from financials and some industrials and those seemed to be more important than fixating on moving averages.
With a second consecutive week of 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%.
With Thursday’s decent showing and ability to hold onto some broader gains and then Friday’s surge, how exactly do you describe this past week, and more importantly, what does it say abou
t what’s to come?
While we came close to that magical 10% threshold in order to call this whole past 4 weeks an official correction, we didn’t quite get there before some bargain hunters started picking up shares.
On the one hand the market did breach that 200 day moving average that so many were concerned about but still remains quite a bit below that level.
Of some additional concern should be that these kind of very pronounced moves higher, and we’ve now had a series of them over the past 4 weeks, are almost always encountered during a downtrend and are usually not associated with market upturns.
What has also been very clear is that every buying opportunity over the past 4 weeks, with possibly the exception of what in hindsight may turn out to have been the market downturn nadir, occurring on Thursday, have instead proven opportunities to lose money.
So while I’m very happy to have again seen the portfolio outperform the market this week, which was still another down week for the market, despite Friday’s showing, there are still challenges ahead. This week, though, while beating the market in relative terms, also had the added bonus of actually seeing assets grow in value.
While existing positions outperformed the overall market by a very high 1.7%, it was actually 0.6% higher for the week and was so without any particular outliers artificially driving performance.
But, I’m still left wary for the upcoming week.
Part of that wariness also includes the fade in energy sector prices on Friday, as those really need to be shored up for overall market strength. Markets rarely move higher without strength in both financials and energy. They’re both reflective of actively rowing economies.
Another concern has to do precisely with what caused optimism yesterday. That was the very strong showing in the Russell Index, which tracks smaller cap stocks and had already been in significant correction. Instead, today the Russell also faded the rally and turned negative with 2 hours of trading remaining.
But at least the week saw some, albeit only a handful of “DOH” trades, capitalizing a little on the increased volatility and better premiums. While not much they, at least produced something, although as is always the case with DOH trades they do need closer observation, as assignment isn’t the preferred outcome.
The guideline that I used this past week for those DOH Trades was to get about a 0.5-1% premium in return for selecting a weekly strike price anywhere from 5-10% out of the money. Those were the kind of returns that haven’t been seen in quite a while.
This coming week I would like to look for more opportunities, but also may find some chances to sell calls on some of the monthly positions expiring today. Ideally, either of those opportunities would be best during another price surge, but sometimes anything will do, to a point.
Once again, I don’t anticipate many new purchases n
ext week, although I may be tempted to do some, but wouldn’t want to get sucked in. I hope next week is actually one of milder moves in either direction, or ideally in both directions.
For now, it’s just time to forget about a week that adding little to anything, even if avoiding bad outcomes.
Maybe that’s enough for now, but not a very good goal, in general.
(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: none
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: CHK (10/24), LVS (10/24), JOY (10/24), SBGI (12/20)
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold
Calls Assigned: none
Calls Expired: CPB, CY, FAST, TMUS
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 (10/22 $0.25)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, CLF, COH, CPB, CY, FAST, FCX, GDX, GM, GPS, HAL, HFC, .JCP, K, LULU, 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.