| NEW POSITIONS/STO | NEW STO | ROLLOVERS | CALLS ASSIGNED/PUTS EXPIRED | CALLS EXPIRED/PUTS ASSIGNED | CLOSED |
| 2 / 2 | 0 | 6 | 0 / 0 | 1 / 0 | 1 |
Weekly Up to Date Performance
January 26 – 30, 2015
After a respite from decidedly negative weeks last week, we were back to the 2015 new normal this week.
The two new positions opened this week, which were the same as opened the week before, badly trailed even a very weak market as technology and interest rate sensitive stocks were pariahs, even though that was pretty much the case for all sectors.
Those new positions ended the week 4.3% lower. Despite the overall market being 2.7% lower, they still trailed by 1.6% on both adjusted and unadjusted bases.
However, as was the case for all of the weeks in January except for last week in which the market rose, existing positions again outperformed the market by 1.4%, but were still 1.4% lower for the week.
That’s a small consolation, but is one of the things that you’re supposed to see. That is, in a down market, the losses aren’t as great, just as in an up market the gains may not be as great.
With one closed position for the week, thus far the positions closed in 2015 were 4.5% higher, while the comparable time adjusted S&P 500 performance was 1.9% higher. That 2.5% difference represents a 135.3% performance differential that is very unlikely to be maintained through the year and is skewed by having closed some longer term positions, such as LuLuLemon and Blackstone.
If you were among those waiting for the fabled “January Effect” that many of us were brought up on believing was sacrosanct, you can wait another year, as this January was like those of the recent past few years and did little to provide a sense of optimism going forward.
What this January did present was a glimpse of what volatility is like, especially if looking at market moves since hitting its highs at the very end of 2014.
Since that time we have had a quadruple bottom. There have been lots of days with gap up and gap down moves and lots of days with large intra-day reversals.
The preponderance of those moves has been to bring the market about 4% lower, despite the substantial trimming of losses late in the day on Friday.
Oh wait.
That substantial trimming of losses was itself reversed in the final hour of trading.
But that volatility isn’t being restricted to the stock market. Treasuries, precious metals and currencies are all bouncing around all over the place.
You can add oil into that mix, as well, as it was a strong move higher late in the day on Friday, for no yet known reason that took the market on its reverse course, as it had been propped up earlier in the day only through the performance of Visa in the DJIA, which is a uniquely weighted index such that a given percentage move in a high priced stock like VIsa has a greater impact on the index than an identical percentage move in something priced much lower, such as General Electric.
In fact, a 4% rise in shares of Visa would add about 65 points to the DJIA, while the same percentage move in GE would add only 6 points, despite GE having a market capitalization that is almost 70% greater than that of Visa.
Go figure.
But as bad as the DJIA looked today, it would have been much worse without Visa today, but even with its help the DJIA lagged the S&P 500 as the latter is more heavily weighted by energy stocks, which did well in the final 90 minutes of trading.
Just not well enough.
This was a week that I was optimistic enough to think that all of the positions set to expire on Friday had a chance of being assigned.
How quickly that changed.
Luckily, there were opportunities to get some rollovers done and to close out the Blackstone position, as there was little to be gained by hanging around for its earnings report and waiting another 3 weeks for expiration.
On the positive side closing out the Blackstone position added some money to cash reserves, but on the negative side, that was it for the week.
With cash reserves very low I don’t anticipate much in the way of opening new positions next week, although lately there haven’t been many more than two or three new positions, anyway.
With some positions set to expire next week, if any new positions are opened they will be done trying to gauge the likelihood of seeing those existing positions get assigned. If they look as if they could get assigned then I would probably try to open new positions and sell expanded weekly options on them, expiring February 13, rather than next Friday.
However, if those positions look out of reach I would likely consider selling weekly contracts on any new positions.
Again, as last week, I’d love to be able to sell some new call contracts on existing positions but hope that I have better luck with that this coming week than was the case this past week.
Hopefully, with the psychological performance pressure of January now a thing of the past, February will be able to get on with just being a normal month, but it would be great to see this volatility continue, as long as the net result wasn’t the same as in January.
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: INTC, MET
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: GDX ($20), GPS, HAL
Calls Rolled over, taking profits, into extended weekly cycle: GDX ($20)
Calls Rolled over, taking profits, into the monthly cycle: MET
Calls Rolled Over, taking profits, into a future monthly cycle: GDX (March 2015, $22.50)
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: none
Calls Expired: INTC, MET
Puts Assigned: none
Stock positions Closed to take profits: BX
Stock positions Closed to take losses: none
Calls Closed to Take Profits: none
Ex-dividend Positions: FAST (1/28 $0.28)
Ex-dividend Positions Next Week: INTC (2/4 $0.22), MET (2/4 $0.35)
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, .INTC, 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.