Week in Review – August 10 – 14, 2015


Option to Profit

Week in Review


August 10 – 14, 2015


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Weekly Up to Date Performance

August 10 – 14, 2015

It was another strange weak that seemed to be dependent on what China was thinking, but at least this one didn’t end with another horrific Friday.

The market was still simply a continuation of that weekly back and forth pattern that has been the rule for the summer. This week, though it was that way intra-week, as well.

We saw big swings from day to day, as well as from morning to afternoon.

The week ended up not doing much on a net basis, but at least there was some opportunity to get some trading done.

There was only one new position opened this week, but that has become more the norm than the exception.

That position out-performed the unadjusted S&P 500 by 1.4% and unadjusted S&P 500 by 2.7%.

That new position was 2.0% higher for the week while the unadjusted S&P 500 was 0.7% higher for the week and the adjusted S&P 500 was 0.6% lower.

Energy and materials moderated a little this week, but retail sales are looking fairly weak, as those earnings started getting reported over the past ew days and will continue next week.

 With no assignments once again,  the 46 closed lots in 2015 continue to outperform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That difference represents a 283.3% performance differential.

This was another week that was very hard to characterize..

It wasn’t as bad as last week when we saw earnings devastate some invincible seeming stocks, but it was a week that showed just how much we are tied to unpredictable events in China.

What is a little concerning is that whenever an economy is in need of central bank intervention, it’s always a little bit of a crap shoot. You never really know whether the economy is going to respond in a text book sort of way. But it does help to have had an institutional history with taking bold steps.

In the case of China, they’re pretty new at this capitalism game and they don’t necessarily have the same depth of experience in managing events.

The manner in which they devalued their currency on three occasions this week, with rushing in to support it sandwiched in between, may indicate a decision process that isn’t necessarily based on anything but a seat by the pants approach.

That may have also been the case a few weeks ago when it took some steps to bring their plummeting stock markets under control, as well.

What you can really understand is why Jack Ma, the founder of Ali Baba was more than happy to have his company listed on the NYSE, rather than back home and why he is very much in a diversifying of assets mode, especially looking for assets outside of China.

From a positive perspective the market once again respected its sup[port levels and it seems that what we had gotten used to as the new age kind of correction at levels 5% below the highs is now becoming something more like 3.5%.

We haven’t been able to get a 5% mini-correction now for a few months, but we have had a number of those even smaller 3.5% corrections.

With Friday’s close higher the S&P 500 is now just 2% below its all time highs as it made a sudden turnaround at about noon on Wednesday, when it looked as if the 5% level might finally be reached.

This past week was another with no assignments and no opportunity to replenish cash. As I discussed last week I was willing to dip into a personal form of margin by investing funds that I typically keep separate from that followed in the OTP portfolio. However, closing out the Texas Instruments position made that unnecessary this week.

It may, however, be necessary this coming week.

Otherwise, it was a reasonably good week, with one uncovered position getting a new call written, four rollovers and 2 ex-dividend positions.

Next week brings the end of the August 2015 monthly cycle. While I have a number of positions set to expire next week, a few of them are not likely to get rolled over, much less assigned. There is, though, some decent chance for some others to be assigned, so I’m hopeful that the upbeat market of the latter half of this week persists into the next week.

Of course that would require continuing to close the day with gains and it has been difficult stringing those kind of days together lately.

While there’s not too much economic news scheduled for next week, there will still be retail earnings and whatever surprises China may still have for us.

I can’t wait.

And by that I mean I can wait and would like to see a nice non-eventful week and one with few, if any, surprises

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:   IP

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: ANF, INTC, IP

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 cyclenone

New STO:  BBY (8/21), EMC (10/16)

Put contracts expired: none

Put contracts rolled over: TWTR (1/15/16)

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  WY

Puts Assigned:  none

Stock positions Closed to take profits:  TXN

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend PositionsAZN (8/12 $0.45), IP (8/12 $0.40)

Ex-dividend Positions Next Week: MRO (8/17 $0.21)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, FCX, GDX, GM, GPS, HAL, INTC, JCP, JOY, KMI, KSS, LVS,  MCPIQ, MOS, RIG, WFM, WLTGQ (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.