Update: April 14, 2014

| April 14, 2014

April 14, 2014


Portfolio Update

It’s been an interesting couple weeks in the US equities markets.  Most notably, the Nasdaq has gotten hit hard as investors rotate out of Internet and biotech stocks.  Basically, it looks like investors want to take off some risk heading into Q2.

There aren’t any definitive reasons behind this risk-averse behavior.  Yes, there’s definitely heightened geopolitical risk these days, especially with the Ukraine situation.  However, the domestic economy is looking as good as it’s been in years.

In fact, the US economy could finally be shifting gears from moderate growth to above average growth.  The job market appears to be returning to pre-recession levels – at least in terms of private jobs.  And, this week’s retail sales numbers showed a significant increase in consumer spending.

Nevertheless, investors are looking for safer stocks.  At least part of that is standard asset allocation/portfolio management.  That is, those who made a ton of money off of stocks last year want to capture the gains in the big winners and move into different, previously weaker-performing sectors and assets.

We’ve officially begun earnings season for Q2, so there should be plenty of action in individual stocks for the next few weeks.  As always, earnings present ample trading opportunities.  With our next trade theme, we may seek to advantage of the new earnings season.

Let’s take a look at some of the big winners in our portfolio over the last week or so.


Portfolio Highlights

Just a quick note:  We won’t update every open position every update.  I try to focus on the positions that have some significant news or price movement.

  • Exelon (EXC) July $29 Calls – Exelon rocketed higher in the last two weeks, basically going straight up.  We’ve actually breached our sell point for aggressive traders, so we can close the book on this position.  The flight to safety really benefitted our calls.  In fact, at the peak, our calls gained an impressive 344%!


  • Deere & Company (DE) June $90 Calls – Another stock that’s done well with the recent action is DE.  Deere is a safe company with a dividend, so not a huge surprise it’s thrived in this kind of environment.  The stock has also traded above our exit level for aggressive traders.  As such, everyone should be out of this trade by now.  The DE calls topped out at 137% gains.


  • 3D Systems (DDD) May $50 Puts – Finally, we have one more trade that’s performed extremely well with the recent selloff in tech stocks.  DDD was a stock we felt was very frothy, so it makes sense that investors exited in droves last week.  The shares dropped below our aggressive trader profit-taking level, so we can close this one as well.  The peak gain on these puts was 177%.


Category: AOA Updates