Update: April 18, 2016

| April 18, 2016

April 18, 2016

 

Portfolio Update

The stock market is finally acting like it’s a bull market – or at least a bullish to neutral market.  Stocks may be a bit overbought (based on valuations) but it’s nothing too egregious.  More importantly, the major indices are finally positive on the year (for the most part).  Volatility is also way down on the year.

With investors developing a bit of complacency, we’re finally seeing money slowly pour back into stocks.  The S&P 500 is now up 3% on the year (after being down about 10% in mid-February).  Small caps have finally gotten bid as well (a good sign of a bull market trend), with the Russell 2000 now positive on the year.

In the meantime, crude oil continues to be all over the place.  Crude is sitting at over $40 a barrel but briefly dropped to about $38 when OPEC decided not to freeze production this weekend.  It’s down over 4% on the year – but could remain at current levels or above as the US glut in inventory is finally showing signs of abating.

The top performing commodities on the year are gold and silver.  Gold’s up 16%, while silver is up over 17%.  Concerns over currency fluctuations, interest rates, and political instability have pushed investors into precious metals.  Bonds are also doing well this year, suggesting there’s still a certain amount of fear lingering among big investors.

Let’s take a look at some portfolio highlights…

 

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.

  • Citigroup (C) June 42.50 Calls – Our theme from last week has paid off in a big way, with banks doing better than expected after earnings. The price of C jumped all the way to just below our aggressive profit-taking point.  Conservative investors should already have exited.  Peak gains so far are 187%.

 

  • JP Morgan Chase (JPM) June 60 Calls – JPM also got a huge boost after earnings and hit our conservative exit point. It hasn’t even been a week since the trade and peak gains are already at 178%.

 

  • Cheniere Energy (LNG) June 35 Calls – LNG got a decent bump in price last week, although it’s pulled back a bit since then. The spike was good enough to hit our conservative profit-taking point.  Highs so far in this position have resulted in 88% gains.

 

Category: AOA Updates

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