Update: April 6, 2015

April 6, 2015

 

Portfolio Update

US equities are stuck in a sideways trading range.  However, the range has narrowed quite a bit over the past month.  This could suggest a breakout is going to occur (one way or another).  The S&P 500 is only up about 1% on the year.  However, Nasdaq stocks are up about 2%, and small caps up around 4.5%.

In other words, there’s money to be made in equities, but it looks like a stock picker’s market.

As I said in the last update, stocks will probably continue to be range bound until the crowd gets some indication of when interest rates are going up.  As of now, it doesn’t seem like a rate hike is going to occur in the near future.  It may not even happen in 2015.

The biggest economic news of import lately was the March jobs report released last week.  The number came in far weaker than expected, but it could be an anomaly.  Forward looking data (jobless claims) looked very positive for the job market.  We’ll have to see what other jobs info becomes available in the coming weeks.

Besides economic news, market moving news could start coming in with the beginning of first quarter earnings reports.  Analysts will be closely watching guidance numbers from a number of key industries.

Now, let’s take a look at the 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.

• Groupon (GRPN) May 8 Puts – GRPN dropped down sharply to the 200-day moving average last week on broad market weakness. The big down moved reached our profit-taking exit point for conservative traders.  The trade has been a 60% winner so far, with aggressive traders still in the game.

 

• General Cable (BGC) May 15 Calls – BGC continues to slowly climb upward after the sharp move higher. That’s good news.  It’s encouraging to see the stock hold the gains after the jump.  Aggressive traders still have over a month for the stock to reach the next exit point.

 

• Micron Technologies (MU) July 30 Calls – MU sold off immediately after earnings, despite the good news. It may have been profit taking driving the selloff.  However, it was enough of a down move to hit the risk-control exit point for conservative traders.  However, since the brief selloff, MU has mostly moved higher.  With these being July calls, there’s plenty of time for those still in the position to turn a profit.

 

Category: AOA Updates