Update: December 22, 2014

December 22, 2014

 

Portfolio Update

It’s officially the holidays, and many investment professionals will be taking the next two weeks off. That means the markets are likely to be quiet. There may be some movement overall, but only because volume should be extremely light.

Heading into the New Year, the main focus should continue to be on the crash of crude oil and the collateral effects. With the price of crude sitting around $55 per barrel, it’s going to be interesting to see if investors believe a bottom is near. Energy investors are certainly hoping that’s the case.

In the meantime, the economy is doing quite well, and consumers should have additional money to spend over the coming months due to cheap gasoline. Domestically, there’s isn’t a whole lot to worry about.

The same can’t be said for overseas markets with Europe, Japan, China, and especially Russia all trying to figure out how to stimulate their economies. Russia’s problems are in a large part related to the plunge of crude oil prices, while the other regions should benefit overall from cheap fuel.

It will be interesting to see what 2015 brings. On that note, we’re going to wrap up for the year. We won’t have a new theme next Monday. But, we’ll kick things off with new trades on January 5^th. Have a great holiday season and congratulations on a great year of trading!

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.

• Exxon Mobil (XOM) February 90 Calls – Well, we pretty much nailed the long-oil trade. XOM has already shot past our first exit point and is closing in on the aggressive exit. The trade’s already a 113% winner in just a week! Conservative traders should be out, and aggressive traders can hold to $96.

 

• Noble Energy (NBL) January 42.50 Puts – The flip side of our successful long-oil trade is that even drillers moved higher last week. As such, conservative traders have already been stopped out of this trade. NBL was somewhat of a hedge for us, there to counter the risk of an unexpected reversal in crude below $50 a barrel. Aggressive traders can still hold the puts as a hedge against our two successful long-oil positions.

 

• Walgreen (WAG) January 67.50 Calls – WAG has been a huge success for us, with the stock shooting higher over the past week or so. We’ve hit both our conservative and aggressive profit taking points, so everyone should be out of this trade (as a winner). At the peak, this position earned 288% profits!

 

Category: AOA Updates