Update: December 8, 2014

| December 8, 2014

December 8, 2014

 

Portfolio Update

The two biggest trends over the last couple weeks have been US equity indices moving higher and crude oil declining even farther. The S&P 500 and Dow Jones Industrial Average have been setting record highs, with the only real problem sector being energy.

Of course, energy stocks have been hit hard as plunging oil has widespread implications. Shale oil, deep sea drillers, and alternative energy stocks have been feeling the brunt of the decline. Although, just about anything oil related has taken it on the chin with oil hitting $63 a barrel today.

On the bright side, cheap crude oil is generally good news for the global economy. Lower oil costs typically translate into greater consumer spending over time. With oil in the $60-$70 range, gasoline prices should continue to decline – and at a very good time for retail companies.

Economic news has been very good once again. The biggest positive came from the November jobs report. New jobs increased by 321,000, well over the 225,000 or so expected by analysts. With wage growth also improving, the report was one of the best ones we’ve seen in some time for the US labor market.

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.

  • Teekay (TK) January 50 Calls – We had an excellent first week from TK, although it pulled back sharply today. Almost immediately after our trade, TK shot up above $50, almost hitting our conservative exit point. At their peak, our calls were 95% winners. While the shares are back down to where we got in, we have until January expiration, and TK obviously has plenty of upside.

 

  • CH Robinson (CHRW) January 70 Calls – Our long retail trades continue to perform admirably. CHRW has now hit our aggressive exit level for profit taking, so everyone should be out of this trade. The calls have been as much as 238% winners for us!

 

  • com (AMZN) January 360 Calls – AMZN (and UNP to some extent) are good examples of why we use conservative and aggressive risk control points in this service. Both of those options were very expensive (relative to this service), and conservative traders were able to exit while conserving capital. Meanwhile, aggressive traders can wait out the volatility. AMZN in particular can be quite volatile, so setting key exit points can be vital to making successful trades. Conservative traders should now be out of both AMZN and UNP.

 

Category: AOA Updates