Update: February 22, 2016

| February 22, 2016

February 22, 2016


Portfolio Update

It took almost a month and half from the start of the year, but investors are finally starting to calm down and buy stocks.  That’s not to say we’re out of the woods just yet.  But, at least volatility is back down to more reasonable levels.  In fact, VIX is below $20 for the first time since early January.

The S&P 500 is still down around 5% for the year, but it has gained 5% over the last week and 3.5% over the last month.  For the year, the Nasdaq 100 is down 8%, the Russell 2000 is down 10%, and the Dow Industrials are off about 4%.  Those numbers are not good, but at least we’re well off the lows of the year.

Meanwhile, crude oil is down over 17% year-to-date, which is significantly better than where it was just a couple weeks ago.  Crude is trading at about $33 a barrel from a low in the mid 20s.  It seems oil investors have come to their senses a little bit.  The crash in oil prices was hitting ridiculous levels even for oil bears.

The US economy has helped out the markets by showing some recent strength.  Most recently, industrial production numbers substantially beat estimates – a positive surprise to many.  Retail sales also improved last month and could be a very good forward-looking sign (if consumers keep up the spending).

It’s a somewhat tough market to trade.  On one hand, we want to be cautious given what’s happened this year.  On the other hand, we don’t want to miss the pop on some of these cheap names.  Next theme is probably going to be a mix of caution and high upside trades.

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.

  • Xcel Energy (XEL) June 40 Calls – XEL has proven resilient so far and is sitting right below $40 a share. Even with the big run in January, this stock has plenty of upside left. We also have until June for this position to play out fully.  Peak gains so far are 55%.


  • Colgate-Palmolive (CL) May 67.5 Calls – We had a nice first week from our CL calls, which have already crossed above $68 (albeit briefly). If the stock can break the current resistance level, it will be well on its way to setting new 52-week highs.  Peak gains so far are 48%.


  • First Solar (FSLR) March 75 Calls – FSLR shares took a spill on a brief selloff about a week ago, but it was very short-lived. The stock has bounced back nicely and still has a chance to hit our profit-taking points.  If you didn’t close your position on the one-day selloff, I encourage you to hold on to this position a bit longer to see what develops from here.


Category: AOA Updates

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