Update: February 8, 2016

| February 8, 2016

February 8, 2016


Portfolio Update

We can’t seem to break the bear market environment we’ve been in for most of this year.  Investors don’t seem at all ready to get back into stocks (or most other asset classes for that matter).  And, volatility has either been increasing or holding steady for the past several weeks.

In terms of the damage, the S&P 500 is down 10% for the year while the Dow Jones Industrials are down 9%.  Small caps have been hit even harder with the Russell 2000 down 15%.  And, the Nasdaq 100 is down almost 15% as well after a rough past few days.

Meanwhile, crude oil is down over 20% year-to-date leading many other commodities into the red.  One of the few beneficiaries has been gold, which is actually up over 12% for the year.  It looks like gold is once again acting like a safe-haven investment for spooked investors.  Finally, volatility is having a huge year with the VIX up over 40%.

The markets have mostly been taking their cue from oil, although Asian markets are also factors.  The recent Nasdaq hit is a sign that momentum stocks are also out of favor.  It didn’t help that Apple (AAPL) and Amazon (AMZN) earnings came in worse than expected.

It’s definitely been a tough market to trade, but we’ll keep mixing up our trades and trying different strategies.  While volatility is this high, I’ll be looking at a very cautious theme next week.

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 – We may have missed the boat on PCG, but things are looking a lot brighter with XEL. Of course, it helps that we took the call side on this utility. It seems utilities are getting the safe-haven treatment this time around, which is certainly good news for us.  Peak gains so far in the first week of trade are 45%.


  • First Solar (FSLR) March 75 Calls – The Nasdaq is getting creamed lately, but FSLR has held up relatively well. With much of the industry getting clobbered, it’s a very good sign for us that these shares are maintaining value. If the market finally turns around (hopefully), we’ll see a big boost in this stock.


  • Gilead Sciences (GILD) March 100 Calls – Unlike FSLR, the Nasdaq selloff unfortunately took its toll on GILD. I really like this company longer-term, but there are too many headwinds in biotech right now.  We’ll revisit this one again in a few weeks or months.  For now, everyone should be stopped out of this position.


Category: AOA Updates