Update: January 26, 2015

January 26, 2015

 

Portfolio Update

US equities still appear to be stuck in a range for the time being, although the range is quite large. The top and bottom of the S&P 500’s current channel are far enough apart that volatility remains at a higher level than we’re used to in recent years.

The focus on the financial markets continues to be on Europe and oil. Crude oil has spent most of the month of January below $50, and slowly appears to be settling in around $45. Based on the data, it could be quite some time before oil posts a significant price increase – and that’s good news for consumers.

The biggest concern for US investors at the moment is Europe. Greece had key elections this week, and we’ll have to see if a change of leadership will spook the markets. The Swiss roiled the currency markets by removing the Swiss Franc from its Euro peg. That situation also bears watching.

There’s going to be a lot of data in the US this week. It’s a big earnings week, the Fed is meeting, and other key economic info is being released. It could be an interesting week for US stocks, so be sure to stay tuned.

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.

• iShares MSCI Emerging Markets (EEM) June 40 Calls – Our EEM trade got off to a nice start. The stock shot up the first two days after our trade and is now sitting comfortably above $40. The next stop is likely around $41.50. This trade has already been as high as a 52% winner.

 

• Intel (INTC) March 36 Calls – INTC has been trading in a range lately, but it could be consolidating. There’s plenty of support beneath the current price, so the next big move is likely going to be higher. Overall, the trade has been a decent one for us, with a peak return of 44% so far.

 

• Southern Company (SO) May 50 Puts – SO has done the opposite of what we wanted so far (go up), but it looks like it may have hit resistance – and could be headed back down soon. Fortunately, we haven’t hit our exit point yet (for risk control), so everyone is still in the game. Don’t forget, we have tons of time on these May options.

 

Category: AOA Updates