Update: July 21, 2014

| July 21, 2014

July 21, 2014


Portfolio Update

Stocks have cooled somewhat over the last couple weeks but are still trading near record highs. The S&P 500 is up 8% year-to-date and about 1.25% over the last month. Meanwhile, small caps stocks have gotten hit pretty hard lately and are now down about a percent on the year.

The drop in small caps was mostly brought on by Yellen and the Fed. The Fed Chair told the Senate Banking Committee that small caps, biotechs, and social media stocks were overvalued. It’s apparently a way for the Fed to attempt to cool certain bubble-like sectors without spooking the overall market.

The biggest news lately has been related to international events. Of course, the world is in shock over another Malaysian Airline crisis. This time, a plane was shot down over Ukraine, and tensions between the West and Russia are escalating quickly.

Tensions between Israel and Palestine have also blown up into full-blown military conflict. Conflicts in the Middle East are always touchy and could keep a floor on oil prices for the time being.

In the meantime, the economic situation at home continues to look strong. In particular, the job market is getting stronger and stronger as unemployment numbers steadily improve. The next big step will be to see if wages can finally start to climb.

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.

  • Verizon (VZ) August $47 Calls – VZ shares have exploded higher and are nearing are exit point for aggressive traders. For those of you holding the VZ calls, we’ve been up as much as 300%! Expiration is this month, but pretty much no matter where you exit, this trade has been a complete success.


  • Potash (POT) September $38 Puts – We bought September puts in POT to give this trade plenty of time to work. Looks like we didn’t need that extra time! The stock has pulled back substantially, and conservative traders have already closed out the position. The puts have been as high as 81% winners. Aggressive traders can hold for further downside in the stock.


  • Teucrium Wheat (WEAT) August $14 Calls – I set a very narrow range for the wheat ETF as commodities can be quite volatile, and I wanted to keep our risk lower. As such, WEAT has dropped below our conservative risk control point. However, grains like wheat can turn around pretty quickly, so aggressive traders should continue holding WEAT calls for a potential rebound.


Category: AOA Updates