Update: June 15, 2015

| June 15, 2015

June 15, 2015

 

Portfolio Update

Just a quick administrative note to kick things off:  I’ll be out of town next Monday, so next week’s trade will come out on Tuesday.  Also, the following week, the office is closed for Independence Day, so there will no update until the following week.

The action has finally picked up a bit in US equity markets.  The S&P 500 is flat over the last month, and up just 2.5% for the year.  But, over the last couple weeks, we’ve seen a bit more volatility and more choppiness than usual.

The greatest area of concern right now is Greece and whether the country will exit the Euro.  An actual exit shouldn’t really impact US stocks all that much.  However, the uncertainty and volatility behind the event is what’s worrying the markets right now.

Ultimately, I think a deal will get done between Greece and European leaders.  But, it may be a somewhat tumultuous period in the interim.  And, we can probably expect the deal to come down to the wire.

Meanwhile, in the US, the economy is showing significant signs of improvement.  The Fed said it believed the first quarter slowdown was temporary – and so far it looks like the analysis is spot on.  Recent jobs numbers look very encouraging.  There’s even been an uptick in retail sales for the first time in several months.

Now the question is, when will rates go up?  The money (prediction) is still split between September and December.  Regardless, whatever interest rate increase that occurs will be just a 25 basis point move.  The Fed’s not going to risk derailing the economy now that it’s back on track.

Now, 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.

  • SolarCity (SCTY) July 57.5 Puts – Our SCTY position has paid off in a big way. As I anticipated, the stock got hit when the broad market sold off last week.  We’ve hit the first exit point of $55 per share, so conservative trades should exit.  So far, our position high is a gain of 129%!

 

  • FutureFuel (FF) August 12.5 Calls – While SCTY was going down, another alternative energy stock we own, FF, was doing the exact opposite. In fact, FF shot up past our first exit point.  The high so far has been 92% gains.  Conservative traders should also be out of this one.

 

  • Chevron (CVX) July 110 Calls – We had two winners in alternative energy stocks (both up and down), but we missed on the traditional energy stock, CVX. Oil has slowed its rapid price appreciation, and major oil companies have been slowly trending downward.  We just barely crossed our conservative exit point for risk control.  Aggressive traders can continue holding, although I don’t believe oil companies are going to turn around that substantially before July expiration.

 

Category: AOA Updates