Update: June 9, 2014

| June 9, 2014

June 9, 2014

 

Portfolio Update

Market activity has been slow overall, but the S&P 500 continues to rally and set new highs. For the year, the benchmark index is up 6.25%. Not bad considering it was close to even in what seems like a very short time ago.

US equities continue to show signs of a strengthening bull market given the accommodative Fed policy, attractive equity valuations (compared to bonds), and continued growth in the US economy. If the S&P 500 rallies just two more months, it will represent the longest continuous bull market in 85 years.

Basically, there’s not a lot going on in the world which seems able to derail the momentum in stocks. If all the international hot spots can’t shake investor confidence, I’m not sure what will – barring a downturn in the US economy.

However, given the healthy US jobs report from last week, and most of the other domestic economic news, it appears we have little to worry about for the time being. With how slow summer tends to be in regard to market news, I don’t expect a whole lot of action for the time being.

Still, you never know for sure – so stay tuned.

 

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.

  • Starbucks (SBUX) July $72.50 Calls – As I mentioned last update, SBUX broke out to the upside right after we made our trade. The stock has continued to climb and our calls have now been as much as 174% winners! Conservative traders can take your profits off the table, while aggressive traders can continue to hold up to $78.

 

  • Keurig Green Mountain (GMCR) July $100 Puts – The volatility GMCR is famous for has come into play already for our puts. The stock briefly hit above $120, meaning conservative traders should have closed their positions. However, the share price already plummeted back to $114. Aggressive traders should still be holding the options. Given the volatility in this name, our puts are very much in play.

 

  • Westmoreland Coal (WLB) July $30 Puts – I significantly underestimated the upside potential in WLB, one of our most recent trades. The stock, which has been a sideways mover since March, broke through strong resistance and soared to new 52-week highs. With today’s 5% move higher, both conservative and aggressive traders should have closed their positions.

 

Category: AOA Updates