Update: March 7, 2016

| March 7, 2016

March 7, 2016


Portfolio Update

The last couple weeks have been quite a bit more enjoyable if you’re bullish.  Stocks have settled in after reversing higher off the lows of the year.  The days of big moves and high volatility seem to be over with for now.  We’re not entirely out of the woods, but it’s certainly easier to trade with more reasonable volatility levels.

On the year, most of the major indices are down… but have made up a substantial amount of ground.  The S&P 500 and the DJIA are both down about 2%, and the Russell 2000 is down 4%.  The biggest decliner this year is the Nasdaq 100, which is still down nearly 7%.  However, that index is top heavy and could gain ground in a hurry.

Crude oil has finally stabilized as well and is down just 6% for the year.  Keep in mind, the price of oil had dropped over 20% at one point.  The biggest commodity loser right now is natural gas, which has bounced a bit after being down nearly 30% year-to-date.

The biggest winner so far of the major assets is gold, which has climbed about 20% in 2016.  That success can be seen in our NEM position (which I talk about in the portfolio highlights section).  With gold and bonds still up on the year, there is still some decent buying going on of safe-haven assets.  Still, with volatility back at more reasonable levels, there’s a lot less to be worried about.

Last week’s jobs report was mostly very good news for the economy and the markets.  All eyes will be on the March Fed meeting.  There’s almost certainly not going to be a rate increase, but it will be interesting to see what the Central Bank has to say about the state of the economy.

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.

  • Cummins (CMI) June 110 Calls – We bought June calls to give the trade time to work, but it looks like we didn’t need all those extra months! The stock has gone nearly straight up since we made the trade and already hit our first profit-taking point.  Peak gains so far are 130%.


  • Albemarle (ALB) April 60 Calls – Another one of our new trades from last week, ALB has also started off with a bang. The stock has quickly moved higher and is flirting with the important $60 level.  First exit point is at $62.  So far, we’ve already had peak gains of 77%.


  • Newmont Mining (NEM) April 26 Calls – NEM has pretty much tracked gold since we made the trade – as expected. We came within a hair of hitting our first profit-taking point at $28.  The price of gold is holding firm even with the market stabilizing, so we could easily see this trade improving on its current gains.


Category: AOA Updates