Update: October 10, 2016

| October 10, 2016

October 10, 2016

 

Portfolio Update

First, a quick programming note:  I’ll be traveling next Monday, so next week’s new trades will come out on Tuesday.

Stocks have been quiet so far in October.  Once the September FOMC meeting came and went, there hasn’t been a whole lot for investors to focus on.  Of course, the election is coming in November, but with the betting markets increasingly predicting a one-sided race, there isn’t a lot of volatility to go with it.  The next Fed meeting also isn’t until November.

On the other hand, we do have earnings starting this week, so there could be some nice action in individual equities for the coming month.  The overall market could remain relatively flat, but during earnings season, there tends to be lots of trading opportunities based on specific results.

From a performance standpoint, stocks are having a very moderate year.  Given the yield on bonds, you could argue that stocks are even having a good year.  The S&P 500 is up roughly 7.5%, while the Dow Industrials and Nasdaq 100 are up around 7%.  The clear winners in stocks are small caps, with the Russell 2000 up 12% year –to-date.

Commodities continue to be mixed across the board, with precious metals and softs (sugar and orange juice) doing well, energy somewhere in the middle, and agriculture having a poor year.  Gold took a pretty decent hit last week, but could see a rebound in the near future.

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.

  • Caterpillar (CAT) December 92.50 Calls– We’re off to a pretty good start in one of our newest trades. While, CAT has a ways to go before it hits our first profit-taking point, we did see gains as high as 34%.  Not bad for one week.

 

  • Barrick Gold (ABX) December 18 Calls – Sometimes, you just can’t avoid bad timing. The day after I recommended ABX, gold got hit hard… and took the miners with it. One silver lining, you probably got the calls at a far lower price than I originally projected if you did make this trade. If so, definitely hold on to the calls for now, because I believe gold is due for a rebound soon.

 

  • Halliburton (HAL) October 45 Calls – We bought HAL calls all the way back in August, and it finally hit our first profit-taking point. Oil has rallied recently and oil service companies have rallied with it.  It’s not a huge winner considering how long we had to wait, but I definitely won’t complain about recent peak gains of 43%.

 

Category: AOA Updates

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