Weekly Update: April 30, 2015
Weekly Update: April 30, 2015
What To Watch
Another week, another flat performance for US equities. The S&P 500 is almost completely breakeven since our update last week. It’s still up about 3% on the year. On the other hand, small caps seem to have lost some favor from investors and are down 1.5% over the same period.
Crude oil continues its recent resurgence and is nearing $60 a barrel. Even natural gas has gotten into the act, up 5% today. Natural gas is still down 7% for the year, but oil is now up 3% in 2015.
Earnings season has turned mostly positive, with some big names performing really well. Apple (AAPL) beat expectations handily (although the stock hasn’t responded yet). Amazon (AMZN) and Starbucks (SBUX) also posted some very positive results.
The Fed meeting this week confirmed what we pretty much already know. The economy slowed over the winter months, but is expected to improve this summer. The market now expects rates to stay at current levels until December. September is still a possibility however. The next Fed meeting isn’t until June, so a lot can happen between now and then.
I’m going to roll out a new trade tomorrow.
Portfolio Recap
Position #1: Blackberry (BBRY) May 10 Calls
Price Paid: $0.70
Current Price: $0.47
Time Until Expiration: 15 days
BBRY has remained in the money since its jump last week. That’s decent news for us. But, we need another leg higher in order to make some money on our calls. Still, a lot can happen in two weeks.
Position #2: Cree (CREE) May 37.50 Calls
Price Paid: $1.47
Current Price: $0.01
Time Until Expiration: 15 days
As I said last week, CREE is likely going to be a dud after missing earnings. We’re moving on from this one.
Position #3: GoPro (GPRO) May 48 Calls
Price Paid: $1.55
Current Price: $3.10
Time Until Expiration: 15 days
Now that’s what I call a big move! GPRO beat earnings and the shares spiked – almost to the 200-day moving average. Conservative investors should have taken profits, and we have a legitimate shot at the aggressive exit point. At its peak, the calls have been 306% winners!
Position #4: Splunk (SPLK) May 60 Puts
Price Paid: $1.48
Current Price: $0.40
Time Until Expiration: 15 days
SPLK continues to be volatile as expected, and has moved a bit back in our favor. Still a long way to go to hit a profit-taking exit point, but at least it’s in the realm of possibility now. Only aggressive traders should still be in this trade.
Position #5: Bank of America (BAC) June 16 Calls
Price Paid: $0.36
Current Price: $0.38
Time Until Expiration: 50 days
We got a nice solid up move in BAC and our position is slightly in the black. As these are June options, there’s ample time for this trade to become a big winner.
Category: OTW Weekly Updates
