Weekly Update: April 7, 2016

| April 7, 2016

Weekly Update:  April 7, 2016


What To Watch

Well, things got a little more interesting this week with stocks with the last couple days seeing a pullback.  Granted, today’s 1.2% drop in the S&P 500 is hardly something to be riled up over.  But, it’s certainly more action than we’ve seen in the past couple weeks.

Since last week, the S&P 500 is down about 1.5% and is nearly flat on the year.  The Nasdaq 100 and Russell 2000 are still negative on the year (-2% and -3 respectively).  Meanwhile, oil is back down 10% for the year.  Oil’s negative reversal is part of what’s weighing on stocks.

Gold continues to be they year’s top performer, up 17% year-to-date.  With gold up big, 30 year bonds up 10%, 10 year notes up 5%, and utilities up 13%, it’s pretty clear that the crowd is still cautious on stocks.  That helps explain volatility’s 12% jump since last week (although VIX is still down 7% for the year).

The added volatility finally resulted in some movement in our portfolio.  It wasn’t ideal as some of the moves helped and some hurt, but we have a better chance to make money overall with a little market action.  Don’t forget earnings start next week, so more opportunity is certainly going to open up.

Let’s take a look.


Portfolio Recap

Position #1: Bank of America (BAC) April 13 Calls

Price Paid: $0.82

Time Until Expiration: 8 days

Not much to report.  You should be out of this by now.


Position #2: Silver Wheaton (SLW) April 15 Puts

Price Paid: $1.05

Time Until Expiration: 8 days

SLW has taken a pretty sharp turn downward, but probably too late for us to making anything of it.


Position #3: eBay (EBAY) April 25 Calls

Price Paid: $0.69

Time Until Expiration: 8 days

We finally had a big spike from EBAY, although it pulled back almost entirely the next day.  The one day spike was good enough to hit our first profit-taking point.  It wasn’t much, but if you closed out the position upon hitting our stop, you would’ve made a little money on the trade.


Position #4: Freightcar America (RAIL) April 17.5 Calls

Price Paid: $0.75

Time Until Expiration: 8 days

RAIL has followed the rest of the railroad industry downward.  This one is pretty much a lost cause.


Position #5: Box (BOX) April 12 Calls

Price Paid: $0.97

Time Until Expiration: 8 days

Still a whole lot of nothing with BOX.  We’ve been nickel and dimed on this one to death.  I believe the stock is undervalued, but it could take a while before the market agrees with me.


Position #6: GoDaddy (GDDY) April 31 Puts

Price Paid: $0.95

Time Until Expiration: 8 days

GDDY gapped down and hit a real winner (finally) with this trade.  Although the stock gained back ground the next day, the big drop resulted in hitting our first profit-taking point.  More importantly, we’ve hit peak gains up to 111% on this trade.


Position #7: H&R Block (HRB) May 27 Calls

Price Paid: $0.55

Time Until Expiration: 43 days

The market has not been kind to HRB, which has already hit our first risk control exit point.  However, we’re just barely below the exit point and we still have over 40 days on this trade.  I’m okay with holding on to this position even if you’re a bit more conservative.  We’re below the 52-week low, so it’s hard to imagine the drop will continue that much longer.


Category: OTW Weekly Updates