Weekly Update: August 13, 2015

| August 13, 2015

Weekly Update:  August 13, 2015

 

What To Watch

What a painfully choppy week we just had!  US equities continue to avoid sticking to a direction.  We basically get a few up days and a few down days, with the result being a whole lot of nothing.  The moves are generally not big enough to spike volatility in any meaningful fashion.

The S&P 500 is down about a half percent from last week and only up 2.5% on the year so far.  Could stocks finish flat for the year?  We still have a long way to go, but we’re slowly heading towards a very uneventful year for equities.

The biggest news/issue is still China.  The clear and obvious slowdown in the Chinese economy is definitely taking its toll on several US industries.  Raw materials and energy have definitely been hit the hardest.  We’ll see if the country’s devaluation of its currency will help – although that causes other problems for the US.

In the meantime, the US economy is doing its best to look like a normal economy (despite 0% interest rates).  Retail sales are finally showing signs of life.  And, jobless claims continue to sit at multi-year lows.  The Fed is still on track to hike rates in September, although it may be pushed out a month or two due to China.

I plan on issuing a new trade tomorrow, so stay tuned.

 

Portfolio Recap

Position #1: Cameco (CCJ) August 15 Calls

Price Paid: $0.53

Current Price: $0.10

Time Until Expiration: 8 days

CCJ is making it somewhat interesting.  While we may not make any money on these calls, they have a chance to make a late run at finishing in the money.  Hopefully we can recoup a significant portion of our capital in that case (assuming you’re still holding).  Only about a week left on these so we’ll need a very quick up move to make them worth selling.

 

Position #2: Bank of America (BAC) August 17 Calls

Price Paid: $0.39

Current Price: $0.68

Time Until Expiration: 8 days

You should have closed this one by now (for big gains).

 

Position #3: Oracle (ORCL) August 41 Calls

Price Paid: $0.75

Current Price: $0.03

Time Until Expiration: 8 days

Not much to report on ORCL.  This one is pretty much done.  Time to move on.

 

Position #4: Mosaic (MOS) August 43 Calls

Price Paid: $0.99

Current Price: $0.79

Time Until Expiration: 8 days

MOS has sold off with the overall market, but many of you may have exited already for nice profits.  The calls hit a high of 141% gains last week. With expiration coming next week, I hope most of you are out of MOS for a profit by now.

 

Position #5: Dominion Resources (D) September 70 Puts

Price Paid: $0.77

Current Price: $0.40

Time Until Expiration: 36 days

Well, I thought this was a pretty safe put play because earnings were already released.  The market has even gone done a fair amount since we made this trade.  Still, I was wrong.  D announced a major solar project with SunEdision (SUNE) and the stock soared.  Conservative traders should have exited already.  More aggressive traders can keep holding as these are September options, but this may be a good scenario to try to protect your capital as much as possible.

 

Category: OTW Weekly Updates