Weekly Update: August 6, 2015

| August 6, 2015

Weekly Update:  August 6, 2015


What To Watch

Another sideways week for the S&P 500 is in the books.  The benchmark for US equities is down small from this time last week.  On the year, the index is up about 3%.  This week seemed to be more negative than last, but there really wasn’t much volatility to speak of.

Concerns over China are still probably the biggest drag on the market right now.  There’s going to have to be a strong source of demand coming from outside the US at some point if we’re going to see the economy shift into the next gear.

In the meantime, economic news was mostly better than expected this week.  ISM Services showed good improvement, and jobless claims are still near long-term lows.  The big news will be the July jobs report, which comes out tomorrow.

With economic news looking moderately positive, it’s becoming increasingly likely the Fed will raise rates in September.  Once again, we’re talking about a quarter point hike, which is as close to nothing as possible.  Most likely, the crowd has built in the rate hike into projections by now.

I’m going to issue a new trade tomorrow.


Portfolio Recap

Position #1: Cameco (CCJ) August 15 Calls

Price Paid: $0.53

Current Price: $0.15

Time Until Expiration: 15 days

CCJ has climbed back up to the key 50-day moving average, as expected.  Next major technical point to reach is the 200-day moving average at $15.50, which would effectively make our calls winners.  Can it happen in the next 15 days?


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

Price Paid: $0.39

Current Price: $0.88

Time Until Expiration: 15 days

BAC is hovering around $18 per share.  As I said last week, most of you are probably out of this position by now.


Position #3: Oracle (ORCL) August 41 Calls

Price Paid: $0.75

Current Price: $0.07

Time Until Expiration: 15 days

ORCL didn’t continue its climb as we hoped and has retreated to under $40.  At this point, I don’t have high expectations that this trade will become profitable now that the recent climb has reversed.


Position #4: Apple (AAPL) August 127 Calls

Price Paid: $1.42

Current Price: $0.10

Time Until Expiration: 15 days

For some reason, investor decided to dump AAPL.  It doesn’t make a whole lot of sense as there are plenty of reasons to be optimistic about the world’s largest company.  Nevertheless, we’ve dropped below both of our risk control points so this trade is now closed.  I may look to add AAPL again in the coming weeks as I’m still bullish on the stock this year.


Position #5: Mosaic (MOS) August 43 Calls

Price Paid: $0.99

Current Price: $1.90

Time Until Expiration: 15 days

MOS beat earnings, and we nailed this trade!  The trade’s just a week old but we already crossed our first profit-taking point.  And, the aggressive exit point is a realistic possibility with two weeks until expiration.  Highs for the trade so far have been 105% gains.


Category: OTW Weekly Updates