Weekly Update: July 28, 2016

| July 28, 2016

Weekly Update:  July 28, 2016

 

What To Watch

Quick administrative note:  We’ll have a new trade tomorrow, but there will be no update or trade next week due to travel.  I’ll be back with a new trade early the following week.

The overall market has been fairly quiet over the last week as investors focus on earnings news for individual companies.  Earnings have been mixed so far, although there have been some very big surprises to the upside, including tech giants Apple (AAPL), Facebook (FB), Alphabet (GOOGL), and Amazon (AMZN).

On the other hand, we’re not necessarily seeing a lot of growth from earnings reports.  Rather, it’s really a matter of beating expectations, which have been lowered due to a relatively slow last quarter.  It’s hard to say whether the earnings beat are really that positive, or the crowd’s expectations are just lower than before.

The Fed seems to think the economy is in decent shape. They aren’t ready to raise rates just yet, but at this pace, we’re likely to see a hike before the end of the year. It wouldn’t surprise me to see a September hike followed by a wait-and-see period through the end of 2016.

Let’s take a look at our positions.

 

Portfolio Recap

Position #1: First Solar (FSLR) August 52.50 Calls

Price Paid: $1.05

Time Until Expiration: 22 days

Earnings are next week and will make all the difference on what happens next with our calls.

 

Position #2: Delta Air Lines (DAL) August 41 Calls

Price Paid: $1.12

Time Until Expiration: 22 days

DAL has made its way back to $40, and looks like it’s ready to test the 50-day moving average resistance.  If it breaks through, we could be off to the races.  Keep in mind, the stock is still super cheap at current levels.

 

Position #3: Cameco (CCJ) September 10 Calls

Price Paid: $0.75

Time Until Expiration: 50 days

CCJ missed earnings due to weaker uranium prices and the stock dropped all the way to our first exit point for risk control. However, these being September options, I don’t recommend closing the position just yet.  I still have a strong opinion on the future of uranium, and CCJ has plenty of time to recover.  For now, I don’t recommend pulling the trigger on selling.

 

Category: OTW Weekly Updates