Weekly Update: June 11, 2015

| June 11, 2015

Weekly Update:  June 11, 2015

 

What To Watch

US equities looked like they may break down, with the S&P 500 dropping through the 50-day moving average. But, a big up day yesterday has gotten stocks back on track.  Despite the down days, the benchmark index is only down about a half percent from this time last week.

It’s important to note that despite the relatively steep selloff, the VIX never reached anything close to dangerous territory.  In other words, investors weren’t all that worried the selloff may turn into a sustained drop.  The bull market remains intact.

The biggest news once again seems to revolve around Greece.  Will the country exit the Euro, or will a deal be worked out?  The answer seems to vary by the day.  However, ultimately I think a deal will be worked out.  I don’t believe the major European powers want to contend with an exit scenario.

Meanwhile, the US economy looks to be back on track.  The jobs numbers continue to impress, especially in regard to jobless claims.  Retail sales also came in better than expected for the first time in a few months.  The US consumer may be finally regaining confidence.

Once again, I’m going to roll out a new trade early next week.

 

Portfolio Recap

Position #1: Bank of America (BAC) June 16 Calls

Price Paid: $0.36

Current Price: $1.51

Time Until Expiration: 8 days

BAC has basically gone straight up the last couple weeks.  Although expiration is next week, the stock is only about 50 cents from our aggressive exit.  However, there’s nothing wrong with taking profits now if you’re still holding the calls.  Peak gain in the calls so far is up to 364%!

 

Position #2: Apple (AAPL) June 135 Calls

Price Paid: $1.52

Current Price: $0.06

Time Until Expiration: 8 days

AAPL has bounced back a bit from recent lows.  However, it’s unlikely the options will be more worth much, even if we do manage to get back up to $135 (due to time value).  It’s likely a moot point though, since most of you probably cashed in these calls for a profit awhile ago.

 

Position #3: Facebook (FB) June 80 Calls

Price Paid: $1.65

Current Price: $2.23

Time Until Expiration: 8 days

FB has bounced around a bit with the overall market.  We’re back up near our position highs, with an outside chance of hitting our aggressive exit point.  Conservative traders should be out already.

 

Position #4: Yahoo (YHOO) June 43 Calls

Price Paid: $0.92

Current Price: $0.08

Time Until Expiration: 8 days

YHOO has taken a sharp turn downwards.  Unless something very unusual happens, these calls are likely dead in the water.  Expiration is next week.

 

Position #5: Arm Holdings (ARMH) July 50 Puts

Price Paid: $0.85

Current Price: $0.70

Time Until Expiration: 36 days

Our ARMH puts are hanging in there.  The stock has rebounded from its recent lows, but the puts have held most of their value (due to the July expiration).  Remember, puts will serve us well should the market sell off over the next month.

 

Position #6: KB Home (KBH) July 15 Calls

Price Paid: $0.38

Current Price: $0.52

Time Until Expiration: 36 days

The KBH trade from earlier this week is off to a good start.  The stock has ticked higher the last couple days and is making a run at the 50-day moving average.  That’s an important resistance point for bulls.  In just 3 days, the trade has already been as much as a 58% winner.

 

Category: OTW Weekly Updates