Weekly Update: March 13, 2014

| March 13, 2014

Weekly Update:  March 13, 2014


What To Watch

For those of you wondering when the next trade is going to be, I’ve got big news.  Next Tuesday, March 18th, I’ll be doing a special, one-time trade alert with three different options to trade!  In order to kick start our portfolio, we’re going to add three trades at once (most likely 2 calls and 1 put) that take advantage of the huge gains Internet stocks have been making in recent months.   Make sure you check your email on Tuesday for this special trade alert.

Back to the markets, with today’s selloff, the S&P 500 is down under the key 1,850 level after peaking at 1,883.  Fears over China and Ukraine are pushing investors out of equities and into safer investment such as bonds and gold.

China is going to be an ongoing concern, as is clearly reflected in copper and iron ore prices – which have taken it on the chin over the last week or so.  Meanwhile, if Russia annexes Crimea, we could see a big spike in market volatility.

On the other hand, the US economy continues to be resilient.  Initial jobless claims dropped to their lowest level since November.  And, retail sales showed a monthly gain for the first time since November as well.  Will the US economy be dragged down by global concerns?  Only time will tell.

Don’t forget, we have three new trades coming out next Tuesday.  Be prepared to trade!


Portfolio Recap

Position #1: Intel (INTC) March $26 Calls

Price Paid: $1.03

Current Price: $0.01

Time Until Expiration: 8 days

If you would have told me INTC would trade in basically a straight line for a full month, I would have called you crazy.  But that’s exactly what happened.  I firmly believe the stock is set for a bigger move coming up – it’s just not likely to happen until after our options expire.


Position #2: McKesson (MCK) March $165 Puts

Price Paid: $1.6

Current Price: $0.05

Time Until Expiration: 8 days

MCK is clearly trending higher at this point and isn’t going to come close to our option strike unless something catastrophic happens in the next week.  The stock is due for some serious mean reversion at some point – but right now it’s got momentum on its side.


Position #3: Verizon (VZ) April $47 Calls

Price Paid: $1.08

Current Price: $0.52

Time Until Expiration: 36 days

VZ has pulled back with the overall market, but is about to hit significant support.  The share price should not drop below $46 for any meaningful amount of time before heading higher.  In fact, it could be back above $47 by this time next week.  I’m still shooting for around $48 as an exit point, but I may reconsider on the next up move depending on market conditions.


Position #4: Green Mountain Coffee Roasters (GMCR) April $90 Puts

Price Paid: $0.95

Current Price: $0.87

Time Until Expiration: 36 days

GMCR is going to sell off, and it’s just a matter of time (likely days) before the stock is trading in the $90s.  There’s some support at $95 or so and then nothing until below $80.  With over a month to go, I have very high hopes that these puts will be big winners for us.


Category: OTW Weekly Updates