Weekly Update: May 14, 2015

| May 14, 2015

Weekly Update:  May 14, 2015

 

What To Watch

US equities are trading in a relatively narrow range.  The direction is mostly sideways, but with a bullish bias.  The S&P 500 is up a percent from this time last week, and is just a tick below the 52-week high.  Small caps have also regained some ground lost in recent weeks, and the Russell 2000 is up almost the exact same percentage as the S&P 500 on the year.

News over the past week has been equally mixed between earnings results, economic data, and geopolitical events.  However, for the most part, it’s been pretty quiet.

Retails sales dropped a bit more than expected, and the data support the slowing pace of consumer spending we’ve been seeing.  On the other hand, jobless claims are at 15 year lows.  Unemployment is now sitting at 5.4% – a reasonable level for a growing economy.

With the summer approaching, and no Fed meeting until June, the next couple weeks could be relatively quiet.  But, you never know.  There’s still enough going on overseas to spark some action in equities.  What’s more, the bond market has been crazy lately.  At some point, the volatility could spill over into stocks.

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

 

Portfolio Recap

Position #1: Blackberry (BBRY) May 10 Calls

Price Paid: $0.70

Current Price: $0.34

Time Until Expiration: 1 day

BBRY is most likely going to expire in the money tomorrow, so make sure you sell out your calls if you still have them.

 

Position #2: GoPro (GPRO) May 48 Calls

Price Paid: $1.55

Current Price: $2.60

Time Until Expiration: 1 day

GPRO also will expire in the money tomorrow.  Make sure you’ve closed this position for a solid profit before the end of the day tomorrow.

 

Position #3: Splunk (SPLK) May 60 Puts

Price Paid: $1.48

Current Price: $0.00

Time Until Expiration: 1 day

These puts expire tomorrow.  Everyone should be out by now.

 

Position #4: Bank of America (BAC) June 16 Calls

Price Paid: $0.36

Current Price: $0.69

Time Until Expiration: 36 days

BAC continues to be a strong winner and could make a run at the $18 level (exit point).  There’s still over a month to go on these calls.  Keep in mind, for less aggressive traders, there’s never anything wrong with taking a profit.

 

Position #5: Apple (AAPL) June 135 Calls

Price Paid: $1.52

Current Price: $1.20

Time Until Expiration: 36 days

AAPL is another position where conservative traders have probably exited for a good profit.  If not, still plenty of time to make money on the position.  The stock has rebounded nicely and is heading towards $130 again.  I believe the aggressive exit point of $135 is a legitimate possibility with a month to go.

 

Position #6: Facebook (FB) June 80 Calls

Price Paid: $1.65

Current Price: $3.00

Time Until Expiration: 36 days

FB is already off to the races, with a nearly 4% surge today on the announcement of a new product (Instant Articles).  We’re already just a $1 away from our first exit point for conservative profit takers.  By the way, the high point on the calls today has been 94% gains.  At this point, we should easily hit one exit point, and maybe both.

 

Category: OTW Weekly Updates