Weekly Update: May 2, 2013

| May 2, 2013

Weekly Update:  May 2, 2013


What To Watch

Another mixed week for stocks is behind us.  The S&P 500 and Dow Industrials are both slightly positive over the last week.  And once again, financial news has been both positive and negative.

On the bright side, economics news has been mostly good this week.  ISM manufacturing came in better than expected and the housing market appears to be experiencing robust growth.  Moreover, jobless claims are the lowest levels they’ve been in five years.

The one misstep we had was the ADP employment number, which showed the smallest increase in private payrolls since last September.  However, the more important April jobs number comes out tomorrow morning.

Perhaps the most important news of the week so far comes from central banks.  In the US, the Fed has said they have no plans to change their monetary stimulus program anytime soon.  In other words, the massive bond buying will continue.

In Europe, the ECB finally cut its key rate by 0.25%.  It’s a much needed move and will hopefully give the region a boost.

I have a couple different trade ideas I’ve been tossing around, but decided to wait until after tomorrow’s job numbers before pulling the trigger.  Last month we had a big surprise and it moved the markets significantly.

However, once I see what the market does tomorrow morning, I’ll be releasing another trade.  So, keep an eye on your inbox.


Portfolio Recap

Position #1:  Deere & Co (DE) May $87.50 Calls

Price Paid: $1.43

Price Sold: $2.87

We scored another 100% winner with DE!  The boost to the stock came on a reversal in grain prices, led by corn.  However, it was only a matter of time before DE rebounded.  As I said before, it’s too good of a company to languish for long.  Congratulations on a big winner.


Position #2:  Weatherford International (WFT) June $12 Calls

Price Paid: $0.92

Current Price: $1.20

Time Until Expiration: 50 Days

WFT has been holding ground with our calls up around 30%.  However, the big news comes after close today.  Earnings results are likely to drive the stock movement tomorrow, regardless of the jobs number.  Let’s see what the quarterly numbers have in store for us.  Keep in mind, we still have 50 days left on these options.


Category: OTW Weekly Updates