Weekly Update: May 28, 2015

| May 28, 2015

Weekly Update:  May 28, 2015


What To Watch

It’s still been fairly quiet in the US equity markets, although we’ve had a bit more downward action over the past week.  Overall, the S&P 500 is almost flat from our last update.  The Russell 2000 has also held steady over a week’s period.

While the market action hasn’t been too dramatic, there’s definitely been a bit more news to digest this past week.  The biggest news item in the US is the Avago Technologies (AVGO) buyout of Broadcom (BRCM).  At $37 billion, it’s the biggest chip company deal ever made.

From a macro standpoint, it’s more of the same.  After additional speeches by Fed members, it still appears a late 2015 rate hike is likely.  However, all we’re likely to see is a quarter percent bump this year.  Meanwhile, US economic numbers continue to show mixed results, with the biggest positives coming from the job market.

Europe also continues to show signs of life.  However, there’s still the Greek issue on the table, and whether or not the country will exit the Euro.  China also is a source of concern economically… but when has it not been over the last several years?

I’m going to roll out a new trade tomorrow, so stay tuned.


Portfolio Recap

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

Price Paid: $0.36

Current Price: $0.72

Time Until Expiration: 22 days

BAC is basically flat from last week.  The position is still a big winner.  Most of you probably took profits already, but there’s still upside potential for aggressive investors.


Position #2: Apple (AAPL) June 135 Calls

Price Paid: $1.52

Current Price: $1.11

Time Until Expiration: 22 days

AAPL’s upward climb has slowed a bit, but the overall direction is still good.  For those of you still holding the calls, I believe $135 is still a realistic goal for this stock.


Position #3: Facebook (FB) June 80 Calls

Price Paid: $1.65

Current Price: $1.75

Time Until Expiration: 22 days

FB has pulled back a bit, but remains over $80 a share.  With three weeks to go, there’s clearly plenty of time for the stock to make a run at both the conservative and aggressive profit-taking exit points.  Right now, we’re in wait and see mode.


Position #4: Yahoo (YHOO) June 43 Calls

Price Paid: $0.92

Current Price: $1.12

Time Until Expiration: 22 days

YHOO has settled in after gaining back most of its lost ground (which happened right before we bought the calls).  The calls have been as high as 96% winners so far, but I believe they have even more upside.  If the share price breaks $44, we could easily see a big run higher afterwards.


Category: OTW Weekly Updates