Weekly Update: November 19, 2015

| November 19, 2015

Weekly Update:  November 19, 2015

 

What To Watch

So far, it’s looking like my “stocks are going to trade in a channel” theory has been spot on.  After declining for most of last week, this week has been a different story for US equities.  The S&P 500 is up a half percent from this time last week, and has climbed 3% for the year.

In comparison, tech stocks are up over 10% for the year, although that’s been driven by a few big names.  Small caps are still down 1.5% for the year.  And, the Dow Jones Industrials are up 1.5% year-to-date.  Keep in mind, I consider the S&P 500 as the best proxy of the overall market.

As we approach December, it’s become nearly universally accepted that the Fed will raise rates in December.  The market basically has it priced in.  If it’s a one and done type deal, it’s good news for the US economy, which certainly is not in shape for an environment of steady rate increases.

However, the economy is still doing okay overall.  It may sound like a broken record, but the jobs market continues to shine in comparison to the rest of the economy.  If all those added jobs result in higher spending over the holiday shopping season, it’s going to provide a major boost for the economy heading into 2016.

Let’s take a look at the portfolio.

 

Portfolio Recap

Position #1: Twitter (TWTR) November 33 Calls

Price Paid: $1.43

Current Price: $0.01

Time Until Expiration: 1 day

Expires tomorrow – moving on.

 

Position #2: NVIDIA (NVDA) November 28 Puts

Price Paid: $1.19

Current Price: $0.01

Time Until Expiration: 1 day

Our “hedge” position will expire worthless tomorrow.  We’ll look at adding another put to the portfolio soon.

 

Position #3: GameStop (GME) November 47 Calls

Price Paid: $1.08

Current Price: $0.01

Time Until Expiration: 1 day

GME got crushed by a negative note from an analyst, although most of you would’ve been out of this position by now.  I believe this is an excellent long-term buying opportunity, but our trade expires tomorrow.  We may revisit this one in the weeks ahead.

 

Position #4: Cisco Systems (CSCO) December 26 Calls

Price Paid: $0.73

Current Price: $1.64

Time Until Expiration: 29 days

Last week’s downturn may have hurt a few of our November positions, but this week’s rebound has done wonders for our first December position.  In fact, CSCO has already crossed our first profit-taking point and is rapidly approaching the final exit price.  Peak gains so far in CSCO are 144%… in less than a week!

 

Category: OTW Weekly Updates