Weekly Update: November 21, 2013
Weekly Update: November 21, 2013
What To Watch
Equities tempered their rapid ascent somewhat over the past week, with the S&P 500 basically flat over that time. However, the Dow Jones Industrial Average did close above 16,000 for the first time ever. The bull market in stocks rolls on.
Economic data continues to be mixed. Retail sales came in at 0.04%, better than the 0.01% estimated by economists. So, perhaps spending is picking up. That’s good news for retail companies ahead of the holiday season.
What’s more, jobless claims dropped 21,000 from the week prior – a good sign for the job market. Very slowly but surely, people seem to be getting jobs.
Besides holiday sales, the main focus of investors will continue to be on the Fed. The markets will scrutinize every bit of data to try and figure out when tapering will occur. Consensus estimates are for March/April of next year. Of course, it could just be a minor reduction, with some level of bond purchases going on for quite some time. Plus, interest rates are bound to stay historically low until 2015 or longer.
As such, the main catalyst for a downturn in equities is likely to be political. Let’s see what December brings. With next week being Thanksgiving, I’ll be sending my update out next Wednesday.
Portfolio Recap
Position #1: Citrix Systems (CTXS) December $65 Calls
Price Paid: $1.39
Current Price: $0.30
Time Until Expiration: 29 days
After taking the brutal hit shelled out by the AMZN news last week, CTXS has managed to gain some ground back. Basically, no one has any idea of how AMZN’s new cloud product will impact CTXS. It’s all speculation. Now, we just need the stock to keep climbing back to the 50-day moving average and we’ll be in good shape. Fortunately, we still have around a month before expiration to see what plays out.
Position #2: Symantec (SYMC) December $22 Calls
Price Paid: $0.70
Price Sold: $1.60
SYMC hit our exit level the very next day after last week’s update, so we cashed out. In just over two weeks, we pulled in 128.6% in profits. I’ll take those kinds of results any day!
Position #3: Dominion (D) December $65 Puts
Price Paid: $1.45
Current Price: $0.60
Time Until Expiration: 29 days
D took a sharp turn lower yesterday and looks to be headed back down to the 20-day moving average. As well as equities are doing this year, I fully expect investors to move out of ultra-safe utilities for more aggressive growth stocks. I believe we’ll see that action occur in the next month – and it should provide us an opportunity to profit off our D puts.
Position #4: Millennial Media (MM) February $7.50 Calls
Price Paid: $0.65
Current Price: $0.85
Time Until Expiration: 92 days
We’re off to a nice start in our MM position. The stock’s already back to its 20-day moving average and about to test the 50-day average. If it breaks through that resistance, we could easily see this thing go to $7.50 and then $8.00. Plus, we have almost three months to let this trade work.
Category: OTW Weekly Updates
