|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|2 / 2||2||8||1 / 0||0 / 0||0|
Weekly Up to Date Performance
January 5 – 9, 2015
Although there was lots of economic news to be digested this week, it’s not really clear that any of it had much of an impact on anything that we saw. None of the plunges and none of the surges, and there were plenty of each, could easily be attributed to anything tangible.
Sometimes stuff just happens.
The 2 new positions added this week ended the week 2.0% higher and beat the unadjusted S&P 500 by an unusually large 2.7%. However, as compared to the unadjusted S&P 500 that difference was a much smaller 0.8%, as the market took a large decline on Monday, but no new trades were opened on that day.
The market itself lost 0.7% on an unadjusted basis, but gained 1.2% an unadjusted basis when Monday was not considered.
That relative performance advantage was again seen in the existing positions, this week as they finished the week 0.2% lower, but still surpassed the S&P 500 for the week by 0.4%, although there were again no real stand-outs among the positions. Instead, it may have been more a situation of being able to take advantage of some of the spikes in the market and selling options contracts on 10 positions this week, adding to the income flow, as every little bit helps.
This week, there were just lots of little helping bits.
The first position for 2015 was also closed this week, as the weakness on Friday removed the chance to also see two other positions get assigned. So far, that single position was 0.9% higher, as compared to the 0.2% advance for the time adjusted market.
With more than 200 positions closed last year and the year before, there’s still a long way to go in that regard, but as long as open positions can collect premiums and be productive members of a portfolio, I can wait for them to be assigned and added to the closed list.
Well, this was another interesting week, for sure. That made for two of those in a row.
Heading into the close of the week there was every reason to believe that the sudden upsurge that had come to replace the intensely strong decline seen in the first two days of the week, would continue.
That was especially true since the Employment Situation Report this morning was good.
Importantly, it wasn’t “too good,” and didn’t create fears of interest rate increases among traders who are programmed to panic when what we all know is going to have to happen eventually, actually happens.
In fact, the early reaction during the pre-open futures trading was to take a moderately lower market to one that was moderately higher.
As much attention turned to the unfolding events in France, you would have been excused for believing that a relatively good outcome, given the possibilities, would have sent the market higher in relief.
But this was a week in which there just weren’t any real antecedent events, as markets just went where they seemed to want to go.
Luckily, there were those two days of strong buying and somehow over the course of the week there were numerous opportunities to sell calls and execute rollovers, even being able to again develop a little bit of diversity in terms of the expiration dates.
That was welcome, as there are already enough positions expiring next week, without adding to many more to that exposure.
While I was reasonably happy with the performance this week, owing to the ability to make more call sales than has been the case for quite a while, there was very limited ability to add to cash reserves. Other than for the early assignment of Campbells Soup, which thus far is the only assigned position of 2015, the cash reserves are lower than I would like to see.
While that cash is helpful in order to generate recurring weekly income, it isn’t absolutely necessary, as long as existing positions can either have new call contracts sold or can be rolled over.
Hopefully, that will be the case next week, as I enter that week just like this one and not particularly enthused about adding new positions. Instead, this week looked forward to the next in hoping that it would help to put those positions expiring next week to be in a better position to be assigned, or rolled over, yet again.
The 5 days of triple digit moves this week, along with their sizes doesn’t give too much reason to be very daring with remaining cash.
Next week, does however, hold the possibility of uncovering the next catalyst to drive the broader market forward, as earnings season starts once again.
What makes this earnings season different is that there may be some signs of an unexpected bonus coming from reduced energy costs and more discretionary dollars in the pockets of consumers.
While it may be too early to see much of an impact on last quarter’s earnings, where the real catalyst may be is in the forward guidance that will be given. It’s been a long time since there has been an overly optimistic picture painted regarding future prospects across the broader market and I think the market may respond very positively if that kind of picture can be painted.
As we await the beginning of earnings season we’ll see whether this week’s volatility and absence of any theme or association to real events will have any carry through as European events will soon come to a head and the ECB’s hand may get forced much sooner than Draghi or Germany were prepared to act.
All in all, aIthough, wouldn’t mind if the rest of the world was simply placed on mute, and we could focus on earnings and the weather.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: BAC, CPB
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: GDX, HAL
Calls Rolled over, taking profits, into extended weekly cycle: BAC (1/23), EMC (1/23), GDX (1/23), GPS (1/23)
Calls Rolled over, taking profits, into the monthly cycle: none
Calls Rolled Over, taking profits, into a future monthly cycle: BX, LXK
Calls Rolled Up, taking net profits into same cycle: none
New STO: GDX (2/20), TMUS (2/20)
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: CPB
Calls Expired: none
Puts Assigned: none
Stock positions Closed to take profits: none
Stock positions Closed to take losses: none
Calls Closed to Take Profits: none
Ex-dividend Positions: GPS (1/5 $0.22)
Ex-dividend Positions Next Week: CHK (1/13 $0.09), FCX (1/13 $0.31), WFM (1/14 $0.13)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, BP, CHK, CLF, COH, DOW, FCX, HAL, HFC, .JCP, JOY, LVS, MCP, MOS, NEM, RIG, SBGI, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)
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