|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|2 / 2||1||2||2 / 0||4 / 1||0|
Weekly Up to Date Performance
March 9 – 13, 2015
This was another bad week, further separating March from February and making it look like January, as there continues to be very little reason for the back and forth kind of motion that is leaving the market with a bias toward the downside.
New positions beat both the unadjusted and adjusted S&P 500 by 0.3% in a week that the market again had no real stories to react to and just like the previous week seemed to trade in a different vacuum each day.
However, despite the relative out-performance, this was was just like last, as those positions still were losers. The 2 new positions were 0.6% lower while both the adjusted and unadjusted indexes were 0.9% lower.
Existing positions, continued their second week under-performing the overall market as energy and metals continued last week’s weakness, abandoning their February gains.
Positions closed in 2015 continue to out-perform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.9% higher. That 3.2% difference represents a 169.9% performance differential.
This week was one that was predominated by interest rates, currency exchange rates and declining energy prices again.
What made some of the week’s action hard to understand and certainly hard to take was hearing such people as Blackrock’s Chief Global Investing Strategist blame the week’s sharp decline on the sudden realization that currency issues were going to impact corporate earnings.
It’s not clear who he was referring to as having just come to that sudden realization, but I can tell you that the people least likely to have come to that realization on a timely basis are not the people that move markets.
I can only assume that he was referring to portfolio managers.
You would have thought that they would have known better, especially since there are some fairly well understood cycles and “cause and effect” pairs that have demonstrated themselves as inviolate over time.
It doesn’t take too much of a genius to know that a country with a trade deficit and seeing the value of its currency climb significantly in relationship to its trading partners is likely going to see that deficit rise and is going to see corporate earnings dependent upon trade with those countries with weakening currencies decrease.
So why the sudden surprise by those who should know more and better than you and I?
This, like last week wasn’t one to be very pro-active, as there really wasn’t any justification for what was going on. Although some stock prices started looking more appealing, the uncertainty surrounding markets could have been making all of those bargains illusory.
Most week my internal metric is to see a total of 10 trades get performed. That includes some combination of new positions, new STO trades, rollovers and expirations. Most weeks that number is achieved, but not this week. Unlike previous weeks when it was a mistake to count those chickens before they were assigned, this week didn’t offer much chance of even getting them rolled over, as all of those orphaned positions were either in energy or metals.
It was a set back to see some positions expire without the chance to roll them over, although I was happy to see a couple of positions assigned and to at least create some additional opportunity to recycle the cash next week, or decide to just let it add to the pile.
As March begins to resemble January more and more, those days of rapid mini-corrections in the 3-5% range may be back. In January those happened every 2 weeks, although as soon as February started they were a thing of the past.
Based on the closing weakness on Friday, despite the losses being cut in half in the final 30 minutes, I’m not ready to think that March will be anything other than a copy of January. But I do hope that just like January it is limited in time and scope and at least gives way to a nice April.
With a little bit of cash in hand and a fair number of positions set to expire next week as the monthly option cycle comes to its end, normally I would think about the possibility of letting any new positions bypass the coming week and look at some expiration dates using extended options.
However, the market hit of the past 2 weeks isn’t leaving next week’s positions in likelihood of being assigned, At this point I would be very happy to be able to roll them over, but the damage of the past two weeks was fairly significant.
With the market now down about 3% from the February 2015 highs, there’s still plenty of room for more downside, unless March really takes on a January character and sticks to repeating 3% declines in fairly close succession.
For the most part much of next week will be focused on what the FOMC may or may not say. The good news is that an indication that interest rate hikes are really coming sooner or an indication that they’re coming later, just as Yellen suggested just 2 weeks ago, could both be a tonic for what the last two weeks have wrought.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: KO, UAL
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: none
Calls Rolled over, taking profits, into extended weekly cycle: BAC
Calls Rolled over, taking profits, into the monthly cycle: none
Calls Rolled Over, taking profits, into a future monthly cycle: none
Calls Rolled Up, taking net profits into same cycle: GME
New STO: SBGI (4/15/15)
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: SNDK, UAL
Calls Expired: CHK, GDX, HAL, KO
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: NEM (3/10 $0.02), KO (3/12 $0.22), GME (3/13 $0.36)
Ex-dividend Positions Next Week: LVS (3/19 $0.65)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, GDX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS, NEM, RIG, SBGI, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)
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