|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|2 / 2||2||4||3 / 0||2 / 0||0|
Weekly Up to Date Performance
September 29 – October 3, 2014
New purchases for the week beat the unadjusted S&P 500 by 2.5% and the adjusted index by 2.3% during a week that the market continued its back and forth movements and in substantial size.
This week was one of some substantive news and had large movements in response, but just as last week those moves were in opposite directions, resulting in net changes that were far less than the absolute movements.
Performance of closed positions continued to out-perform the S&P 500 performance by 1.7%. They are up 3.5% out-performing the market by 91.8%.
What a week.
Not quite like last week when everyday was a triple digit day in whatever direction the coin toss dictated, but this week was pretty close.
The net result of last week’s large moves was a weekly loss of 1.4%. This week, after a huge Employment Situation Report fueled surge, the loss was only 0.8%. That y was much better than where it looked like the week might have ended thanks to a 1.1% advance today.
In the meantime the volatility remained virtually unchanged from last week, but still quite a bit higher than just two weeks ago.
That improving volatility gave some opportunity to diversify the rollovers in terms of expiration dates. With premiums a little improved when looking at forward weeks there is some renewed opportunity to spread out the risk in time.
Still, this was another in a string of frustrating weeks, with very little incentive to commit funds from the cash reserve toward new positions. Because of that there were only two new positions opened for the week. With three assignments there is some replenishment of the cash reserve, but I’m still not terribly eager to add much in the way of new positions next week.
Since current income is always a goal next week some of that goal is met by the more than usual number of positions going ex-dividend.
But the biggest reason for still not being ready to commit to much toward new positions is that I’m not entirely convinced by today’s great performance, which was fueled by the better than expected Employment Situation Report.
It’s not that I don’t believe the employment numbers, it’s just that I know that one day moves higher like the one we saw today tend to come during market downtrends and I don’t particularly want to get suckered in by the high that comes from a day like today.
Today though, was another example of how important luck is in the big picture. The timing of a 200 point gain on a Friday is perfect when needing to rollover stocks. It’s not so good when already faced with assignments and it’s not necessarily good to start off the week.
You can’t predict or do any analyses that will foresee those kind of moves and you either fall prey to them or prosper from their timing.
Today was a day to prosper from the good luck.
Next week, with a smattering of positions due to expire, while I don’t plan on opening too many new positions, I will likely look at contracts that will expire next week, rather than looking for additional diversification opportunities.
What is clear is not that we are necessarily heading for a correction, but rather that we are headed for, and already in a period of trading where larger moves are becoming more common and may become more unsettling.
If the net moves continue to be small, either higher or lower, that kind of market can be very good to be part of, but in the very early stages, such as we’re in right now, it’s probably best not to wager too much on the market’s ability to maintain itself in a narrow range.
That’s the case because there’s no reason to believe that the market will not go much higher or much lower in the near term. After these kinds of moves there are plenty of technicians ready to push the buy or sell switch as some technical level is breached, which itself could set off a cascade of events.
Thus far, that cascade of events has been missing, as instead the market just volleys back and forth.
Next week should be an interesting one, but then again, they all seem to be that way.
For one,I hope that the current market trends continue. If that’s the case we may begin to see more routinely the opening of fewer new positions each week and greater reliance on rolling over positions.
Additionally, there may also become greater use of monthly or expanded weekly options, which would mean less overall levels of trading.
Unless you have some masochistic characteristics buried somewhere deep inside, that may be some good news.
This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: GPS, WAG
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: GPS
Calls Rolled over, taking profits, into extended weekly cycle: ANF (10/24), WFM (10/24), GM (10/31)
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: none
New STO: IP (10/24), WFM (10/10)
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: CMCSA, EBAY, WAG
Calls Expired: GDX, JOY
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: CMCSA (9/29 $0.22), BMY (10/1 $0.36)
Ex-dividend Positions Next Week: GPS (10/6 $0.22), CPB (10/8 $0.31), DRI (10/8 $0.55), CHK (10/9 $0.10), FCX (10/10 $0.31)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ,, CHK, CLF, COH, FCX, GDX, GM, HFC, .JCP, JOY, K, LULU, LVS, MCP, MOS, NEM, RIG, SBGI, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)
* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.