Author Archives: TheAcsMan

Daily Market Update – February 28, 2014 (9:00 AM)

The Week in Review will be posted by 6 PM and the Weekend Update will be posted by noon on SUnday.

Today’s possible outcomes include:

Assigned: LOW, MA, MOS, VZ

Rolled: GE, TGT, YUM

Expired:  AIG, APC, CSCO, INTC

Trades, if any, will be attempted to be made prior to 3:30 PM (EST)

Daily Market Update – February 27, 2014 (Close)

Normally, you would think that on a day that has Durable Goods, Jobless Claims and Janet Yellen offering Congressional testimony it would be a potentially volatile day in the markets.

With some disappointment in those numbers one may also have expected a tenuous market to respond with some negativity, particularly since there’s little indication that the Federal Reserve might turn the “mother’s milk” spigot back on in response to single data points.

The problem is that makes use of rational thought and logic.

Instead, the past few days have seemed to be focused on different numbers and no emphasis on words relating to policy.

Specifically the market has simply cared about the intra-day high on the S&P 500 and the closing high.

Today, in a very calm manner, it did just that.

Anything else happening during the past few days, such as earnings reports or news from Crimea, served only as a means to bring the market closer to, or further away from those levels.

Technicians are jumping up and down telling everyone that will listen that if only you had looked at the charts you would have known that there would be this kind of resistance.at that level.

If the market had skyrocketed higher those same technicians would have been jumping up and down to tell anyone that would listen that if only you had looked at the charts you would have known that the market was set to explode at that level.

They’re right. You can have your cake and eat it, too.

For me, Thursdays just represent that time when you begin thinking about the coming week.

What past opportunities will come to their natural ends as the week comes to an end and which opportunities won’t, as well as which will go on to live yet another week, while earning their keep.

Whatever the answers to those questions may turn out to be, they then predicate thoughts for the coming week.

While still sitting on some cash and hopefully adding to it by tomorrow’s close, it would be nice to see some resolution around that 1850 level.

My expectation is that resolution will be on the higher side of 1850, but in the past comebacks from correction attempts there hasn’t been the slightest hesitancy in moving forward once that inflection point was reached. So far, this time is a little different and the resistance has been there, especially manifesting itself a few times this week with reversals that moved the market from above to below the magical 1850 level.

I’m not a technician and don’t place too much emphasis on that sort of thing, but it’s not likely that kind of behavior is coincidental. There are plenty of believers and their beliefs matter, particularly as a collective group.

While I usually hope to see alternating market moves, especially as they may contribute to volatility, for now, my hope is that the direction is just higher, but in moderation.

Moderate price moves in either direction are always good, especially when looking to make purchases, but lately the markets have been exhibiting lots of “all or none” kind of behavior and sustaining prices longer than in the past when the behavior has been in response to disappointment.

Retail is a good example and seems to be suddenly waking up after more than a quarter in deep slumber, with some very few exceptions. Never mind that the excitement over the numbers is related to significantly reduced expectations and comments like “losses weren’t as bad as expected.”

Imagine the response of retail stock share price if they actually had something good to report. Yet the sentiment has quickly changed, despite there not being tangible evidence that people are in a position to increase their discretionary spending.

Ultimately, whereas these sort of things used to matter, it’s not so clear that they any longer do.

Instead, looking forward a few days at a time and changing sentiment and outlook as often as the market does, seems to be an increasingly rational alternative to believing in the sustained rational behavior of the market and the people that guide its movements.

For a change, today’s sanity, as the 1850 level was breached, was a welcome change from what we’ve gotten used to out of necessity.

Daily Market Update – February 27, 2014 (9:30 AM)

Normally, you would think that on a day that has Durable Goods, Jobless Claims and Janet Yellen offering Congressional testimony it would be a potentially volatile day in the markets.

With some disappointment in those numbers one may also have expected a tenuous market to respond with some negativity, particularly since there’s little indication that the Federal Reserve might turn the “mother’s milk” spigot back on in response to single data points.

The problem is that makes use of rational thought and logic.

Instead, the past few days have seemed to be focused on different numbers and no emphasis on words relating to policy.

Specifically the market has simply cared about the intra-day high on the S&P 500 and the closing high.

Anything else happening during the day, such as earnings reports, served only as a means to bring the market closer to, or further away from those levels.

Technicians are jumping up and down telling everyone that will listen that if only you had looked at the charts you would have known that there would be this kind of resistance.at that level.

If the market had skyrocketed higher those same technicians would have been jumping up and down to tell anyone that would listen that if only you had looked at the charts you would have known that the market was set to explode at that level.

They’re right. You can have your cake and eat it, too.

For me, Thursdays just represent that time when you begin thinking about the coming week.

What past opportunities will come to their natural ends as the week comes to an end and which opportunities won’t, as well as which will go on to live yet another week, while earning their keep.

Whatever the answers to those questions may turn out to be, they then predicate thoughts for the coming week.

While still sitting on some cash and hopefully adding to it by tomorrow’s close, it would be nice to see some resolution around that 1850 level.

My expectation is that resolution will be on the higher side of 1850, but in the past comebacks from correction attempts there hasn’t been the slightest hesitancy in moving forward once that inflection point was reached. So far, this time is a little different and the resistance has been there, especially manifesting itself a few times this week with reversals that moved the market from above to below the magical 1850 level.

I’m not a technician and don’t place too much emphasis on that sort of thing, but it’s not likely that kind of behavior is coincidental. There are plenty of believers and their beliefs matter, particularly as a collective group.

While I usually hope to see alternating market moves, especially as they may contribute to volatility, for now, my hope is that the direction is just higher, but in moderation.

Moderate price moves in either direction are always good, especially when looking to make purchases, but lately the markets have been exhibiting lots of “all or none” kind of behavior and sustaining prices longer than in the past when the behavior has been in response to disappointment.

Retail is a good example and seems to be suddenly waking up after more than a quarter in deep slumber, with some very few exceptions. Never mind that the excitement over the numbers is related to significantly reduced expectations and comments like “losses weren’t as bad as expected.”

Imagine the response of retail stock share price if they actually had something good to report. Yet the sentiment has quickly changed, despite there not being tangible evidence that people are in a position to increase their discretionary spending.

Ultimately, whereas these sort of things used to matter, it’s not so clear that they any longer do.

Instead, looking forward a few days at a time and changing sentiment and outlook as often as the market does, seems to be an increasingly rational alternative to believing in the sustained rational behavior of the market and the people that guide its movements.

Daily Market Update – February 26, 2014 (Close)

I recently had a comment on Seeking Alpha by someone who is absolutely convinced that Deckers, which reports earnings this week will be another Michael Kors in that regard. Specifically, he was as sure and as emotional as you could likely be that Deckers will blow out their numbers and equally certain that they’ll put forward great guidance. He then equated those two with shares going to $95, which would represent about a 12% gain.

He may very well be right. In fact, the option market almost agreed with that opinion, believing that shares could go to $93.

However, another part of the equation is a little less objective than the numbers. which arguably can themselves have some of their objectivity stripped away and modified as they’re being processed prior to reporting.

That part of the equation is the reaction of the market place.

No one ever has any clue how the market will react. Ever.

Just look at Monday’s nearly 200 point gain.

In fact, the market itself may not be monolithic. Now just look at Macys yesterday. It was down about 2% in the pre-open and then immediately turned around once the bell rang and was one of the strongest stocks for the day, up about 6%.

How could that be?

Doug Kass, a fairly well know investor who is often short the market, just bemoaned the fact that no one ever says “I don’t know.” It’s s if there’s some shame in admitting that there’s sometimes neither rhyme nor reason for that which we observe.

When it comes to retail, which has been an abysmal place to be as that part of the economy isn’t readily demonstrating much in the way of vitality, suddenly the message is that disappointing performance may be good. That’s essentially an aexample of “if you can’t beat them, join them,” at work.

That’s not too unusual, as we’ve certainly seen days when good news isn’t good enough or good news is met by choruses of “what have you done for me lately?”

I don’t mind a more accepting attitude, as I’d be happy to see some of my retail stocks get assigned or at least make back some of what they’ve lost. Certainly if you suffered when the attitude was not as accepting you feel as if you’re owed something.

For those that don’t have the patience that comes with having pretty much seen it all, you may never get the opportunity to see both sides of that sine curve that takes you through ups and downs, not only in price but in attitude and outlook.

I’m also reminded a little of some emotional reactions to some opinions regarding Facebook and Apple back in mid-2012. If you can recall where those two stocks were at that point, you can probably guess what the prevailing emotional opinions were at that time.

While you can always select out examples to prove or disprove a point, one thing that is certain is that certainty and the emotion that supports that certainty aren’t in your best interests when it comes to investing.

I can’t remember the  last time I was excited by a stock or the market. It undoubtedly goes back to the last time my broker tried to sell me on something, but that was a really long time ago.

I always said “yes” and almost always felt some remorse when we sold something at a loss, since I had the bad habit of continuing to follow the stock and watch that sine curve.

With the market still within easy striking reach of another new high it’s easy to get excited but I still can’t get excited about individual stocks. I still see them as utilitarian and helping to contribute to a larger mosaic rather than any one specific stock standing out as a superstar.

I really don’t know how analysts can do what they do. There was a recent story this week that spoke of how burned out they get and how quickly most leave the industry as they are constantly measured by their ability to hit the long ball, which most people are aware is well correlated with strike outs.

But everyone loves making the headlines.

I like staying below the radar and plugging away. Mid-week on the day before more Congressional testimony from Janet Yellen, I don’t know how much plugging away there will be today, probably not too much, but if the market wants to continue on a little ride higher today and maybe for the rest of the week, I still don’t mind being an observer and occasional participant in something new.

For the moment, this week is looking as quiet as last week was busy as far as trading is concerned. For now, my focus is on seeing a reasonable portion of this weeks’s expirations either being assigned or rolled over, although I’d like to add to the paltry three new positions for the week, if only something would excite me.

I was a little surprised by having made a few trades as the day unfolded, both adding new positions and finding some new cover in a day that really had no strong tone or conviction one way or another, but did demonstrate some continues resistance at the 1850 level on the S&P 500.

While previous attempts at a correction had no problems blasting through their respective highs and while I’ve been expecting the same to happen this time around, so far it’s proving to be a little different.

Tomorrow we get Janet Yellen, so we’ll see whether she can once again give the market a goose, as she did a couple of weeks ago in her second, albeit interrupted,  day of testimony. In the past, with both Greenspan and Bernanke, but especially Greenspan, when testimony was given over two consecutive days, we rarely saw the same market performance on both days. In fact, so often the net result was no impact, despite the frequent strong moves that ended up cancelling one another out.

This time, thanks to the two week weather induced break the result may be different.

That would be nice as the week and its contracts come to an end.

Daily Market Update – February 26, 2014 (9:30 AM)

I recently had a comment on Seeking Alpha by someone who is absolutely convinced that Deckers, which reports earnings this week will be another Michael Kors in that regard. Specifically, he was as sure and as emotional as you could likely be that Deckers will blow out their numbers and equally certain that they’ll put forward great guidance. He then equated those two with shares going to $95, which would represent about a 12% gain.

He may very well be right. In fact, the option market almost agreed with that opinion, believing that shares could go to $93.

However, another part of the equation is a little less objective than the numbers. which arguably can themselves have some of their objectivity stripped away and modified as they’re being processed prior to reporting.

That part of the equation is the reaction of the market place.

No one ever has any clue how the market will react. Ever.

Just look at Monday’s nearly 200 point gain.

In fact, the market itself may not be monolithic. Now just look at Macys yesterday. It was down about 2% in the pre-open and then immediately turned around once the bell rang and was one of the strongest stocks for the day, up about 6%.

When it comes to retail, which has been an abysmal place to be as that part of the economy isn’t readily demonstrating much in the way of vitality, suddenly the message is that disappointing performance may be good.

That’s not too unusual, as we’ve certainly seen days when good news isn’t good enough or good news is met by choruses of “what have you done for me lately?”

I don’t mind a more accepting attitude, as I’d be happy to see some of my retail stocks get assigned or at least make back some of what they’ve lost. Certainly if you suffered when the attitude was not as accepting you feel as if you’re owed something.

For those that don’t have the patience that comes with having pretty much seen it all, you may never get the opportunity to see both sides of that sine curve that takes you through ups and downs, not only in price but in attitude and outlook.

I’m also reminded a little of some emotional reactions to some opinions regarding Facebook and Apple back in mid-2012. If you can recall where those two stocks were at that point, you can probably guess what the prevailing emotional opinions were at that time.

While you can always select out examples to prove or disprove a point, one thing that is certain is that certainty and the emotion that supports that certainty aren’t in your best interests when it comes to investing.

I can’t remember the  last time I was excited by a stock or the market. It undoubtedly goes back to the last time my broker tried to sell me on something, but that was a really long time ago.

I always said “yes” and almost always felt some remorse when we sold something at a loss, since I had the bad habit of continuing to follow the stock and watch that sine curve.

With the market still within easy striking reach of another new high it’s easy to get excited but I still can’t get excited about individual stocks. I still see them as utilitarian and helping to contribute to a larger mosaic rather than any one specific stock standing out as a superstar.

I really don’t know how analysts can do what they do. There was a recent story this week that spoke of how burned out they get and how quickly most leave the industry as they are constantly measured by their ability to hit the long ball, which most people are aware is well correlated with strike outs.

But everyone loves making the headlines.

I like staying below the radar and plugging away. Mid-week on the day before more Congressional testimony from Janet Yellen, I don’t know how much plugging away there will be today, probably not too much, but if the market wants to continue on a little ride higher today and maybe for the rest of the week, I still don’t mind being an observer and occasional participant in something new.

For the moment, this week is looking as quiet as last week was busy as far as trading is concerned. For now, my focus is on seeing a reasonable portion of this weeks’s expirations either being assigned or rolled over, although I’d like to add to the paltry three new positions for the week, if only something would excite me.

Daily Market Update – February 25, 2014 (Close)

This morning appears to be a repeat of the signs coming from yesterday’s pre-open, albeit in the opposite direction.

By the closing bell it distinguished itself from yesterday by actually following the early tone and never making any attempt to stray

This morning all signs pointed to a listless open with no catalyst in sight to propel the market convincingly in either direction, but we all know what happened yesterday. Same absence of catalyst, but very different outcome in magnitude and direction.

While yesterday’s market was nearly 200 points higher in the mid-afternoon, most people would have still been content with a market closing 103 points higher.

Except for the technicians.

They are the ones who believe that they have the answer for why the market went so much higher yesterday. It all had to do with the S&P 500 exceeding its previous intra-day high and setting off buy programs. Others speculated that a short squeeze was going on, as well.

Since the algorithms that start these buying programs are written by mere mortals someone, at every firm that utilizes such algorithms, knows whether that S&P 500 level was, in fact, the tripping point to begin systemic buying, while we’re left to speculate, because it’s a crime to suggest that you just don’t know what caused a significant move.

However, there was never any kind of frenzy or “Fear of Missing Out” (FOMO) that characterizes real short squeezes. Also, short squeezes usually don’t just wither away in the trading session, as did half of yesterday’s gain. Short squeezes tend to pick up steam going into the close because no one wants to be left short going into a relative vacuum.

A quick look at the previous recoveries after attempted corrections does show that there was typically a strong push forward as  the market climbed back to the previous high point from which the correction attempt began. So on this one the technicians may have the real answer to yesterday’s market.

That’s the good news. At least if we have another correction attempt that shows signs of a quick recovery, there’s reason to aggressively participate in anticipation of that move beyond the highs.

The bad thing is that those same technicians express concern about the market being unable to hold those highs going into yesterday’s close, which saw the market drop nearly 100 points and in an accelerating manner in the final 20 minutes of trading.

Like most strategies or approaches to investing, it’s usually a bad idea to pick and choose what aspects of the strategy to use and which signals to ignore. That’s no discipline at all.

Since I’m not a big advocate of technical analysis, as the successes are widely publicized, but the false positives and false negatives are forever buried and lost, yesterday’s late session turnaround is just something that gets filed away, it’s meaning, if any to be determined later.

Yesterday didn’t offer too many opportunities to spend money unless you were interested in chasing stocks. There was some limited chance to establish cover, but by and large it was another day that I enjoyed being an observer, as it is nice seeing your holdings move higher, especially when there’s no real reason that anyone can identify.

Today, the money was still there to be spent, although there was a little bit of a pessimistic overhang from the technical perspective and the pre-open mildly reflected that pessimism. Unfortunately, as the day went on there really weren’t any new opportunities to be found.

Anyway, while the market did give back much of the gain yesterday, what we have not seen in the past 20 months or so is a market that quickly gives back the ground that it had regained following a correction attempt. Instead, it has, for the most part been a march forward, punctuated by some correction attempts along the way. If you look at the chart for the past year, it has almost been like clockwork. Every two months a relative low and then a rebound and back to a relative low. If that pattern continues, our next relative low should be sometime in late March 2014 or early April.

Do I wholeheartedly believe that?

No, but it does serve as some guidance and comfort.

Daily Market Update – February 25, 2014 (9:30 AM)

This morning appears to be a repeat of the signs coming from yesterday’s pre-open, albeit in the opposite direction.

That is a listless open with no catalyst in sight to propel the market convincingly in either direction, but we all know what happened yesterday.

While the market was nearly 200 points higher in the mid-afternoon, most people would still be content with a market closing 103 points higher.

Except for the technicians.

They are the ones who believe that they have the answer for why the market went so much higher yesterday. It all had to do with the S&P 500 exceeding its previous intra-day high and setting off buy programs. Others speculated that a short squeeze was going on, as well.

Since the algorithms that start these buying programs are written by mere mortals someone, at every firm that utilizes such algorithms, knows whether that S&P 500 level was, in fact, the tripping point to begin systemic buying.

However, there was never any kind of frenzy or “Fear of Missing Out” (FOMO) that characterizes real short squeezes. Also, short squeezes usually don’t just wither away in the trading session, as did half of yesterday’s gain.

A quick look at the previous recoveries after attempted corrections does show that there was typically a strong push forward as  the market climbed back to the previous high point from which the correction attempt began. So on this one the technicians may have the real answer to yesterday’s market.

That’s the good news. At least if we have another correction attempt that shows signs of a quick recovery, there’s reason to aggressively participate in anticipation of that move beyond the highs.

The bad thing is that those same technicians express concern about the market being unable to hold those highs going into yesterday’s close, which saw the market drop nearly 100 points and in an accelerating manner in the final 20 minutes of trading.

Like most strategies or approaches to investing, it’s usually a bad idea to pick and choose what aspects of the strategy to use and which signals to ignore. That’s no discipline at all.

Since I’m not a big advocate of technical analysis, as the successes are widely publicized, but the false positives and false negatives are forever buried and lost, yesterday’s late session turnaround is just something that gets filed away, it’s meaning, if any to be determined later.

Yesterday didn’t offer too many opportunities to spend money unless you were interested in chasing stocks. There was some limited chance to establish cover, but by and large it was another day that I enjoyed being an observer, as it is nice seeing your holdings move higher, especially when there’s no real reason that anyone can identify.

Today, the money is still there to be spent, although there is a little bit of a pessimistic overhang from the technical perspective and the pre-open may be mildly reflecting that pessimism.

While the market did give back much of the gain yesterday, what we have not seen in the past 20 months or so is a market that quickly gives back the ground that it had regained following a correction attempt. Instead, it has, for the most part been a march forward, punctuated by some correction attempts along the way. If you look at the chart for the past year, it has almost been like clockwork. Every two months a relative low and then a rebound and back to a relative low. If that pattern continues, our next relative low should be sometime in late March 2014 or early April.

Do I wholeheartedly believe that?

No, but it does serve as some guidance.

Daily Market Update – February 24, 2014 (Close)

There didn’t seem to be much lurking around the corner that might either serve to spook or excite the markets this week and maybe even less so today.

Yet, for no reason that anyone could really identify, other than perhaps the S&P 500 crossing its all time intra-day high and setting off buy programs, the market just went straight higher once trading started for keeps.

While I prefer a market that has little net movement, I like the kind of market that has lots of intermediate swings in both directions that help to create a large trading range. If I can’t have both, then I’d go for the former, because even with lower premiums the opportunity to repeatedly sell calls on the same positions that are essentially moving nowhere is a pretty stress free way to go about a profitable existence.

The sources of excitement this week appear to be limited. While there are still some earnings reports to come and some merger stories are heating up, it looks to be a quiet week unless something is injected into the system to shake things up.

I continue to have a short term optimistic view, solely related to past history when coming back from attempts at a correction. Given that each of those have seen an overshooting of the previous high there’s not too much reason to suspect that this will be otherwise.

Although maybe the fact that there’s not too much reason to suspect otherwise is, itself, reason enough to suspect otherwise.

This contrarian thing can get carried away.

Given the way today ended up working out it continues to keep that pattern established in 2012 alive and well.

At the very least, even a flat market, comprised of lots of flat stocks, can be a great victory.

The market appeared to be ready to open the week mildly on the upside, but for the past month or so the first hour hasn’t been very reliable in setting overall tone. While the first hour is often called “amateur hour,” I don’t think that’s really consistently the case, although lately it hasn’t been the most opportune time to open new positions.

Today, however, it would have been the best time to get stocks at their lowest price.

Once again, this week, I’d like to see some additional positions picking up their own cover and contributing to the income streams that most of us want to see and seeing either rollovers or assignments of the 10 positions set to expire this week.

For the first time in a few months I don’t have a distribution of expirations over the weeks intermediate between the current week and the end of the monthly cycle, as the lowered volatility has made that a less desirable strategy. As long as the market continues either treading water or going higher there’s no particular advantage, perhaps even a detriment to that kind of  staggering, but I still may be looking for some opportunities to populate some intermediate weeks.

With cash back up to levels that I’m comfortable pursuing a buying spree and still having enough left over for a rainy day, I don’t mind spending the money this week and have a little less hesitancy than just a few weeks ago.

With cash at about 42% I’m not resistant to getting down to the 25% range, which would equate to about 7 new positions, if they are there to be had. While today saw some relative bargain like appearances in Verizon and Starbucks there were few and far between as the day went on and on.

Still, as the market has again moved higher comes that challenge of locating what may be relative bargains and looking for downside protection at the same time. As with so many opportunities in the past that may simply mean looking to familiar names, either down on their luck or not having shared as much in the recent good fortune the market has exhibited.

With the consideration of more familiar names also comes the consideration of once again looking to rollover in the money positions, as opposed to allowing assignment. That was a strategy opportune during the latter part of 2012 and early 2013. In a rising market it continues to capitalize on strength and minimizes the need to discover an increasing number of new opportunities for the coming week. Additionally, as volatility is low, the cost to repurchase those in the money contracts is relatively lower than when volatility is high, as the added “premium” of being in the money quickly erodes when the clock is ticking away and expiration rapidly approaching.

 

Daily Market Update – February 24, 2014 (9:00 AM)

There doesn’t seem to be much lurking around the corner that may either serve to spook or excite the markets this week and maybe even less so today.

While I prefer a market that has little net movement, I like the kind of market that has lots of intermediate swings in both directions that help to create a large trading range. If I can’t have both, then I’d go for the former, because even with lower premiums the opportunity to repeatedly sell calls on the same positions that are essentially moving nowhere is a pretty stress free way to go about a profitable existence.

The sources of excitement this week appear to be limited. While there are still some earnings reports to come and some merger stories are heating up, it looks to be a quiet week unless something is injected into the system to shake things up.

I continue to have a short term optimistic view, solely related to past history when coming back from attempts at a correction. Given that each of those have seen an overshooting of the previous high there’s not too much reason to suspect that this will be otherwise. At the very least, even a flat market, comprised of lots of flat stocks, can be a great victory.

Although maybe the fact that there’s not too much reason to suspect otherwise is, itself, reason enough to suspect otherwise.

This contrarian thing can get carried away.

The market appears to be ready to open the week mildly on the upside, but for the past month or so the first hour hasn’t been very reliable in setting overall tone. While the first hour is often called “amateur hour,” I don’t think that’s really consistently the case, although lately it hasn‘t been the most opportune time to open new positions.

Once again, this week, I’d like to see some additional positions picking up their own cover and contributing to the income streams that most of us want to see and seeing either rollovers or assignments of the 10 positions set to expire this week.

For the first time in a few months I don’t have a distribution of expirations over the weeks intermediate between the current week and the end of the monthly cycle, as the lowered volatility has made that a less desirable strategy. As long as the market continues either treading water or going higher there’s no particular advantage, perhaps even a detriment to that kind of  staggering, but I still may be looking for some opportunities to populate some intermediate weeks.

With cash back up to levels that I’m comfortable pursuing a buying spree and still having enough left over for a rainy day, I don’t mind spending the money this week and have a little less hesitancy than just a few weeks ago.

With cash at about 42% I’m not resistant to getting down to the 25% range, which would equate to about 7 new positions, if they are there to be had.

Still, as the market has again moved higher comes the challenge of locating what may be relative bargains and looking for downside protection at the same time. As with so many opportunities in the past that may simply mean looking to familiar names, either down on their luck or not having shared as much in the recent good fortune the market has exhibited.

With the consideration of more familiar names also comes the consideration of once again looking to rollover in the money positions, as opposed to allowing assignment. That was a strategy opportune during the latter part of 2012 and early 2013. In a rising market it continues to capitalize on strength and minimizes the need to discover an increasing number of new opportunities for the coming week. Additionally, as volatility is low, the cost to repurchase those in the money contracts is relatively lower than when volatility is high, as the added “premium” of being in the money quickly erodes when the clock is ticking away and expiration rapidly approaching.