|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|1 / 1||5||2||2 / 0||5 / 0||0|
Weekly Up to Date Performance
March 16 – 20, 2015
This was a difficult to describe week.
Each and every day, followed the trend that began with the last 2 days of the past week and closed at a triple digit change in the direction opposite that of the previous day’s close.
That’s something you don’t see very often.
There was only a single new position opened for the week. It beat the adjusted S&P 500 by 1.2% but trailed the unadjusted S&P 500 by 1.0% in a week that the market again followed only a single story, but lots of interpretations of the meaning of that story.
The new position was 1.6% higher for the week, while the unadjusted S&P 500 finished 2.7% higher and the adjusted S&P 500 was only 0.4% higher, as the sole purchase for the week was on Thursday, effectively undoing much of the gain subsequently seen on Friday to close the week.
Positions closed in 2015 continue to out-perform the market. They are an average of 5.6% higher, while the comparable time adjusted S&P 500 average performance has been 1.9% higher. That 3.8% difference represents a 202.3% performance differential.
All eyes were focused on the FOMC this week and the market really didn’t know what it was looking for, nor what it really wanted.
Sometimes, just like a small child, who is more interested in just receiving something, there wasn’t much attempt to discern whether what was received was good, bad or indifferent.
It’s not very clear that the market got anything resembling clarity to the question of when the FOMC will begin to raise rates, but it did act as if all was now crystal clear.
The market itself seems to be telling a different story and it’s far from one that’s crystal clear.
This is what the past few days of trading looked like at the closing bell:
This is sort of ridiculous.
What makes it ridiculous is that there’s been basically no volatility during the course of these past few days. The market, with the exception of a single one of those days has ignored the pre-open futures trading and just headed in a single direction and had traded with almost no intra-day variation.
The exception to that lack of intra-day variation was this past Wednesday when the FOMC Statement was released.
With all of this faux volatility, there actually hasn’t been much real volatility, even as the uncertainty has seemed to be increasing. In fcat, the volatility is about at the last low point, which was at the beginning of December 2014, even though it may not really feel like that.
This was a difficult week to want to make any commitments and was a perfect example of how the slightest change in your timing could have made such a significant difference in outcomes.
Looking forward to the next week there’s really no additional information that’s available to push in one direction or another.
For those who look at charts, looking at the net change in the closing level of the DJIA over the past 7 trading sessions shows lower highs and higher lows, so there will surely be someone who will say that the prevailing pattern is for a breakout in prices to the upside.
I have a hard time embracing that, but the reality is that for more than 2 years that really has been the case, regardless of what the charts have looked like.
I was happy to see positions go along for the ride this past week and was especially happy to have a chance to find some new cover for some of the previously uncovered positions. Although there were a couple of rollovers and a couple of assignments, there were too many expired positions to end the March 2015 option cycle.
With some additional cash available next week being added to the pile and with only 2 positions set to expire next week, the greatest likelihood is that any new positions would primarily look at next week’s expiration, rather than in forward weeks. With a smattering of positions already sprinkled through the individual weeks of the April 2015 option cycle and with premiums again following volatility lower, there’s little incentive to look at further diversifying positions by time of expiration.
While I wouldn‘t mind letting go of some of the cash reserve in order to pick up some new positions next week, my preference would be to have another week such as this past one. I’d prefer to generate the income from existing positions, where possible and put as little additional capital at risk until there is really some clarity.
That should begin fairly soon as earnings season is about to begin anew in just a couple of weeks as we may finally get some information regarding the impact of falling energy prices as well as the impact of the strengthening US Dollar.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: MET
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: none
Calls Rolled over, taking profits, into the monthly cycle: none
Calls Rolled Over, taking profits, into a future monthly cycle: LXK, MRO
Calls Rolled Up, taking net profits into same cycle: none
New STO: AZN (4/24), GDX ($21 4/10), GDX ($20 4/2), HAL (4/10), KO (4/10)
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: GME, SBGI
Calls Expired: BAC, BP, DOW, EMC, GDX
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: LVS (3/19 $0.65)
Ex-dividend Positions Next Week: DOW (3/27 $0.42)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, CHK, CLF, COH, FAST, FCX, GDX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS, NEM, RIG, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)
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