HI Financial Services Mid-Week 06-30-2014
Thanks for the following Newsletter. It will be great if you could clarify the GRMN position.
You mentioned that that this position is in good condition and there is no need for adjustment.
Currently, I am showing a loss in this position. Is this the way it should be?
Great question (and I love these kinds of questions).
You are partially correct in stating the trade shows a loss right now. The two options which are still open do in fact show a loss:
But, do not forget the option we rolled from the beginning trade which counts toward our total profit loss scenario:
While the $2623 booked profit is not quite as much as the -$2700 in the open positions currently, it is very close, and we still have Aug, Sep, and if needed Oct monthly options to short against our long option.
What I mean by being in great shape, is that the trade has not moved so far bullish that we have to consider a more aggressive adjustment right now. “In good shape” simply means the trade is going according to, or closely enough to, our plan, that we are still feeling good about it overall. Would I like to be out of this trade sooner with profit? Absolutely! Would I prefer the stock price move back into a bearish direction? Yes, I would prefer that for sure. But, all in all we are in good shape, and there is no need to make an additional adjustment right now.
Thanks for the great question and please feel free to email me any time.
What has been happening so far this week?
Not Much?!!! We end a quarter for the all the major indexes. We did much better than expected Pending Home Sales +6.1 vs est +1.5 and the Chicago PMI came in at 62.6 vs est 61 But last month they were 65.
Where will our market end this week?
Doesn’t really matter because we have no volume and we have a shortened week. Thursday is a half day of trading and Friday the markets are cosed. Monday starts the earnings season with AA reporting. Tomorrow I would expect a buy in day and see an possible 100 point gain as funds buy back into positions. I would expect a bullish week with the market up 125 to 150 points.
DJIA– Trouble getting over 17,000, higher lows = bullish pendant
SPX – Higher highs and lows and we are off the RSI overbought indicator
COMP – higher highs and higher lows but we are in the RSI over bought indicator
Where Will the SPX end July 2014?
My guess is 2000 on the SPX, 17,100 on the Dow, 4500 COMP
What is on tap for the rest of the week?
Tues: PAYX, FC
Tues: ISM Index, Construction Spending, Auto, Truck
Wed: MBA, ADP Employment, Factory Order, Challenger Job Cuts
Thur: Initial Claims, Continuing Claims, Ave Workweek, Non-Farm payroll numbers, private payrolls, Unemployment Rate, Hourly Earnings, Trade Balance, ISM Services
Fri: Market Closed
How I am looking to trade?
Today – added shares of AAPL, Added Short Puts to BIDU and will add short puts to Micron (June 33 against July Long Puts at 32)Addded more Bull Puts on SNDK 97.50/100 looking to see SNDK hold “round” number $100 support. I WILL be adding long puts on V and NVDA tomorrow
Right now I feel like I am letting a lot of stocks Run – AAPL, CLDX, DIS, D, TSLA, F, NVDA, VZ, V, LNCO, ZION
Collar: BIDU, MS, SBUX, BBY(exploding collar)
Covered Calls: ½ AAPL positions, SNDK Jul 87.50 with a 6.36 credit (?) and Bull Puts, MU
Stock only positions: AAPL, DIS, D, F, VZ, V, LNCO, ZION,
Protective Puts: MEI, NVDA (18 July from earnings), MU
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