Friday, May 09, 2014

Weekly: tepid record high

Another record high for the Dow Jones Industrial average. The mood remains tepid, meh, bored, skittish. The Russell 2000 is down 2% for the week, down 10% from its highs. Some popular trading stocks such as TSLA, TWTR took hits. I was long AAPL and it faded. On the other side HUM, EA, moved higher. Some are citing divergence between the Russell and the larger caps as a sign that the market ripe for a big down move.

Right now, I am not seeing it that way. The sentiment at AAII (link) remains in the middle of the range (28% bulls, 43% neutral, 29% bears on 5/7/14), and these are mostly life long stock investors. There is a large percentage of the population that doesn't trust the stock market and will not invest their money. If anything, the SPY chart is setting up for a possible upside breakout, keeping in mind the cliche, "never short a dull market." My highlights include new positions in BEAV (BE Aerospace) and SLB (Schlumberger).

Fri Sell SLB Jun 90 puts @100.0. I open a new position in Schlumberger

Sell APC Jun 110 calls @99.8. I rebalance my Anadarko position by selling calls. APC had a nice up move on earnings, but fizzled in the days after.

Sell ASH Jun 90 puts @103.5. I open a June position in Ashland. Ashland came up on a fundamental screen. The earnings were good. It is a bit extended to the upside.

Wed Sell AMGN Jun 95 puts @111.1. I open a June position in Amgen. Earnings were poor, but this has been one of my best trading stocks for calendar 2014, so I'll keep riding until price action breaks down.

Tue Sell APC Jun 90 puts @103.5. Anadarko moves higher on earnings and an upgrade. I rebalance short May strangles by selling June puts.

Sell DIS Jun 72.5 puts .30 @81.3. Disney earnings after the close. I open a June position at the 90% probability strike (90% chance of profit, 10% chance of loss).

Mon Sell GLD Jun 114 puts @126.4. I rebalance my short strangle in gold to neutral as gold nudges higher. 114 is at the lows of the year. Premium is tiny considering the large margin requirement.

Sell BEAV May 90 puts .35 @99.0. BE Aerospace gapping higher on news that it is exploring strategic alternatives (selling the company). Nice chart base at my strike price of 90. BEAV also came up on a fundamental screens that I sometimes do. One negative is that the options are thinly traded and the spreads are often frighteningly wide.

Position summary
net neutral SPY
net short GILD UAL

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