Many
are commenting on the passing of Leonard Nimoy. Nimoy is most
famous for playing Mr. Spock on the original Star Trek TV series.
Some would say the current stock market is not logical.
Sometimes the
thread of logic isn't always straight. With the
recent drop in oil prices, many traders have been trading airline and
oil stocks. For the most part profits have been modest, with more than a few losers on the more obvious bets. Looking a bit wider, Monster MNST had blow out earnings. The logic is that
these drinks are often bought at gas stations by young people, and that their customers had a bit more money.
A person at the local
CANSLIM meetup was trying to follow that gas money trail to other areas.
Home Depot HD also recently had great earnings. So while the hot
money was playing airlines and oil companies, taking opposides of the
oil drop trade, the bigger money was to be made in the logic trail.
I
wish I was that smart, but rarely am. Sometimes the logic trail can
lead a person up the wrong path. Just because one person likes a product or store, it may not mean the stock is good. Trading and investing is easy in hindsight, not
so easy in real time.
As
for my week, mostly quiet, up a tiny bit overall. Apple caused some
heart burn by moving up the I-Watch announcement date from April to
March. This meant both puts and calls went up in price, and cost me
both way. Honeywell's weakness was another concern. After the recent
Goldilocks market of just right, I am that much more sensitive to
"too hot, too cold," market conditions. Here are the
trades (p = puts, c = calls, all are week 3 expiration unless noted):
Fri
Sell HON Mar 105 c @103.0. Rebalance a complicated position in
Honeywell by selling another layer of calls. This one is messy.
Thu
Sell AAPL Mar 138 c @127.0. Rebalance short strangles on Apple as it
keeps sliding. As it keeps moving lower, I keep tap dancing. I am
short multiple layers of puts and calls. The Mar 125 puts are deep
into red ink, because I sold them near the highs of the recent move.
Wow, by mid-day, Apple rallies to over 129 and I get whipsawed on
these calls. On days like this, I wish I were a more nimble trader.
Unfortunately, that isn't going to happen. I don't think that
quickly, and am not in front of the computer all day.
Sell
DIS Apr 95 p @104.9. Add to longs in Disney by opening an April
position. A lot of folks are looking forward to the new Star Wars
movies. The box office will be a fraction of the potential. Toys,
theme parks, clothing, collectibles are all sources for revenue.
Cover
(buy to close) IWM Mar 103 p @123.2. I free up some buying power by
covering these puts for a big gain. With so many days until
expiration, I can likely make better use of the capital before then.
Wed
Sell AAPL MarW2 140 c @129.5.
Sell
AAPL Mar 140 c @129.4. Rebalance short strangles on Apple by selling
two layers of 140 calls, the Mar week 2, and the regular Mar week
3's. The burst higher is looking like a trap. It has been a common
pattern early in 2015, a push higher than a sharp retracement. AAPL
bouncing a bit, so not so good timing on these moves.
Sell
UNH Mar 120 c @114.0. Rebalance short strangles on United Healthcare.
Same deal, stock popped higher, now dropping. I rebalanced on the way
up, and now am counter balancing on the way down.
Tue
Sell BA Apr 135 p @154.1. New long position in Boeing. Chart breakout
level is 135. BA was downgraded yesterday, which means to me it
likely has more room to run. At tops, it is all upgrades and higher
price targets.
Mon
Sell UNH Mar 108 p @114.5. Rebalance short strangles on United
Healthcare as it continues to rally. A bit later, I sell another
layer of puts:
Sell
UNH Mar 111 p @116.4. Another rebalance. Apparently, UNH up on
Medicare rate news. I am short the Mar 120 calls.
Sell
VRX Apr 160 p @197.4. Renewed long position in Valeant Pharma. VRX up
huge on earnings. Breakout is from an ascending base, which can be
dangerous. However, there are likely a lot of shorts that are
scrambling to cover on the news. In hindsight, I became too cautious
too soon on VRX.
Sell
AAPL Mar 125 p @132.5. Rebalance short strangles in Apple by layering
more puts. AAPL at new all time highs.
Position
Summary:
long
APC ASH BA BRKB DIS GDX LUV JWN MMM UNP VRX WFC
net
long AAPL AMGN GLD HON UNH XOM
net
neutral BABA FDX ILMN IWM PANW SPY WHR
renewed
long VRX
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