It
was a wild market week with 200 point Dow intra-day swings on many
days. Readers know I tend not to like fast markets, so I didn't enjoy
the week, basically broke even, got a few more white hairs from the stress.
Highlights includes taking some losses on IWM JPM, new
longs positions in WBA ULTA. Here are the trades:
(p =
puts, c = calls, sell means sell-to-open, all are third week
expiration unless noted)
Fri
Sell WBA Aug 85 p @93.4 New long position in Walgreens Boots
Alliance. WBA breaking out on earnings news. Chart base around 86.
Buy
half position SKX shares @118.62 I hedge back to net long in
Sketchers. I sold layers of puts and calls and am now buying shares
in case there is an assignment on a move up past 120.
Thu
Sell SPY Jul 198 p @207.2 Massive relief rally at the open. I
continue to sell weekly puts on the S&P 500. This is the third
week. I have a complicated position that includes a bear vertical put
spread out to September. Selling weeklies against that pays for. The
risk is that the decline happens right now and not further out in
time. 198 is near the cluster of support levels early in 2015 and is
about at the 10% probability line. By the time I type all this my put
is 5 cents higher (shakes head). By the close, I am down over 130% on
this leg.
Sell
ULTA Aug 145 p @161.0 65 New long position in Ulta Beauty, as it
breaks out from a flat base.
Wed
In some parts of the world they say that if you don't like the
weather, wait an hour, it will change. It is that kind of stock
market with wide swings, dips and rallies.
The Chinese stock market
has some serious issues, a 150% run up in two years, and now a rapid
30% decline off the highs, with the government stepping in and being
ineffective in stemming the decline. There is still Greece, and
Puerto Rico so a lot of uncertainty for nervous investors. It is
important to keep perspective. The U.S. market still hasn't seen a
10% correction from the top. VIX can barely get to 20.
Sell
YUM Jul 95 c @86.2 Yum Brands diving today, likely because of
exposure to the Chinese consumer market. Spreads are wide, and I hit
the bid to sell these calls. Yikes. I sold the strangles 82.5/110,
and it is getting uncomfortable.
Cover
(buy to cover) IWM Jul 119 p @122.5 I reduce risk by closing this
leg on the Russell 2000 etf for about a 100% loss. Don't want to sell
more calls. Time to edge towards the storm shelter. The market
weather is getting stormy.
Tue
Sell JPM Jul 69.5 c @66.8 Rebalance in JP Morgan Chase as it moves
down towards the 50 day moving average. The 5-year chart looks
bullish, and that supports a bounce off the 50 dma. However, the
overall market is not acting well and may tug JPM lower.
Cover
(buy to close) JPM Jul 65 p @66.3. JP Morgan now down a full point. I
reduce risk by taking a 125% loss on this layer of sold puts. I am
still net long, but decide to move away from this falling piano.
Again, it is at support, right here and technical traders may be
buying. Rule #1 is to live to trade another day.
Sell
IWM Aug 131 c @122.6 Rebalance in the Russell 2000 etf as the market
moves lower. I am still net long, wary of a whipsaw back to the
upside because it is that kind of choppy market.
Sell
SKX Jul 110 p @117.1 Rebalance in Sketchers.
Mon
Greece votes no. Market gaps lower then fades the gap.
Sell
NKE Jul 105 p @109.9 I add to longs in Nike. 105 is the chart gap.
NKE going positive for the day.
Sell
SKX Aug 95 p @116.1 Sketchers continues its amazing upside run and I
continue to rebalance sold strangles.If it moves up to about 118 I'll
take a half position in stock to offset the layer of sold Jul 120
calls.
Sell
SPY JulW2 p @207.0 It is looking like a complete route for the
bearish camp. I sell a layer of weeklies on the S&P 500 at the
10% probability line. Tiny much premium considering the substantial
margin requirement, but these are weeklies, and I have money
available. Well, it was a wild ride for the day and the bears came
back in for a while. Tough market.
Position
Summary:
long
BRKB DATA DE EL FB NKE
net
long HON JPM SKX UNH
net
neutral AMBA IBB IWM MRK SPY
net
short DIS YUM
short
MCK
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