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Saturday, May 10, 2014

Weekend Portfolio Analysis (May 10, 2014)

Just a few minutes ago I was like,, I really need to write a Weekend Portfolio Analysis today? I mean, I could have copied/pasted the exact same article I wrote last week. My opinion hasn't changed. My positions are the same and just as healthy. My new trades are non-existent. Or I could have also added a new entry on the blog titled Weekend Portfolio Analysis as usual, but instead of spending near an hour writing crap, it could have simply been a one line article: "Folks look at my previous Weekend Portfolio Analysis. It's all there. It's all the same. See you next week". But I've come to love this exercise, so here me be, providing you with free entertainment on a beautiful Saturday morning.

It's been 15 days since I entered my last trade. I'm trying to break my own record of 20 days without entering a new trade. Obviously that last sentence was not serious. I'm not trying to break any record. I just feel there's nothing to do in this market.

The SPX index went from 1879.49 to 1878.48 this week. There's not even a decent percentage number to describe that move. I'm not even going to do the math. And because the market is not doing much lately, I'm being a happy camper with my existing credit spread positions.

Market conditions
(Click on Image to enlarge)
Stochastics: 59 (neutral)
McClellan: -32 (neutral)
41% of stocks are trading above their 20 Day Moving Average (neutral)

We're in no man's land and I won't enter new trades until the market reaches an overbought or oversold extreme.

By the way the Russell Index has continued forming the downtrend channel that I mentioned two weeks ago. And in addition to that it closed below its 200 Day Moving Average on Tuesday for the first time since November 21, 2012. The index spent  530 days trading above the 200 DMA. If that was not a record, it has to be close.
(Click on image to enlarge)
This market doesn't seem as strong as the one we saw last year. Well, one thing is for sure, that 30% growth seen in 2013 is very unlikely at this point. We're already in May. I'll keep selling Calls whenever the market reaches an overbought condition.

May Positions
SPX 1695/1700/1960/1965 Iron Condor 99% probability of success. Will expire worthless this week.

RUT 1000/1010 Bull Put Spread  99% probability of success. It will also expire worthless this week.

May expiration will bring a 4%+ portfolio growth. I'm satisfied with that result.

June Positions
RUT 920/930 Bull Put Spread 99% probability of success and well out of the money.

SPX 1710/1715/1965/1970 Iron Condor 83% probability of success. Up from 79% last week. This Iron Condor is looking pretty good but there's still time to work here: 41 days to go.

Action plan for the week
No new trades in the upcoming week. That's unless we suddenly reach a market extreme.

As for the existing positions, once again, the June SPX 1710/1715/1965/1970 Iron Condor is the center of my attention and it's looking pretty healthy. It doesn't seem likely to be threatened this week.

Long Term Investing
A brief note about my dividend growth investment portfolio. I haven't done anything since February 24 when I purchased a few shares of Rogers Communications Inc. That's why I haven't talked about my activity there anymore. The little portfolio has been doing pretty good and paying me a little cash via dividends here and there but at these levels I'm not interested in buying anything else. Unlike the American indexes, the Canadian TSX index is up +6.8% this year and it has become even harder to find attractively valued opportunities in the Canadian markets at this point.

Economic Calendar
Tuesday: Chinese Industrial production. US Retail Sales and Business Inventories.
Wednesday: US PPI
Thursday: European CPI, US CPI, Philly Fed Manufacturing Index.
Friday: Building Permits and Housing Starts.

Good luck this week folks!

Check out 2014 Track Record

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1 comment:

  1. It was a boring week for me as well as I did nothing but sit on my hands. I have the following positions:

    May IWM 104/102 bull put spread
    June IWM 98/96 bull put spread
    June SPY 165/163 bull put spread
    July IWM 95/93 bull put spread

    As you can see, I am currently 100% long. I have no bear call spreads right now. Assuming we don't have a big drop next week, I will let the May IWM 104/102 bull put spreads expire worthless. I will be looking to add some more contracts to my June and July IWM bull put spread positions if we see more weakness next week in IWM. I will also sell July SPY/SPX iron condor next Friday assuming we are still in no man's land.