November 14, 2022
Please note, I was traveling all weekend, and after many delays/issues I am back at the desk this morning. Because of those travel issues, and late return, this will be a shorter Monday update, focused on the portfolio’s open positions.
Sparked by an inflation data point that showed some signs of cooling, the market surged higher last week. The S&P 500 gained 6%, the Dow rose 4% and the Nasdaq gained a whopping 8.8%.
Not surprisingly, as the market hit a multi-month high, the VIX made a multi-month low, closing at 22.5. The VIX’s steady decline the last four weeks has been very encouraging.
In terms of our positions, it was a pretty good week …
Long positions: XBI, GOOG, M, OXY, PYPL, SBUX, CCJ, PINS
Bearish Positions: SPY
Biotech ETF (XBI) January 84 Call – The XBI gained 6% last week and is once again testing the upper end of its multi-month range. Maybe, just maybe, this will be the time when the biotechs break out … maybe.
Alphabet (GOOGL) February 120 Calls – GOOGL gained 12% last week, which was a good first step. That being said, we have a long way to go before our calls’ value truly ramp back up.
Macy’s (M) November 20 Call (exp. 11/18) – On Thursday we rolled our M covered call to this Friday’s expiration, ahead of earnings on Thursday. After several call sales, our cost basis has now dropped to $18.40.
Cameco (CCJ) November 27 Covered Call – CCJ gained 7% last week, and our covered call that is set to expire this Friday is in great shape.
Occidental Petroleum (OXY) December 65/80 Bull Call Spread – After OXY stock fell 9% on Wednesday, perhaps tied to earnings, or more likely related to oil stocks falling, OXY managed to fight its way back to mostly unchanged on the week. Our position is in good shape.
PayPal (PYPL) March 80 Call – PYPL is the exact type of stock that worked last week … former leaders that have been demolished, and which exploded higher following the softer-than-expected inflation data. By week’s end PYPL had gained 21%, and all of a sudden our adjusted calls are in terrific shape.
Pinterest (PINS) March 25 Call – Similar to PYPL above, PINS got going again along with its growth stock peers. I continue to believe PINS could be a growth leader IF the market is in a “risk-on” environment.
S&P 500 ETF (SPY) March 420/320 Bear Put Spread – The market’s rise last week was a negative for our lone bearish position, as our puts lost value. At some point I may roll our puts … but I’m not there just yet.
Starbucks (SBUX) January 85/110 Bull Call Spread – SBUX continued its very impressive run, and our position is in terrific shape. This stock has the look of a leader.