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The Saturday Investor’s Review – Aug 25 2018

Aug 25, 2018 | Stock Market Outlook

The Saturday Investor's Review

S&P Closed Up On The Week

While volumes dropped off this week as the summer begins to end, there were a lot of events this week that impacted stocks and the markets. Political events took centre stage this week with everything from the Cohen plea bargain to the Manafort trial to Jackson Hole and these kept many investors on the sidelines. It also sidelined the S&P from rallying higher during the week, but the S&P still made new highs during the week and closed at a new all-time high. By the end of the week the S&P was up 24.56 points for the best weekly gain since the second week of July when the index gained 41.49 points.

As of Friday, the S&P is up 2.15% since August 1st and 7.52% since the end of December 2017.

SPY ETF Trade From Monday Aug 24 2018 – Returns 36.5%

In the last Saturday review from August 18, I indicated I was buying SPY calls on Monday at the open for August 31 expiry.

Monday Aug 20 saw the S&P open at 2853.93. I bought 15 call  contracts of the Aug 31 expiry $285 call strike at 9:31 AM, paying $2.31.

At the close of trading on Friday Aug 24 these were sold for $3.17 at 3:50 PM for a profit of 86 cents on each call contract.

Capital at risk was $3465.00

Income earned was $1290.00

Commissions: 30 X .75 = $22.50

Total profit: $1267.50

Return was 36.5%

New SPY Weekly Trade

On Monday Aug 27 I will be buying 15 call contracts again for Sep 7 expiry at the money, as the underlying trend remains higher.

NASDAQ New High

The NASDAQ ended the week up 129.65 points. Despite the so-called “tech-wreck” the NASDAQ made a new all-time high of 7949.71, just 51 points below 8000. It closed only slightly below the Friday high, ending the day at $7945.98. I am holding the TQQQ ETF at present which is the 3 X Pro Bull NASDAQ 100 ETF. It’s aim is to earn three times the daily moves of the NASDAQ 100 index. The outlook for the NASDAQ is for new highs in the final week of August.

Weekend Investing Strategy Reading List

Saturday’s are a chance to relax, kick back and review some strategy articles to work toward becoming a better investor. Here are some strategy articles from the archives that are worth a refresher read.

Partially Open To All Investors

This first article is partly open to all investors.

1) Collar Option or Married Put For Long Term Dividend Investors

New highs in stock markets always worries investors. New highs are notorious for pullbacks and with so many bearish calls by analysts, investor concern is understandable. However it is also difficult to continue to generate profits, earn income and grow portfolios without somehow being even partly invested.

To assist, here’s an opportune moment to review the purpose of a married put or a collar option. This can be a very successful strategy if implemented correctly and it provides extremely good protection against a decline of almost any size. It is a strategy that when applied properly can give an investor the comfort to stay invested in even the worst bear market, strong or mild correction or even a one day collapse such as the notorious Flash Crash. There is a lot to like about a married put.

The focus of the article from May 2012, is on dividend paying stocks and ETFs, but the collar or married put strategy can be applied to most stocks or ETFs. There are two examples open to all investors, one in Citigroup Stock (C) and another in Kimberly-Clark Stock (KMB). Members are given more in-depth information as well as additional examples.  Read more…

Open To All Investors

1) Understanding Daily Volume and Price

This article is open to all investors. In many of my trades I discuss varying aspects of volume and why they are important when investing or trading. This article from March 2013, goes more in-depth and looks at the heart of stock market investing as it explained the important combination of daily volume and price and how these two tools can become powerful assistants for entering a trade, monitoring and adjusting it as well as exiting.  Read More…

2) Market Timing System Using The Ultimate Oscillator

Here’s another strategy article open to all investors. With the S&P and NASDAQ at all-time highs, one technical tool that investors can use to assist in staying invested but spotting potential trouble-spots is the Ultimate Oscillator. This article from April 2012 looks at a market timing system based on understanding the signals from the Ultimate Oscillator technical tool and acting on them both to protect a portfolio and profit from trend changes in the markets.

I used this tool through the market crash of 2008 and the article includes a section on how the Ultimate Oscillator assisted in my profiting from the downturn. Read more…

For Members Only

1) Using Volume To Understand Support Levels – NVIDIA Stock

This article for members from April of 2018 is rather pertinent at present. This short article won’t take long to read but it explains in easy to follow directions, how to use volume to understand at what price levels most investors are holding shares and how to profit from that knowledge by selling put options. This focuses on NVIDIA Stock (NVDA) but can be applied to any stock or ETF. With many stocks on upswings at present, understanding how to use volume can be very helpful when selling options so as to try to insure that underlying stock is not assigned. Read more…

2) How A Market Correction Assists Investors Selling Put Options For Income

Another strategy article for members from Feb 2018. Most investors fear market corrections but wouldn’t it be nice if the market correction itself, could become a tool to assist in making profits, not losing them?

Here’s how investors can benefit from a market correction and learn to let the correction assist their profit making and, where needed, rescue and repair efforts. Read more…

3) 10 Keys To Trading Options While Having A Day Job

This strategy article for members is from 2017. I am often asked how to sell options or trade options when having a career and a busy home life. When I first started selling put options I had a full time job and was raising two kids. It was definitely hard but I could rapidly see the results of my mushrooming portfolio through earning 12% to 20% every year through selling options. This article from 2017 looks at 10 keys that I learned from years of selling options while holding a full-time job and having a very busy home life. Read more…

4) Rolling In-The-Money Credit Put Spreads

This final article for this Saturday was one I referred to several times this past week. This week a number of investors emailed seeking help in rolling out and in one case, rolling down, credit put spreads against stocks that had declined and caught investors with in-the-money put positions. This article is a great start for novice and experienced investors alike, who have been caught, in the past, holding credit put spreads that have ended up at risk of loss and assignment. Read more…


Enjoy the rest of the weekend. I will be writing more this weekend so come back and check throughout the weekend. It is pouring rain here but the weather man promises a hot day tomorrow which they say will feel like the 90’s. Maybe one more blast of hot summer before fall starts.

 




 


 

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