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Monday Market Analysis


After hitting another new multi-year high last week the markets were seen taking a bit of a breather as volatility came back into the market. We traded down from a high of 153.28 on the SPY to 149.94. I still believe that this market remains in an uptrend and that dips will likely continued to be bought. The big level I am watching to hold as support is around $147 where the SPY broke out after several attempts and failing.

I used last weeks pullback as an opportunity to take profits on my long volatility play and to close my short callspread on the SPY. All in all it was about a wash between the two positions. I also closed out my long position in PBI. I was the owner on record for the ex-dividend date, so I will be getting the dividend of about $300 sometime in the first few weeks of March.

CLF has had a nasty fall after reporting earnings and cutting the dividend and took a hefty portion of my gains for the year. I was up close to $1,500 for the year, but am only up about $350 as I write this post. But I collected a decent amount of premium to assume this risks and was prepared for it. With the PBI dividend coming in a couple weeks and NLY paying me my next dividend in about a month, I should be back up over $1,000.

Look it is slow and steady that wins this race. Like I have mentioned in a recent post, I have set up my portfolio to withstand 15-20% down-moves and still break-even for the year. This have been accomplished through selling calls against my positions to lower my cost basis and the yield from the dividend. Now CLF cut its dividend, so my cushion shrunk a bit there. Just one last note, if you want to see what I did to other positions I had or have blogged about recently, go back to their original posts and read the comments. On that same note, it may be worth subscribing to the comments for anyone trade if you wish to follow the evolution of it.

Good Luck Trading!

Positions in: CLF, INTC, JNJ, MSFT, NLY, PFE, and T


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