At this point 2012 is one year where "sell in May" looks like a good strategy. The market is down three weeks in a row with the S&P 500 down almost -9% from its 2012 highs. We are definitely at oversold levels. While a bounce should show up sooner rather than later it's probably not a bottom.
On Monday, May 14th the plan was to take profits in our EBAY 2013 Jan $40 calls and sell half of our KO 2014 Jan calls at the open. That proved to be a good move. Unfortunately, we lost DOW, LVS, and MMM, which were all stopped out this past week.
Investors will want to double check their stop loss placement since so many stocks look poised for more weakness.
I have updated stop losses on: MCD, a new addition from the watch list.
Disclaimer: At any given time the author may have positions in any or all of any companies mentioned in the Leaps Newsletter.
--Position Summary Table--
Table lists Directional CALL or PUT/LEAPS only.
Insurance puts, if applicable, are not shown.
Red symbol/name represents a play or option position exited or closed this week.