I have some bad news. Dot has retired as the writer for the Couch Potato Newsletter. After years of excellent play picking we are all thankful for her wit and perception. Until I can hire a new writer to fill her overly large shoes, I will be taking over the weekly duties.
The schedule is going to change. As you know, I have a lot on my plate and every newsletter takes a different focus. I try not to do multiple newsletters on the same day. Initially Thursday will be the new newsletter day but that does not mean we will not have emails on other days as opportunities become available.
The selection process for CPT positions is a little more complicated than a regular directional trade. Ideally, we would like to have a non-directional stock or index. Given the recent market, I want to ease into some new positions rather than add a bunch on one day only to have the market drop or spike 500 points the next day. Until we ease out of this period of volatility, we need to take it slow and steady.
I believe the volatility will be over soon. The formal announcement of the tariff details today ended a week of rampant speculation. They were weaker than expected and the "global" tariffs turned into a long list of exempt countries and countries that could apply for exemptions. Investors should be breathing a sigh of relief and hopefully next week will start a new chapter in the market We still have a few days before the Fed announcement on the 21st and that will give the market time to adjust to normalcy. The outcome of the meeting is already known so there should be no surprises.
Once the market calms somewhat we can get a little more aggressive with our positions.
Enter passively, exit aggressively!
Send Jim an email
NEW NON-DIRECTIONAL PLAY
CMG - Chipotle Mexican - Company Profile
Chipotle Mexican Grill, Inc., together with its subsidiaries, operates Chipotle Mexican Grill restaurants. As of December 31, 2017, it operated 2,363 Chipotle restaurants throughout the United States, as well as 37 international Chipotle restaurants; and 8 non-Chipotle restaurants. The company was founded in 1993 and is based in Denver, Colorado. Company description from FinViz.com
Earnings May 8th.
Chipotle has a new CEO and investors are hopeful for a turnaround but skeptical that anything will happen in the near future. The stock declined sharply in the market correction but has rebounded to $321 and has been trading there for the last three weeks despite some market volatility. I am hoping this dormancy continues for several more weeks. The $320 level has been the midpoint since September.
Sell short Apr $260 put, currently $.50
Buy long Apr $250 put, currently $.40
Sell short Apr $360 call, currently $2.40
Buy long Apr $370 call, currently $1.65
Net credit 85 cents.