We’ve seen quite the reversal in the stock market over the last several trading days, which saw the market down four of the last five days. In that time, the Dow Jones Industrial Average and the S&P 500 have fallen nearly 2 percent, while the tech heavy Nasdaq Composite Index is down more than 3.5%, thanks to renewed concern with Apple (AAPL).

There are several reasons behind this shift, including last week’s expected, but still disappointing, domestic March quarter GDP print of 0.5% as well as yesterday’s weaker than expected ADP Employment Report. Data from ISM and Market Economics also pointed to another poor month for the manufacturing economy in April.

In other words, much of what we’ve been talking about in the Monday Morning Kickoff over the last several weeks has come home to roost.

Over the past few weeks, as we watched the market melt up, we added our inverse ETF insurance positions, and we are now seeing the benefits they bring. Based on the lackluster job creation data for April evidenced in ADP’s report, which was the lowest in three years, and weak employment internals for the April ISM reports, we will keep our inverse ETF positions in place heading into Friday’s April Employment Report.

DIS stopped out; Trimming back the profitable TLT call trade 

The downside for us in this market move over the last few days was having the Disney (DIS) May $105 calls on the Tematica Pro Select List stopped out at $1.60. We eked out a tiny profit on that position, but that paled in comparison to the pop in the Select List’s iShares Barclays 20+ Year Treasury Bond ETF (TLT) June $135 calls, which closed last night at 0.68, up 58 percent from the $0.43 entry point last week.

Given the current market mood, we will prudently sell half the TLT June $135 call position and boost the protective stop loss on the remaining calls from $0.30 to $0.55. At that level, even if the roller coaster ride returns to the market, the balance of the position should return a minimum return of 28 percent.

Watching Costco’s April Results For What’s Next

Later this morning Cash Strapped Consumer play Costco Wholesale (COST) will share its April same-store-sales growth. Given the trend in Retail Sales and Personal Spending data over the last few months, we added the COST position given the company’s continued ability to capture consumer wallet share.

The COST May $160 calls have been weighed down by overall consumer spending concerns that have once again bubbled to the surface. Amid the market melee this week, we are starting to get April same-store-sales data from a number of retailers. What we’ve seen thus far from Cato (CATO:Nasdaq) and Buckle (BKE:NYSE) in the form of severely missed results relative to expectations is bound to re-ignite concerns over consumer spending. The recent downside guidance issued from Big 5 Sporting Goods (BGFV:Nasdaq) is also bound to fan those flames.

Lumping Costco in with all other retailers is the flaw of a sector-based investing approach. As we know, when we use our thematic view and look at COST from a Cash-Strapped Consumer perspective, we see it as being a critical option the consumer will utilize to make their dollars go further and expect to see same store sales for the warehouse giant go up. We’ll see if we’re right when Costco releases April results, and depending on the data we could look to scale into the position, which would lower our cost basis for the calls that expire later this month.

Possibilities Brewing with Under Armour (UA) Calls

Even thought the current environment has us holding off adding a new position to the Tematica Pro Select List near-term, we continue to look for new opportunities. The recent drop in Under Amour (UA) shares falls into the category and we are keeping close tabs on it. As we discussed in a recent Tematica Investing, we like the company’s growing position in the athletic apparel and footwear business and see its strategy that targets International and women’s markets as paying off significantly longer-term. UA is clearly a beneficiary of the Rising Middle Class aspect of our Rise & Fall of the Middle Class investing theme.

Even though we have seen this strategy pay off significantly for Nike (NKE) and others, the tougher part to swallow with UA shares is the valuation. The near 8% drop in the shares yesterday, however, takes the edge off that and makes for a potentially interesting trading opportunity with the June or July calls. We’ll have more on this as we finish up our analysis and distill data points from earnings reports from Big 5 Sporting Goods (BFV) and Gildan Activewear (GIL) that hit this week.

Recap of Action Items from this Week

• Sell half of our position iShares Barclays 20+ Year Treasury Bond ETF (TLT) June $135 calls, while boosting our protective stop loss to $0.55 from $0.30 on the remaining half.