Stock Market-Record Highs-2nd Chance Coming?Read On
February 5 2021 Option Professor Opinions & Observations
Greetings…What a Week!!….The market was tanking over last weekend with the S&P hitting 3650….then we got a turn and we popped thru SP 3740 to move to SP 3800…then we broke that resistance and made a play for the highs at SP 3860….only to finish the week at RECORD highs and blowing out all the shorts with stops above SP 3860……news of the Dems plowing the $1.9 Trill recovery package thru got the bulls running & bears running scared. We have been telling readers about yield curve steepening (banks) and the tightening of oil supplies (XLE) and that theme was golden this week. But in this market…pin the tail on the donkey works as a rising tide lifts most boats. The VIX is back down toward 20 area which has corresponded with highs in the markets (as 40 has been bottoms)…..and Nirvana is a great state of mind but as it relates to stocks..no much of a history. The unemployment report showed the recovery is fading and the trees don’t grow to the sky. We have said a rally toward 3900-4000 SP was a real possibility as seasonality and earnings would be powerful to start the year. We also feel that by the end of Q1 and then Q2 prices could be quite surprising & substantially different. We are not Carnac the Magnificent but we do see the potential for the winds of change to blow as a shift from unbridled optimism (now) moves closer to realism (next 60-120 days). So we see a potential dip followed by a short term top by EOM…..followed by a sharp drop next month toward the highs of Sept/Oct…..followed by and advance toward the lows of last month….followed by lows by the end of Q2 at levels that test long term monthly moving averages. HOWEVER all of this will need to be confirmed by price so for now we see parameters of SP 3800 area on the downside and SP 4000 area on the upside and a meaningful break of that range may either confirm our best guess or require a huge re-examination of our price and time prophesy. Bull & Bear arguments can always be made but the level of speculation…bullishness…valuations…VIX.. uncertainty…distance of stock price from moving averages tells us that it’s time to remember Bernard Baruch & Warren Buffett (Buy Straw Hats in the Winter & Be Greedy When People are Fearful & Fearful When People are Greedy). We have specific opinions on ways to create income…growth and speculation…Learn How To Subscribe ..email [email protected]
Well the Gamestop story ended this week as we explained last week by falling 80%….the more we hear about the Robin Hood situation the less we like it…..selling order flow (outlawed in Canada Australia India & UK as problematic)…..margins & settlements…majority of business in options (speculation) not investing….could be a clamp down on coordinated price manipulation, suitability issues, and other regs so that social media can be used but not without boundaries nor responsibility..better long term for all. Speaking of regulation…the incumbents of such moves generally are the winners as newcomers have a hard time complying and competing…so look at the big to get bigger meaning our view is FB AMZN GOOG MSFT will come out the other side of all this banter the winners. Next week we get more EARNINGS from Soft bank KKR DD CSCO (great week!) Lyft/Uber GM Toyota MGM (gaming!) KO UA (great week!) PEP Kraft Expedia Astra Zeneca DIS (strong on D-Plus/Sports/Open Theme Parks)…..You can Receive our own Focus List.. Learn How to Subscribe @ [email protected]
Yields are Rising and Yield Curves are Steepening…something we told our readers for the last 9 MONTHS…..so selling long term bonds and buying the banks has been the way to go…our subscribers get specific details of our Focus List….AAPL is borrowing because some morons are lending money for decades UNDER 1%!!…TLT gave a recent sell when it broke 155 but really we told subscribers that the blow off top in March may have been the antithesis of the top in rates during Volker’s time. We told readers to look to tax free Munis as higher taxes and state relief bodes well for them….short term corporates have served us well as short rates are under the Fed’s control. We also said sprinkling High Yield Preferred and EM Sovereign Debt could work…we have a Focus List for Income..Learn How to subscribe–email us.
US Dollar/International Markets
We got this one right as we got negative on the DXY in the 104-100 area and short term positive in the 88-90 range…were bullish on the Aussie/Euro/BP ect at lower levels and warned of a pause to refresh (now)…..In the last few months we spoke of Latin America (it rallied) and the break to the downside of BABA at 300 (fell to 215)….also the great values in Europe (Draghi’s back!) while the weaker dollar would send EM soaring (it did)…..we will be informing subscribers what we see next…email us and Learn How to Join.
Crude Oil/Natural Gas
We’ve been bullish oil for 9 months as we saw a -37 as capitulation…OPEC keeps supplies tight…lower rigs & fracking..return of demand…no private equity $$$..we liked the upside and were rewarded…SLB CVX COP PSX VLO HAL OXY..common stocks..the bonds where yields were huge (non callable OXY 10 yr @ 35%!) Natural Gas has been a favorite with stocks like LNG…we have new ideas so Let us Know… Learn How to Subscribe @optionprofessor @gmail.com
Gold Silver Copper Platinum BitCoin
Gold & Silver tanked this week (Silver had a short lived ill advised short squeeze) BUT they did hold & bounced off support at 1776 Gold & 26 bucks on Silver….Platinum we believe could offer the best value as it is 10X rarer than Gold and trades at a huge discount (+34 bucks Friday)..it’s still a bull market in but the problem is the parabolic moves earlier this year created excesses (away from moving averages) that still are being worked out…so could have another leg down BUT if we clear 28-30 Silver and 1950-2000 Gold…forget about cutting bait.. time to fish! Copper had a huge run which we told you about at 2.50 but has taken a pause to refresh with it some of our copper successes (FCX) but we talked of hedging gains with collars married puts and replacement option trades….LEARN more & subscribe to get our Focus List….BitCoin was someting we brought to your attention (GBTC) at 10-15 and it went parabolic…we warned that 2% of accounts control 95% of supply (illiquid) so 30-50% corrections commonplace…we got one and now it’s off…Learn where we think it’s going….subscribe today!
Soybeans Sugar Coffee
We told readers about Soybeans at 8 bucks and it ran to 12…then to 16…pull back to 13..now back up but still way away from moving averages (all grains)….so we have levels that we are monitoring plus China moves….Sugar has some supply problems out of South America & oil rising is bullish as well..we’ve been on it since 12.30 and remain bullish….Coffee was a big runner earlier this year and the big run will occur when we break 140 as that seem to be a level holding it back…..we update subscribers on our calls for these so Learn How you can Join Up…email us,,,by the way there is an ETF in the Commodity sector that is up almost 50% from it’s 52 week lows….What is it?….Subscribe Now…..email us & Learn How!
REMEMBER There is a substantial risk of loss in short term trading and option trading and it is not right for everyone. Consult your brokerage firm/broker/advisor to determine your own suitability. Past performance is not necessarily indicative of future results. Use Risk Capital Only.