Stock Market- Up Week-Bad Week- But Hopeful-Read On

January 8 2021 Option Professor Opinions & Observations

We told you last week that this would be a BINARY WEEK due to Georgia elections…the certifications…Trump Disruption…the Jobs Report ect. but we did not know if would pit Life against Death and Good against Evil! We did however have BINARY stock prices as the S&P started the year with a bang as we expected adding over 150 points for the week! The Q’s added nicely and the Russell & Transports followed suits….all even though the jobs reports was very disappointing. The seasonals…sideline money…T.I.N.A and Blue sweep (more stimulus) have the flows looking good and may see a SPIKE in the next two weeks and stay good until late Jan or thru March depending on 2 main things…will the vaccine be distributed and be effective and will the steepening yield curve usher in lower PMI’s (good historical barometer) and get people freaked that we are going back into recession. Israel should be watched closely as they are way down the field in widespread innoculation…so if they see cases rise AFTER inoculation then Operation Warp speed could turn into operation warped mind. The key ahead is monitoring the VIX which was in the 30’s this year and only the 3rd time that’s happened….in the subsequent year the returns on stocks have been good (20%+) so expectations for 2021 remains good with an EXPECTED sharp correction in Q2 after this run dies out….only to finish the year with a bang….that’s our tea leaves currently and for now that’s our story and we’re stickin’ to it:)…..we had a great 2021 forecasting operational leverage as the key to higher stocks since March…the turn in oil…the peak in Gold..the turn inthe Dollar….the big opportunity in Value/cyclicals & banks and much more..we’ll give you our best shot in 2021..we anticipate some volatility but a net net good year…and you can get our Radar List weekly email [email protected] learn more

Stock Market

Rising tides lifts all boats could be the best description of these markets and we have a group of ETF’s..stocks…both Domestic and International so just email us to find out more BUT the Value Banks Cyclicals Epicenter stocks are still our favorites but some tech is OK….we like getting paid to watch the movie (dividends) and as the year goes on this UNCROWDED trade we began last year will garner popularity with the sideline $$$$. Covered calls, Collars, Married puts, Replacement trades using calls & call spreads are on our radar when the time comes…learn more email option professor

Bond Market

Well the dam broke and there’s water all over the place (or is that blood?) as TLT took out the 155 level and almost hit 150 as long term yield rose steepening the yield curve (we told you this would happen) and negative real yields are still at multi year highs. Now the key is will it be orderly or will we see a sharp jump in yields? Our plan has been and currently remains short term corporates peppered with Tax Free, High Yield, Secured Loans, Preferreds amd Emerging Market Sovereign Debt..so far so good.. if you have questions on fixed income/peek at our focus list……email us

US Dollar/International Markets

We told you the 88-90 area on the Dollar Index could be short term support and it has been as we hit 89.25 but closed above 90….maybe a changing of the guard on Jan 20 is encouraging some and the spikes in Europe and troubles in China (Where’s Jack Ma?) has people leaning toward the greenback or covering shorts. Longer term the negative real yields and deficits from persistent needs from the unemployed/infrastructure deal throws cold water on rallies. The Euro-Yen-Aus$-BP all have had substantial rallies so a pause to refresh should be expected. International Markets; as we told you are fertile grounds for appreciation as their valuations are much more attractive…so from Asia to Europe to Eastern Europe and Latin America…we are in tune with it all….email us if you want to hear our picks

Crude Oil-Natural Gas

The oil stocks and the ETF’s we follow had a good week and the Saudis unilaterally decided to cut production..all good stuff…we believe and have bben telling readers since -37 barrel that the future demand from travel/jet fuel and the rig/fracking gap will lead to better prices in 2021 so if you want to know our opinion on how to play it let us know…Natural Gas sold off from 3.25 to 2.25 and have recovered to 2.65…always a wild ride for the same reason as BitCoin..lousy liquidity..BUT..our opinion is you play it with LNG and we said 50+ was the entry point…closed at 64…not bad…

Gold Silver Copper BitCoin

We told you that if Gold could not maintain ABOVE 1950 and Silver ABOVE 28 that this thing could turn south as the dollar stabilized and the fear gauge a come way down PLUS we told you the moving averages START at 1775 and the longer term ones are substantially lower….MEANING that we may have more wood to chop so the averages catch up to the prices which can take TIME…but tangible assets still have a bright future but nothing to miss here until those price ceilings breached. We’ve got ETF’s & stocks in the metals on our focus list. Copper prices remained firm as expectations for infrastructure running hot…new highs this week at 3.73..we’ve been on it since 2.50 and on FCX & SCCO all year long-regular readers know-email us BitCoin continues to go nuts on the upside as 95% of all supplies are controlled by 2% of anonymous accounts…the year after halving (e.g. 2017) is great for these guys so some expect 3X this year whilst others warn that if stocks correct 10+% later this year BitCoin could drop 30-50%Caveat Emptor

Soybeans Sugar Coffee

We told you about Soybeans in the first half of 2020 in the 8’s with China buying coming..then a break above 9.50 set up a move to former highs at 12…the pullback and subsequent break of 12 gave a new buy signal and now we are at 13.76…Argentine has some problems with their crop is the word…200 day moving average is 9.70..time to dust of trims/hedging tactics? Sugar prices got bullish at 12.30 and ran and pressed 16..it failed to hold and now is at 15.54…could be a false breakout or natural pullback.. should know next week…Coffee has major support at 100-110..ran to 130 and turned down to 123…the big money seems to be on the other side of 135-140

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

Jim Kenney
 

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