Stocks-Bonds-Metals- It’s Time to Re-Price Markets-Read On

February 19, 2021 Option Professor Opinions & Observations

Hello Everybody!….Will we RE-PRICE after the substantial change in interest rates and seasonality? We are entering the last week of Feb to be followed by the Ides of March when sometimes rather violent swings can occur as the January Effect wears off and certain realities start to rear their ugly heads before spring. We read and listen to everybody we believe has merit and then reach our own conclusions (suggest you do the same)….some cycle guys think we have seen a peak at Dow 31700 area and that March starts the first leg down. There are others that see one more run at the highs followed by a sharp decline. We have heard buy the pullback don’t chase the tape. We see a continued unwillingness for sustained moves on the VIX under 20….we see P/E ratios called into questions as the 10yr Treasury yield hit 1.35% at breakneck speed…..we see divergences between RSI’s and the new highs…plus complacency/bullishness/speculation rampant. In the last few years the March-April time frame has coincided with declines so we respect that potential. We have stayed bullish on banks & energy and have been rewarded…..we have stayed with value for dividends & capital catch up.. again a good idea….we have avoided the boom bust stuff (gamestop/pot) and avoided duration risk which we said would come with a steeper yield curve. International stocks have been good to us as Europe/Asia/China have all benefited from our consumer’s buying binge but a pause to refresh may also be on the table for them. We are ready with our defensive tactics like trimming, collars, covered calls, married puts, replacement trades using call spreads and more….levels like S&P 3850 & 3800 & VIX 25 are big and could tip the boat….the next few weeks may be binary….big up or rollover..We do have tactics to share with [email protected] [email protected]

Stock Market

WOW lots to cover here this week as the FANG lost steam while regional banks, energy, copper & rare earth metals, block chain (RIOT), Chinese Internet, Transports & small caps rocked on. We have ideas in these and other areas for subscribers. Cathie Wood took a shot at Palantir and those shares jumped…Wells Fargo (one we got bullish at 25) jumped as regulators are calling off their dogs….HLT..Bookings..Cruises…and a lot of other epicenter stocks we brought to your attention zoomed as vaccine infection news greeted with a glow. Canada’s launching a ETF on BitCoin (our flavor has been GBTC as readers know)…Boeing CAT DE Twitter all made highs and the gaming stocks we spoke of (DKNG PENN LVS) all went on runs. We have ideas currently….subscribe at [email protected] & Learn

Bond Market

We spoke to you about rising rates and steepening yield curve and how that would fuel banks & regionals & value stocks….exactly what happened….a break under 155 TLT was the final card to fall since the generational top at 180. Powell & friends talk this week and that could calm down the parabolic ascent (% terms) that went on this week but people seem comfortable with 1.5%-2% 10 yr yields as a forecast for 2021 as a robust GDP coming has inflation-growth-stimulus hawks on the edge of their seats..rightfully so! Keep your duration short and pepper the portfolio with high yield EM debt preferred and floating loans but avoid duration where a big bad wolf lives. We have ideas on fixed income..learn how to subscribe…send us an email

Us Dollar/International Markets

Subscribers and regular readers know our position on the US Dollar has been negative since DXY topped at 104 & broke 100 as printing press Fed & our yield advantage going out the window were the main culprits BUT we still have the Fed going nuts (Fed balance sheet at record approaching 8 Trillion) yet the hike in yields had put our yield advantage back in play and so far 88-90 has held. The Yen Euro Aussie & Pound Sterling has remained firm and look like they’re ready to roll..but IF DXY breaks 92..things change. The international stocks have been a favorite of ours as we told you the world is feeding on exports to us and our consumer spending…also global valuations are much more attractive and they’re stimulating as well BUT at these levels we could see some give back as we are extended above MA’s.. Learn our Focus List for Europe Asia Latin America…subscribe today!

Crude Oil/Natural Gas

Well we have been bullish this sector since March and the more real it gets the more they pay…throw in an ice storm in Texas where supplies are cut and you get a heck of a profitable scenario!….Carl Ichan jumped into the game with FE this week to go along with Buffett in OXY and many many more we told you about….caution in that weather will change soon and supplies will be restored so expect volatility but longer term PE money has left the building so demand + tighter supply = a bright future potentially. Our natural gas pick has been LNG and no reason to jump that train yet. We have a Focus List for subscribers…inquire at [email protected]

Gold Silver Copper Platinum BitCoin

Same story we have has on Gold & Silver for months….relax prices aren’t going anywhere until the MA’s catch up with the price that went parabolic last year (down 6% in 2021)….HOWEVER….if Silver can break $30 and Gold $1950 the winds of change may blow quickly….SUPPORT on Gold $1630-1775 and Silver 22-24…GDX $30 bucks…so we are getting closer to better values.. the 1 yr MA is around $1825 so a close above that would wake us up a bit. The price of copper has been an all star as demand totally dwarfs supplies. We have told readers of FCX & SCCO for many many months..they still shine Platinum has been our dark horse as we believe it’s scarcity will lead to a squeeze in price should the auto industry demand for catalytic converters jump in Q3 Q4…up 25% YTD..not bad. BitCoin keeps getting more strret cred by the day BUT you still have an illiquid market so while we told you LAST YEAR we believe the the year after halving is huge upside and 100k+ possible…we respect 30%-50% correction will come…then add spec funds We having mining shares & other plays on our Focus List…so consider learning about subscribing..inquire @ [email protected]

Soybeans Sugar Coffee

The three amigos are trying to make headway as we believe supplies are tight and demand is good. Sugar hit 17 (we told you be bullish since 12.30) and Coffee has held support at 100-110 and this week hit 130 (if it blows thru 140 it may be in the news) and finally Soybeans biggest problem has been its success as the move to 14+ from 8 has been swift and the technical overbought condition is still being worked off…..we inform subscribers on ways to play this with ETF’s and mutual funds like Vanguard’s VCMDX which has off to a great start. SUBSCRIBE @ [email protected]

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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