Author Archives: Jim Kenney
Author Archives: Jim Kenney
April 30 2021 Option Professor Opinions & Observations
Greetings!….We spoke in Mid April on the run up to S&P 4200 and rallies into earnings that HEDGING tactics may be in order. These tactics included covered call writing, protective collars, married puts. trimming and replacement trades using calls & call spreads. If you are unfamiliar with these strategies and do not know how to adjust these tactics once the market goes up or down…we suggest you go to optionprofessor.com/subscribe and get educated and ask your questions. Last week we said that we may in a binary situation at S&P 4200 in that if short term peak growth and peak earnings plus valuation compression were to prevail…then a correction spoke of by many big firm talking heads could occur. While this appears to be the case after this weeks price action….like college football announcer Lee Corso says….NOT SO FAST!…..we say this because IF Covid vaccinations start hitting 40%+ and the reality of open ended Fed accommodation plus fiscal-monetary- human (pent up demand) stimulus & household liquidity comes roaring back in May….the move to S&P 4300-4500 is not off the table but obviously must blow out the highs created this week first. Nine months ago we didn’t have a vaccine nor much of a steep yield curve nor a VIX UNDER 20 but we said they were coming. We said the Value stocks, Dividend paying stocks, Banks, Energy, Industrials, Materials, Consumer Discretionary ect. were the place to be. Now 95% of all S&P 500 stocks are ABOVE their 200 day MA’s & 90% are beating earnings estimates due to OPERATING LEVERAGE we spoke of long ago. Inflation numbers are picking up and we expect will expand (but with terrible money velocity may not last) and the yield curve will steepen by the June Jackson Hole Fed meeting (5yr-10yr spread is at 75 and should be 100-125). Where does investor positioning make sense now and what markets around the world may advance as they unlock and get vaccinated? Good question huh? Well we invite you to our site optionprofessor.com/subscribe you can see our PORTFOLIO ROADMAP & FOCUS LIST and get weekly updates!
Personal Income jumped to a record and some say there is a Silver Tsunami coming of people turning 60+ who may make RV’s, Boating (owner/part owner/and mountain bikes (outdoor activities a fertile ground. High Valuations were hurt by RISING RATES which may continue. Apple & Autos may be getting hurt by the chip shortage as AAPL wanted no part of the 140’s & GM wanted no part of the 60’s…let’s see. Drug companies like AMGN MRK PFE JNJ BMY got whacked but some say buy the tip-dividends and valuations. Industrials (BA HON) faded too but that may be short lived. Ditto home construction (ITB) which is on fire as people don’t want to sell their homes and millennials are tired of their parents basement:) . Q1 & Q2 comps on earnings are a breeze as the first 6 months of 2020 were a disaster but no problem for the national monopolies such as GOOG FB (search/social media) AAPL (tech) AMZN (e-commerce) MSFT (cloud) FDX UPS (delivery) among others crushed it. People seem to be eating out (QSR MCD YUM YUMC DRI) and Consumer Discretionary may not be done yet (VCR). Elective surgeries are coming back (SYR MDT) and the proliferation of streaming hurt growth at NFLX. With movies back on a roll and amusement park reopening.. a peek at DIS CMCSA SIX AMC makes sense. There is a lot to consider and not all of it is good. The Merry Month of May (Camelot) promises to be a potentially wild one so educate yourself! Go to optionprofessor.com/subscribe and learn what we feel are solid asset allocation choices right now.
Rates started to drift back up as we got very strong (expected) data and the Fed has made itself as clear as a bell. They are outcome and data driven and so forget your theories (dot plots) and focus on UNEMPLOYMENT INFLATION & SUSTAINED INFLATION until further notice. They put this plan together over 5 yrs and are not going to throw it out the window like a speculator. As we said above; the 5yr – 10yr spread suggests it should widen which could mean a drift higher in yields. Steeper yield curves and a strong economy flows right into our scenario of where to position for INCOME. Junk Bonds had the biggest month ever in April and the banks have been issuing bonds like crazy (betting on higher rates?) Our best guess is that tight labor markets may fuel wage inflation and steepen the yield curve along with strong data. This is a wave that is really just beginning with a lot of runway. Some feel population growth is shrinking, aging baby boomer continues, technological advances & globalization goes on to lift all boats…so we invite you to go to optionprofessor.com/subscribe & LEARN how to find INCOME thru DIVIDENDS Preferred Munis IG HY EM & More!
US Dollar & International Markets
Our view on the Dollar (DXY) for that last year was that 100-104 was the peak and a sell off occurred when our rates tanked taking away our yield advantage. In comes a rise in rates in Q1 and all shorts got pinched as our yield advantage returned as we held 88 and went 93-94. We then said the break under 91.67-91.53 was no good as we could see a Golden Cross to the downside. We sold off and this week bounced up to close at 91.29 DXY. If we clear 91.70 & sustain a move back to 94-96 is possible buy our feeling is with the recoveries later this year in Europe and EM plus the deficits and Fed policy may force the Dollar to slide further. Internationally; we have strong opinions in Europe ( UK Germany France Spain ect.) & Asia plus Emerging Markets-Mexico Brasil Chile–there is a lot to LEARN about here. Go to optionprofessor.com/subscribe and LEARN what the Option Professor sees for opportunities right now.
Crude Oil/ Natural Gas
Crude Oil is benefitting from expectations of a demand boom worldwide as we reopen the economies. We have been bullish on this area since LAST YEAR so no surprise here. XOM & CVX both made money & CVX hiked its dividend. Always back & forth action but from the drillers to the servicers to the refiners we have ideas to share with subscribers. We told you weeks ago that Nat gas bottomed at 2.50 (closed at 2.94) and LNG at 70 (closed 77 1/2) so we’re happy! Take the time to go to optionprofessor.com/subscribe and LEARN what’s on OUR FOCUS LIST!
Gold Silver Platinum Copper Bitcoin Ethereum
Well one metal we saw this week made RECORD HIGHS which was Palladium which we hope is good news for platinum as they compete in the catalytic converter space. We told you a TRADEABLE low for Gold Silver Platinum happened in March at $1675 $24+ $1000+ and rally they did. NOW we need to use the Missouri slogan (The Show Me State):) We need to clear the highs of April to keep this turnaround alive. Good News is the inflation numbers are picking up and the FED will not raise rates anytime soon. Bad News is MONEY VELOCITY is a joke (low) and you can print all you want but if people deleverage and save and avoid credit card use/loans (they are)…then inflation will be TRANSITORY. We still don’t know how much Crypto stealing from the metals as a store of value but maybe more than we think. We do expect big things later this year and later this year is coming on fast. We follow the metal mining shares and other ideas for subscribers. Copper is the Kingfish this year as demand from housing, infrastructure and EV’s outstrips supplies by a lot. Be careful up here as we have come a long way.. we told you about FCX & SCCO last year-BOOM! We told subscribers about Bitcoin (GBTC) and Ethereum (ETHE) and the year after halving is boom times BUT to use 30%-50% drops (we just had one) as entry levels RISK CAPITAL ONLY. We think ETHE is a double play on digital currency and programmable block chain. This stuff is backed by confidence so if people ever lose confidence it’s over Go to optionprofessor.com/subscribe and LEARN our views and forecast & our FOCUS LIST & ask questions as well!
Soybeans Sugar Coffee
We told readers about these bull markets since last year and now we have BACKWARDATION in some of these markets suggesting very tight supplies versus strong demand (if you don’t know what this means-another reason to subscribe) Since we got bullish on all 3 markets so long ago….and the markets up here in the ozone…..it’s boom or bust time.
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. Opinions & Observations provided for INFORMATION PURPOSE ONLY Use Risk Capital Only
April 23 2021 Option Professor Opinions & Observations
The Option Professor is a graduate of Boston College and has decades of investment experience. He has instructed thousands of investors worldwide on the Uses & Risks of Investing.
Welcome Back!….This week we had a big sell off when Prez Biden said cap gains tax could go to 43%+ top levels (54% NYC)…which sent the bears roaring only to reverse course by Friday. We spoke of exploring hedging tactics (if you don’t know what that means…another good reason to SUBSCRIBE) at the highs around S&P 4200 last week. Still not a terrible thing to consider with the caveat that you know how to adjust your hedges if need be. There are a number of things that have cause CHRONIC CAUTION in many investors and institutions and they include virus spikes, higher taxes and nosebleed valuations. This has kept more money out then ordinarily would occur with these earnings and economic numbers hitting the roof. So here’s OUR TAKE….the companies have adjusted their structures to reduce expenses back to those a decade ago…..many companies have top line revenues starting to come in gang busters as we reopen….if you takes expected revenues and match them to OPERATING LEVERAGE you have a scenario where the shock factor may come in the way valuations are actually reasonable and may very well expand in financials material industrials energy and value/cyclicals. We share where & how to set yourself up for this to SUBSCRIBERS of our newsletter. We have all over the Europe opening by Labor day and EM by EOY plus a belief that if we get vaccination up to 60%-70% herd immunity kicks in and we’re home free. We also SHARE how to participate in these areas. The next 2-4 weeks could be very exciting and if the VIX stays contained to 12-20….a 5%-10% rally by summer not off the table. We have ideas to share on positioning for the USA. Europe and Emerging Markets & Tangible Assets. Subscribe Today!
Briefly; the sectors we are focused on in Value Cyclicals Materials Industrial Health Care Financial & Energy are still the places to be as longer term Growth could very well be challenged by higher interest rates and an INFLATION SHOCK. In the weekly newsletter we SHARE with subscribers ways to position in these and others so we believe we ADD VALUE.
We told everybody Bonds would rally coming out of the Q1 debacle as yields rose to discount HUGE economic number and Inflation BUT the market is starting to look through to the other side and see a reversion the mean on GDP & Inflation plus positioning was so short it had the bears scurrying to cover…not unlike when the Dollar tanked. We don’t believe this rally will stick so get the newsletter on how we position for INCOME & DIVIDENDS in our opinion & view.
US Dollar/International Markets
We told you last week that the Dollar was skating on thin ice as the 50-200 Day MA’s were inverted to the downside and that te market last Friday closed UNDER both numbers…this week more of the same. OUR TAKE…investors are looking past the noise of COVID in Europe and starting to discount improving numbers in the months ahead. The Euro & GBP both have not had the printing press on as much as the USA and our trade deficit assures us our money is going overseas. China & EM have corrected and it looks like we may see a nice turn plus Europe has much better valuations than we do so the value hawks may be ready to ADD to international exposure..where is the puck going?
We can help SHARE ideas–positioning in these markets Subscribe go to optionprofessor.com/subscribe…Great Value!
Crude Oil Natural Gas
Crude Oil had a correction and then rebounded only to lose some ground this week We were bullish OVER a year ago during the fire sale and SUBSCRIBERS benefited from that information. Still a believer longer term as P/E money rig counts and investment in general suggests tighter supplies colliding with increased demand….We told you about Natural Gas bottoming at 2.50 & LNG at 70 so far so good…We SHARE our IDEAS with Subscribers so Join Up Today!
Gold Silver Platinum Copper BitCoin COIN
We told you the lows of $1675 Gold $24 Silver & $1000 Platinum may be the lows for the rest of the year. We expect an inflation shock by Q3 or Q4 and if the Fed really sticks to no hikes…that’s a metals bull dream. We told you to fade Gold & Silver when it went parabolic but after the correction we have changed out tune….Platinum potential dark horse. Copper demand is off the hook (EV Solar Infrastructure Housing China) as the BEST conductor of electricity. Our views on BitCoin remains that on 30-50% drops you take a bite with risk capital and COIN pulling back nicely. Ethereum is now interesting and we will be outlining why in our newsletter in coming weeks…Don’t Miss It! SUBSCRIBERS get our FOCUS LIST on how to position in the markets and updates on our views…..a Great Value!
Soybeans Sugar Coffee
There are bottlenecks in supply chains in many commodities (lumber ect) and there are weather factors that can come into play…we have told you about these and these markets/ETF’s have been moving to the upside…Subscribe Today!
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 Opinions & Observations are for Informational purposes only.
4/16/21 Option Professor-Opinions & Observations
The Option Professor is a graduate of Boston College with decades of investment experience & instructed thousands on the Uses-Risks of Investing
Greetings!…Well we are running on all cylinders with the S&P closing on an all time high and we’re loving riding the wave. Banks made a ton as we said and more earnings out next week. Banks immediately hit the credit window with RECORD Bond sales…why? Inflation & economic data are thru the roof yet Bond yields declined ..why? Jobless Claims are dropping as we said they would & Q1 comps to last year are not sustainable. Reversion to the mean is a time tested truth in the markets so when we see the market by some models 1 standard deviation overbought & Schiller & Buffett’s valuation metrics in the ozone and the S&P near 4200 with our LT moving averages (1-2-3 yrs) @ 3550-3261-3100 PLUS up OVER 23%+ ABOVE pre- Covid high of 3393….we explore hedges. Learn How To Protect Your Portfolio & Reduce Risk
This week the big story was the banks blowout earning and Coinbase (COIN) coming direct to the market. Profits were huge due to 2 main factors trading and reversing reserves kept for bad loans….both may not be repeatable. The focus then comes to loan demand and credit card usage which both appear soft as many people and corporations pay down debt and don’t need loans as they are flush with cash. The Fed (and us) believe the GDP & Inflation spikes may be transitory and the question up here is will we revert back to the mean in both and will valuations compress. We do get inflation as we come out of crashes (2001 & 2008) which is good for tangible assets. Lumber is going nuts as there is no inventory & houses sell in days above ask (higher prices coming)…look at WFG CFPZF IFPF LPX….while the JNJ bad news is good for BNTX & PFE MRNA..and BOTZ is on a roll-Elliot mgt bought some GSX. Base metals are getting squeezed by demand so CLF X VALE have benefitted while copper is the best conductor of electricity so stocks we told subscribers about a year ago FCX SCCO benefitted from EV Solar and infrastructure front running traders. China’s on fire (GDP 18%+) as well they should be as 75% of all chips (TSM says shortage will continue) come out of there and east Asia…Beijing airport traffic +290%. OKTA deals in identity and internet security and has lots of customers an a potential long runway. Disney (DIS) is comparatively crushing NFLX in that they reached 100 Mill subscribers in 1 1/2 yrs that took NFLX a decade PLUS they have many merchandising-theme park revenue streams to offset the risk of entertainment origination. Clean energy is all the rage so watch ICLN BE FCEL & BLDP. Plug Power (PLUG) may be worth a look after it’s drop. Unusual options activity included VLO as we head into summer driving season. Finally..here’s our take on COIN….they are making money with 56 M users… but were valued at Goldman levels and for the quarter they did volume that the NASDAQ does in 1 or 2 days. Retail trading is 90% of their business with high fess & no regulation (like Fintech that window is closing). To really make it long term they need to be what Microsoft was the cloud…..they need to be to block chain…lending storage.. payments & smart contracts…… if so…a platform for life.
Yields dropped as we said they would as the sell side was way too crowded and now the pain trade is that rates drop. This shocks many but not us a s we talked of adding duration as we came off 2.55% area on the 30yr and for the most aggressive look to zero coupons (Strips). Yield stink in Asia & Europe so we have a natural buyer and our own pensions ect are taking a bite. They can hedge the currency risk and still pocket 1%. The losses in Q1 were unsustainable at that speed so this to us was a no brainer. The Fed ECB BOJ injected $8Trillion during the crisis so liquidity is not an issue. We share DIVIDEND & INCOME ideas with subscribers each week ……. you should Join us & Learn About Income Investing
US Dollar/International Markets
After a rebound rally that we called off the 88-90 area on the DXY…the greenback is skating on thin ice. at 91.53 close. The 50-200day M/A’s are at 91.58 & 91.76 so they are inverted to the downside and we closed UNDER both. The Euro & Pond are gaining steam and if the DXY breaks 91..our yield advantage may give way to our money supply growth (+25%) and our fiscal and trade deficits otherwise a reversal potentially could get us up into that 94-96 neighborhood. The international markets are fertile lands for us a s they got great valuations and are the beneficiaries of our HUGE trade deficit so we see a China/Emerging Market-Asia bounce ….a Europe/Banks pop and a Latin America -Mexico-Chile (Copper) Brazil advance. We have stocks and ETF we share with SUBSCRIBERS so Get Smart Today…Join Us
Crude Oil/ Natural Gas
Crude oil popped back up big time from the 5’s to well over 60 and the refiners are on a roll and expected to fly on demand going into summer. This is old news to our SUBSCRIBERS as we told of this 9-12 months ago! Lot a runway as we re-open with Europe and EM coming after them. We shown you a lot of opportunities from 35% yields on OXY Bonds a year ago to VDE & OIH in ETF land….we have much more to tell and update you on in the months ahead. We told you natural gas was ona floor at 2.50 & now we’re at 2.68 with LNG bottomed at 70 which hit 75 yesterday.
We share OUR FOCUS LIST & PORFOLIO ROADMAP go to optionprofessor.com/subscribe $49mo or $297yr peanuts!
Gold Silver Platinum Copper BitCoin COIN
We told you Gold $1675 was the low and $24 area for Silver Platinum $1000 area…..we said the easy lifting was done on the quick bounce and we needed proof of sustained strength…we got that in spades this week and loved the rides in GDX GDXJ SIL SILJ KGC and a whole lot more. Copper is the new oil as it is used in EV’s Solar Infrastructure and is the best conductor of electricity (remember the movie Moonstruck:)….FCX & SCCO are ones we told you about last year a peanut levels…now they’re like badmouthing Santa..a gift that keeps giving…Goldman Sachs says more to come. We told you BitCoin was going to have a monster year and to buy 30%-50% corrections which have seen and will see again..risk capital & now look to COIN when it washes out the flippers….GET OUR FOCUS LIST….real interest rates are negative and the PPI & CPI numbers are going thru the roof….a better environment for metals you will not find,,,,,
Spend a little money an GET OUR FOCUS LIST on metals and mining shares…..by the end of this year…could be huge Go to optionprofessor.com/subscribe $49 per mo $297 per yr…NOW is the time to look toward tangibles/international
Soybeans Sugar Coffee
Grains have been strong on drought concerns and demand as we told you of big potential going into planting and growing seasons dead ahead. Soybeans started to breakout we’ll look for follow through & Sugar’s correction appears over with Coffee still looking to break 140 for the big bucks….we have ETF’s we share with SUBSCRIBERS to play this…..
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. Opinions & Observations are for informational purposes only.
April 10. 2021 Option Professor Opinions & Observations
The Option Professor is a Graduate of Boston College and has Decades of Investment Experience. He has instructed Thousands of Investors Worldwide on the Uses-Risks of Investing
Welcome Everybody….First Off…. We would like to extend a Thank You to all the NEW & Existing Subscribers to the Option Professor Newsletter….the idea is to ADD VALUE each week! Last week ended with a bang as there seemed to be a rush to get in BEFORE earnings start coming out next Wed.. We start out with JPM WFC & Goldman followed by Black Rock Citi USB & B of A and we close the week with State Street & Bank of NY Mellon. These guys should be making tons of money from trading, steepening yield curve and finance (IPO’s thru the roof), On top of that; they set aside a ton of money for loan losses that haven’t materialized and Fed say they can buy back stocks June 30. On top of that; OPERATING LEVERAGE should be evident as you can see their branches are empty and Samsung gave an example recently (Revenues +17% Earnings up 44%). Institutions have been cautious on stocks (fear of strains & higher Taxes) but the stock stampede we spoke to you about 200 S&P points ago could become a reality more than we saw already. ISM numbers were a blowout on durable goods but what happens if the service sector kicks in? Inflation is zooming as PPI was up 1% (double forecast) annualizing out at 4.2% (most since 2011). Here’s the rub….some say we will get a push as the euphoria of the reopen hits then die down (think of horses coming out of the barn–runs wild then calms down) …. others say inflation will be sticky due to supply chain bottlenecks and Clarida of the Fed says that if it persists thru yearend it must be dealt with at that time. Now we get the idea the Fed is going to become reactionary and outcome based. We are involved in an experiment with monetary & fiscal policy….it’s like the USA has a credit card with no limit and they never have to pay the balance…if offered that card…would you ask.. What’s the Catch? So we enjoy the ride in our value, cyclicals, banks, consumer discretionary and big name tech BUT we are aware that the VIX is OVER 25% higher in the July contracts than the front month which suggests that the bet is volatility (a correction/pause to refresh) is coming. We all know about valuation by most metrics is hot and put/call ratios & AD Line/ investor sentiment is elevated. Credit Spreads (difference between High Yield & Treasuries) have broke UNDER 300 basis points and the history of that is a buy signal for bonds but not good for stocks (2007-2018). Elon Musk asked Cathie Wood about valuations (like asking Jack Niklaus if he likes golf:). She indicated that the GDP is outdated (is much greater than reported) and inflation is much lower than reported based in part from productivity gains. Side line cash…institutions playing catch up…passive investors (people who buy at intervals regardless)…global….lots of $$$ to chase it BUT we have been around long enough to know 2 things-DON’T Fight the Fed or the Tape & The TREES Don’t Grow to the Sky…so we ride the wave and look for formations that would indicate exhaustion…to SUBSCRIBERS..we provide opinions on Diversified Positioning which is really the way to attack this market….be aware of your hedging strategies so that you know how to protect your portfolio against declines. Some say we top at S&P 4130-4200 others say S&P 4350-4450….the further you get above LT MA’s (95% above)..is not LESS overbought.. So Stay Humble-Should you Lose Your Humility–Watch Out! We see it in people and in traders.
To Get Our PORTFOLIO ROADMAP & Our FOCUS LIST plus updates & additional reports…. GO TO–optionprofessor.com/subscribe and Join Us for $49 per month or $297 for entire yr.!
We told SUBSCRIBERS about Tech a year ago, Value 6+ months ago, Banks Energy Industrials Cyclicals many months ago and now we are getting an acceleration phase. We will be sharing our opinions of what and where we think the best values are in the next 6-9 months now. This week we has many stocks on our immediate radar including CMG SBUX URI DHI QSR VIS VFH VCR VOOG VUG LEVI ESGV GDX SILJ CANE DBA VWO VGK BABA KRE LTCN OSTK & a lot more! Also in the new Best Buy (BBY) is starting a subscription business and the stock liked it…Teens are in love with NKE & Eagle Outfitters while Jeans had a big run (LEVI GPS). The big banks (JPM BAC C GS WFC ect) are up 17% to 34% this year and regionals (KRE) not too shabby. Boeing (BA) had to pulls the MAX again but most say next week resolved and GM had to cut truck production due to chip shortage…with all the saber rattling between China & Taiwan we could lose TSM which make the $20 Billion Arizona deal on INTC all the more important. Florida sue the USA to get cruise ships moving (CCL RCL) makes Condo Commandos happy:):). Big News! Coinbase comes to market April 14 at a valuation equal to Goldman Sachs (GS). We share with our SUBSCRIBERS our Portfolio ROADMAP & FOCUS LIST & ASK US Questions. To Join Us.. Go To optionprofessor.com/subscribe for $49 per month $297 per yr. Good Value!
Our view was that Last March we saw a blow off top in price and blow off low in yields. There is a potential that the cycle of debt and declining interest rates had come to a close 40 yrs after Volker’s Extreme. The 2% 10 yr Treasury and 2.50% LT Treasury are important as if broken it would solidify our thesis with price evidence. The Fed an others believe inflation and spikes in GDP growth are transitory and we will revert back to trend in the years to come. If so; you could start adding a bit of duration or for aggressive traders Strips (zero coupon) Bonds as the current panic to be short Bonds smells like a unbalanced trade that could blow up. We see extended maturities (EDV) down big time in Q1 which may not persist or at least at that speed in the months ahead unless the Fed is wrong and inflation & GDP sticks and they have to cut back monthly buys and go to TWIST for yield curve controls (YCC). Credit Spreads under 300 has spelled a buy point but these times are unchartered so old comparisons may be lacking. The relationship between 5 & 10 year Treasuries suggests no inflation further out and as long as credit spreads are tight..the Fed may be right. Municipal Bonds are seeing huge inflows ahead of tax hikes and aid from the feds. We favor short term corporates with Munis Preferred High Yield Senior Loans REITS EM and Dividend paying stocks in value sectors as a way to go. SUBSCIBERS get our FOCUS LIST on ways to get INCOME in a diversified portfolio prudently. GO to optionprofessor.com/subscribe for $49 per month or $297 per year….info you need!
US Dollar/International Markets
We told you before that the move from 104 to 89 on the DXY was like the sell off we just saw in Bonds and the selloff we saw in Tech in March…..it just got too crowded. So with yields rising our advantage returns and up we went plus our vaccine progress & growth blows away other areas of the world (Japan lockdown Tokyo-Kyoto-Brazil hospitals full-Europe better but not great). As long as the DXY is in the 91-93 range we could see 94-96..under 91 spells trouble. China’s angling to crypto to attack the Dollar overtime while the ECB pulling back on purchases. Italy is the most indebted country in Europe and they got a line wrapped around the block for their 50 year bonds. USA debt is weak in investment grade but Junk is at records (Chuck E Cheese is bank in the game after bankruptcy). Twenty (20%) of stocks are zombies (revenues do not service debt) so the world is getting pretty wacky. Munger’s Daily Journal is buying BABA and our view is that our trade deficits will enrich Europe Asia and Emerging Markets later this year so that could be the bigger bang for your buck in Q3 Q4 ROTATION. LEARN about our PORTFOLIO ROADMAP & FOCUS LIST in these markets….Get On Board! Go To optionprofessor.com/subscribe and for ONLY $49 per month or $297 per year you’re in!
Crude Oil Natural Gas
Pause to refresh here as we had a huge run in Q1 (best performing sector) and OPEC did hike production. SUBSCRIBERS benefitted from our view of bullishness in the last year and these pull backs are buying opportunities as rig counts lack of private equity and a demand pick up globally spells for better days down the road…the refiners and leveraged players are interesting and VDE OIH are two on are radar after the raining subsides. We share our ideas each edition. Natural Gas prices were flat but our favorite LNG popped off support at 70 this week..we’ll see. Go to optionprofessor.com/subscribe to get the Portfolio Roadmap & Focus List right away!
Gold Silver Platinum Copper BitCoin
We told you that $1675 was a buy point in Gold and Silver about the 424 area which was true HOWEVER we said the easy lifting would take us to the mid $1750’s and $25 neighborhood. Should we break the $1775 area and Silver $2650-27…we could see a significant move, Our base case these markets will do better in Q3 Q4 than now but we go with the flow. Platinum is our dark horse as it already shaved about $500 bucks off the discount to Gold and we expect the car industry resurgence in summer to help a lot. Copper has been mixed lately as increased supplies in China fight with demand expected at 10 tonnes. A breakdown should see support at 3.75 area and take off above 4.25 could light a fire…We share 2 stocks on our FOCUS LIST that have been rainmakers the last 12 months. You get our FOCUS LIST on metals stocks when.. BitCoin; as we told SUBSCRIBERS..is great the year after halving..average in on 30%-50% dips! Go to optionprofessor.com/subscribe for JUST $49 per month and $297 per yr–stay informed!
Soybeans Sugar Coffee
Soybeans remained in a tight trading range as we await crop report news. Long time readers know we were all over prices last year at $8 to 10 and saw a great run toward 14.50 where it stalled after China filled their orders (Corn just hit a 8yr high). Now it gets tricky as IF farmers are hedging with crops they don’t have and we have a weather market and if China’s appetite remains robust…we could breakout to the upside…the risk is the LT MA’s are at 10-11 range and that mean any bear news could instigate a decline back to the mean.. we’ll see soon. The Sugar market corrected and held support in the 13-14 range and if we get above 16 again we could run. Coffee is similar to Sugar in that it needs to break resistance to give us a good run like it did for us last year (140) so we wait and watch and still believe we could see a run ahead. There are ways to play these with ETF’s and we share this information with our SUBSCRIBERS Go to optionprofessor.com/subscribe and get our FOCUS LIST….$49 per month or $297 per yr!
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, your broker and or your financial advisor to determine your own suitability. Past performance is nor necessarily indicative of futures results. Information provided for Informational Purposes Only. Use Risk Capital Only
April 2 2021 Option Professor Opinions & Observations
Happy Holiday Everybody…..We blew thru SP 4000 this week as the jobs report showed 900K+ which is a surprise to no one who realizes that 10 million unemployed is centered around service jobs and they are going back to work…..however what may come as a surprise is the participation rate is flat and wages are actually down. Earnings start coming out and they should be quite good and Q2 comps will be the easiest on record so look for sticker shock. As SUBSCRIBERS know; we have been saying since the crash that OPERATING LEVERAGE who bring peak earnings back way quicker than consensus estimates which is EXACTLY what is and has been happening. The VIX we said would normalize this year and get away from that elevated 30 average from last year EXCATLY what is happening. Volume on Thursday was weak which either tells us short covering fueled a lot of the move thru SP 4K OR that huge volume this week may give us a short term blow off peak. We have stuck with VALUE BANKS ENERGY for 9 months BUT we told SUBSCRIBERS that if MARCH LOWS held on QQQ & SMH and the 10yr stabilized in the 1.80-1.50 range…we could SPIKE on both and we did that this week. We got a glimpse of Infrastructure last week but not much reaction from the beneficiaries (PAVE). Everyone’s looking for a Post War type reopening and no doubt it should be strong BUT how much is baked into prices? Leverage & Valuation is getting extreme by some measures (Archegos biggest margin call ever & Buffet’s Indicator (Stocks divided by GDP) is 184 and in 2000 it was 143! USA manufacturing going at a pace not seen since 1983 & buybacks could be huge in months ahead (splits too?) As we embark on Q2…we will letting SUBSCRIBER know some of the areas to FOCUS on NOW and use March lows as your line in the sand. Additions to the Value-DIVIDEND Paying, Tech, Semis portfolio….we are expecting the dollar to weaken at some point (deficits & negative real yields) which would give a lift to OVERSEAS markets (trade surplus-local currency appreciation-lower valuations) and Gold & Silver-Platinum shares. As a SUBSCRIBER; we will share our opinions on exactly how POSITIONING could help portfolios. This is a great TIME to LEARN about our FOCUS LIST for 2021 & OUR PORTFOLIO ROADMAP!
Stock Market The market were rockin’ & rollin’ last week as more fiscal-stimulus and frontrunning of the jobs report blew out all the shorts. The stampede we alluded to in last weeks report came to pass BUT some still say that technicals running hot and some seasonal & cyclical guesses could spell a correction by or before Mid April but there is no price evidence of that so far. We are really discounting a lot of growth and a perfect re-opening which has risks but to stand in front of this liquidity and pent up demand is stupid. Some stocks we have believed in are QCOM (smart phones) AMZN GOOG FB (ads + all subsidiaries)) MSFT (cloud) MRK PFE AMGN (pharma) LIT & all things to do with EV filling stations (500K plus consumer incentives vs 145K gas stations nationwide)….we also feel the future is bright for life sciences, Industrial revolution, automation AI-Robotics, 5G, and sustainable technology. One stock..Corning GLW may also be on the upswing with their partnership with AAPL on glass (gorilla) and glass for vaccines as they can handle the temps. Add to that the cloud (only in the 3rd or 4th inning) , cyber security and digital transformation ect.. We will be SHARING our FOCUS LIST ect. with our SUBSCIBERS.
BOND MARKET We will be watching credit spreads like a hawk from here a they may tip off many things like trouble ahead for stocks and trouble ahead for INFLATION. After the Spanish Flu we saw 20% inflation and the money supply is up 25%…Fed Balance sheet is parabolic and we may be on transfer payments longer than you think (less employees & robotics). Jamie Dimon said he wouldn’t touch 10 yr Treasuries with a 10 foot pole ( we stabilize & rally a bit but just basically temporary). Investment Grade Bonds had the most downgrades 3X last year while refinancing has hit the skids as mortgage rates have risen 7 weeks in a row! As we told SUBSCRIBERS since last March…the cycle of declining interest rates and no inflation has TURNED and the 2 big questions are how long can you have negative real yields with these kind of GDP numbers? and who will buy all our debt if bondholders are dumping losers while the Fed-Treasury (now will be partners) trying sell trillions to finance deficits (monetize debt?)? Many sharp investors want to be DIVERSIFIED in international equities (local currency), commodities, Gold-Crypto ect in case we were to see USD get whacked..Chinese Yuan +10%. How should you go about getting DIVIDENDS & INCOME in this New World Order? We inform our SUBSCRIBERS as to CHOICES.
US Dollar & International Markets
We have told SUBSCRIBERS that the US Dollar (DXY) was topping at over 100 and short term low UNDER 90…both forecasts have been correct. NOW we said a move above 92 could get us into 94-96 range an last we we breached 93. A move into that range would be a Fib 38.2 correction of the down move which is coincidental. At some point; our trade deficits, fiscal deficits and the point of diminishing return of the re-open mania will weigh on the Dollar and while the return of its yield advantage helps…others are already negotiating new means of exchange (Yaun Euro BitCoin). Best to wait for price evidence that this has started..to expensive to be a trailblazer. Internationally; we took advantage of the selloff in China’s market due to margin call selling from that rogue trader. Also Europe, Pacific & Emerging Markets look great from a trend and valuation basis…that is where we believe the puck is going….we’re skating. Find out what is on OUR FOCUS LIST to gain exposure and track progress. Become a Subscriber
Crude Oil Natural Gas
HOORAY!! The Suez Canal is open…truth is it had hardly any effect on the oil situation. What will have a bigger effect will be if OPEC behave itself supply wise and the surplus works off by summer and the demand kicks in…EUROPE is the key..if they can get COVID under control and are full force demand by Labor Day then 80 Crud could still be in the cards. We have SHARED with SUBSCRIBERS ideas on oil companies, refiners and MLP;s for the last year that have had substantial runs and paid us DIVIDENDS of which others would be envious. Right now e have found an equilibrium. Nat Gas is still holding the 2.50 level which is good and our LNG is holding 70. We have a lot to SHARE with our subscribers on our FOCUS LIST so Join Today!
Gold-Silver-Platinum Copper BitCoin
We have said for many months the trend for Gold & Silver stinks and outside of a bounce we played off $1675 Gold (to $1740)….we have said it may be late this year before we heat up. HOWEVER…our long term target for things like GDX SILJ Barrick have been hit in March so we have started sniffin’ around and will add above 1750-1850-1950 for the rest of the year providing MARCH LOWS hold …if not maybe 1500 Gold 20 Silver here we come…..last time inflation jumped way above the 10yr yield was back with Volker….very bullish if it occurs plus most bulls washed out with 300 buck drop. If no leverage..you’ve held on…later this year $$$? Platinum has been our darkhorse and you can play it with stocks or bars..they’re stealing lotsa catalytic converters out by us …maybe a sign of platinum demand when car production zooms this summer…Copper again has big demand coming and a couple of stocks we SHARED with subscribers went way up and may be over their recent pullbacks. Watch out for re erating companies holding BitCoin as it is a risk asset and could penalize their credit rating…the big issue for BitCoin will be if deflation shows up ( households save or reduce debt)…..maybe 100k?
Soybeans Sugar Coffee Soybeans have been trading pretty wild lately but remain in that 13.50-14.50 area (we got bullish last year at 8-10)…..we feel that there is a tug of war between demand from China and potential weather interrupting crop yields and the biggest acreage plantings since 2014. It should be a wild 90 days ahead. Sugar has been correcting from an unsustainable move above 16 but is still above the 200 day MA at 14.23 area so it may be a case of anything coming out of Brazil (soybeans & coffee too) is out of sorts between weather and Covid & their economy. Coffee is the same story as the 100-110 area hold so we still are optimistic but patiently await.
REMEMBER There is a substantial risk of loss in short term trading and option trading an it is not right for everyone. Consult your brokerage form, broker, advisor to determine your own suitability. Past performance is not necessarily indicative of future results, Use Risk Capital Only Information is provided for informational purposes only.
March 27 2021 Option Professor Opinions & Observations
IMPORTANT ANNOUNCEMENT: The Option Professor’s Webinar is MONDAY….LEARN Where We See the Best Opportunities Right Now…LEARN How to Protect your Portfolio Against Market Declines….How to Create Cash Flow on Your Portfolio….How to Trade Options on Stocks-Oil-Gold-US Dollar PLUS What INDICATORS we used to INCREASE the Collective 2 Trading Account by Over 100% Annualized in the 12 Months! The Option Professor is a graduate of Boston College-has Decades of Investment Experience-has Instructed Thousands-LEARN MORE and OUR FORECAST for 2021! CLICK HERE to Register Now
OK…On Friday we saw a stampede into stocks in late afternoon trading taking the Dow Jones Transports to NEW HIGHS while the S&P & Dow tested their highs and the Nasdaq still off the pace. End of quarter rebalancing we told you about weeks ago is happening and VALUE-CYCLICALS- BANKS & ENERGY continue to be the new momentum trade…as we told you for many months–beneficiaries of better valuations-steepening yield curve-reopening-earnings. GOOD NEWS- GDP in Q4 was 4.3%+ and Jobless Claims tanked (we told you for months Jobs Reports will normalize). The VIX broke and sustained a sub 20 number!…..Banks can buyback stock & pay dividends June 30…M&A activity expected to jump…money supply up OVER 4X in last 20 yrs (accelerated last year) means lots of $$$ around….Personal Income/Household Savings rose at a Record pace last year…$3 Trillion Stimulus/$2 Trillion Households/Fiscal Stimulus NOT SO GREAT NEWS…Some Cycle guys still calling for a PEAK in March-Mid April leading to buy point in EOM May or June (we have seen tradeable sell offs from this neighborhood)….the A/D line is lagging…Household spending was down in Feb (bad weather?)….Prices Paid Index Jumped…this much LIQUIDITY…this much pent up DEMAND and the Fed still saying no hikes for 3 YEARS may lead to INFLATION & HIGHER RATES and some say Higher Rates is like GRAVITY to stocks (zero rates=no gravity)….we have BORROWED from the FUTURE-payback-higher rates-lower dollar. So who’s making out from all this….we have told you about the ROTATION for MONTHS and the chart of Value vs Growth suggests the turn is in full force and has a long way to go….foreign countries are exporting to us at record levels which means they are making $$$$….and supply chain shortages and demand pressures look good for resources SUBSCRIBE to our Newsletter and LEARN what is on Our FOCUS LIST NOW for $49 Monthly or $297 Yearly….peanuts.
Well we have demographics (millennials)–a steepening Yield Curve–positioning 9sideline money)–and risk reward (VIX under 20) all pointing to a favorable market so stay the course for now BUT be sure you know how your hedging strategiescollars-married puts-trimming-replacement trades using calls & spreads ect.) so that if we see a stall or correction you at least you have an opportunity to protect gains should decide gritting your teeth causes dental damage:):). We saw housing get a bid this week with stocks like LEN MHK SHW PHM and Williams Sonoma rising. Some are looking to dividend payers (we told readers about this MONTHS ago VYM) an now T-6.9%, KO 3%, IBM 4.8% USB 3% and VZ 4.3% are same than have garnered attention. Materials Energy Industrials and Consumer Discretionary (Staples now too) still attract bids…..while high valuations have hit the skids buy may be worth a peek off their highs Snowflake -50%., TDOC -29%, ZM -46%, ROKU -35%, SHOP & SPOT -20-34%, AAPL -17% AMZN -14% to name a few. My son got an I-12 which definitely has a bigger screen and 3 cameras so maybe a huge rush later this year?? The NFT craze is brewing and some say Ethereum (ETCG) may be a way to play it. Two vice sectors may continue as the states are looking for revenue….online gambling has been a monster (DKNG PENN Flutter ect) and the pot stocks (MJ)..one is pulling back the has done so…but now the states get apiece of the action…strange bedfellows but not surprising $$$$. Other stocks of note.. Unusual option activity V BA & AMAT plus price action in BX WBA FSLR BP STZ JPM XLE RRR WSC ORCL and many more as we keep subscribers abreast of not only ETF’s in sectors on our focus list but a lot more! SUBSCRIBE TODAY!..Only $49 per Month/$297 per Year…
The yields backed off the 1.75 area on the 10yr and 2.52 for the 30 yr after a drop in Bond prices that was the worst start to a year in this Century! We are NORMALIZING interest rates to reflect GROWTH & INFLATION expectations and since we still have negative real yields that process has a lot more to go over time. If you are an investor in LONG DURATION you are getting whacked (your coupon is dwarfed by the price decline of the bond) BUT it also must mean you have not listened to our WARNING since last March 2020 was a blow off top and the end of the declining rates cycle that started back with VOLKER….we have said stay in short duration and sprinkle some high yield and preferred stocks to sweeten the pot….this has been a good place to be…..Junk debt issuance at a record..overseas market are rushing to the issue window….Treasury issuance will explode as transfer payments and deficits must be paid for…this rally we see in debt may last awhile (positioning was VERY short like the positioning on the US Dollar and both have seen a corrective rally…but the fundamentals do like bode well for either market unless GROWTH outpaces INFLATION
US Dollar & International Markets
As we have told you the US Dollar (DXY) got oversold at the 88-90 areas (14% drop from 104) and positioning was ultra short so we believed the higher yields would return our yield advantage and cause a corrective rally which it has done closing Friday at 92.72. Now we trade ABOVE the 50 day MA and the 200 day MA (91.06-92.11) so that’s positive but the averages are still INVERTED to the downside so the sustainability of the rally will tell the tale. The Fed printing (money supply from 5 Trill to 20+Tril in 20 yrs) dwarfs foreign countries and some have positive real yields which means that at some point the house of cards playing with fire could burn…..unless growth is so strong that revenue spikes….we’ll be watching…..foreign countries are flooding us with goods (if they can get thru the Suez Canal:):)….which bodes well for their earnings (they have lower valuations)….some say we reopen July 4th…Europe Labor Day..Emerging Markets EOY….all bodes well for Asia Europe & Emerging Markets….we share our FOCUS LIST with subscribers so…….
Crude Oil Natural Gas
OK…..the Suez Canal Drama has helped return the bid to Crude Oil prices (57 to 61) after a correction we told you was coming from 68 to 57 (50 day MA). We are still well above the 200 day MA so back and forth action may continue but we are very interested in OIH as a longer term vehicle and used the sell off to 180 area as an opportunity…if we’re going to 80 the future of that is bright….also the leverage players and refiners are on our radar always as lots of gas guzzlers still making us money. Natural Gas may be hitting support at 2.50 and our favorite LNG hit support at 70 like we said so let’s see if the correction is over in the days & weeks ahead…
Gold Silver Platinum Copper BitCoin Rare Metals
We have said for may months that the parabolic moves in Gold & Silver last year was going to need TIME & PRICE corrections to normalize and we continue with that process. Technically oversold at $1675 & $24.50 we felt we could rally and we did but as we said last week…the easy lifting is done …..on Gold we need to clear $1750-$1850-$1950 to make big money on the Upside with Silver needing ABOVE $28-$30 to get it’s mojo back on…this may take time so now a late summer or early fall cyclical low may be in the cards HOWEVER with an exploding money supply and GDP spike with Price Paid spike & the Fed on hold for 3 years….I wouldn’t stray too far. Platinum is our dark horse as it is way more rare than Gold…is trading at a huge discount to Gold (was larger) and has industrial application (catalytic converters) & possible shortages like many markets so $800 to $1000 is the base and ABOVE $1300 is rarified air. Copper has demand coming out its ears (10 million tonnes) and supply chain issues but lately we saw a 1-15% correction dues to overbought technical condition (35% above 200 day MA) at one point. Same thing with a couple of copper stocks that have been stellar for a year… now the correction maybe over…we share these ideas with subscribers on our FOCUS LIST….BitCoin (GBTC & ETCG) is the same story we’ve told for OVER a year…the year after halving is good (2021)….it is illiquid due to concentrated ownership…institutions are warming up (Fidelity Van Eck ect)…..Central Banks (China-Sweden) are moving forward & the Fed is using MIT for data….block chain has not been breached…so every time you see a 30% to 50% drop (we seen a few)…take your risk capital and take your shot….is there a risk that it could be outlawed like Gold was back in the day….will CB coins unseat its supremacy.. who knows?….it’s risky..so far profitable. Turning to Rare Earth mining and a stock symbol MP which just dropped 35%–for the faithful-it’s on sale
Soybeans Sugar Coffee
US Growers plan to seed the most acreage of Soybeans since 2014 as the higher prices brings out the John Deere’s. What we don’t know is how the weather will be during this planting and growing process PLUS how much hedging (sell short to deliver crops not yet harvested) is going on that could cause a perfect storm (no pun intended:) Prices have been hanging in the 13.50 to 14.50 area all year long (we told readers be bullish at 8-10 last year). We are way above LT MA”s so the RISK of a DROP exists but IF we hold this range and a weather market breaks out with China demand it could be a wild 2021…..Sugar and Coffee have seen corrections (maybe having to do with Trouble in Brazil) but corrections are all they are (in fact Coffee bounced nice off 125…they still are holding LT support (13 & 110) SUBSCRIBE TODAY! Get our insights into these markets and our FOCUS LIST of ETF’s for Only $49 per month or 297 yr…
REMEMBER There is a substantial risk of loss in short term trading and options trading and it is not right for everyone. Consult your brokerage form/broker/advisor to determine your own suitability. Past performance is not necessarily indicative of future results. This is provided for informational purposes Only. Use Risk Capital Only
March 19 2021 Option Professor Opinions & Observations
Welcome Back!…..We have told you in the last year that the S&P 2200 was turning up & start with Tech & Growth,,,,we then told you the S&P 2800 was a key long term moving average and once ABOVE it (with the Fed’s help) we were out of the woods…..we then told you Gold & Silver’s higher prices were parabolic and would not last…we then told you that VALUE & CYCLICALS & DIVIDEND PAYING stocks would gain favor as the yield curve would surely steepen and big money would be more comfortable buying into those stocks rather than the high valuation……recently we said that the highs around S&P 3960 could find resistance and a correction could occur. In the last 2 months we saw the S&P have declines from 3870 to 3690 and 3955 to 3720 and now 3983 to 3885…all very playable….BUT the prior 2 declines were followed by rallies of S&P 3690 to 3955 and 3720 to 3983 also very playable. NOW WHO WINS THIS TUG of WAR? We understand some cycle guys believe the market TOPPED out this last week and will DECLINE in a zig zag pattern until later this year….that is clearly a CONTRARIAN VIEW. The China numbers have been spectacular (retail sales +33%/manufacturing +35%/exports thru the roof) yet FXI & KWEB have DECLINED in the month of March so stranger things have happened. This may also be saying that they are screaming buys but China does seem to want no bubbles and have taken steps in that direction (BABA’s ANT deal squashed and reduce media holdings). The BULL CASE for stocks really comes down to 70% of our economic growth which is CONSUMER SPENDING. Households are on fire with cash (refinancing 2020 $2.6 Trillion inflation adjusted)), wealth effect, back to work, low interest debt service, millennials in the game, patient Fed (easy), vaccines, improved weather, pent up demand no interest in Bonds, VIX trying to sustain UNDER 20, and of course an obscene amount of stimulus now and coming.
We are seeing EVIDENCE of their willingness to SPENS with air travel already spiking and CREDIT CARD ACTIVITY HIGHER on a year over year basis and less at grocery stores and more at restaurants (my buddy in Phoenix says restaurants packed). We also see baby boomer credit card activity is up huge in March. We must respect the old phrase “just when you think you know the keys to the markets they change the locks”…..but it seems reasonable to expect the GDP and EARNINGS to spike and it starts in a couple of weeks with the BANKS who should deliver great numbers. Some say the economy is back to the strength of 2018 and now has 2X or 3X the GROWTH RATE and INTEREST RATES are HALF the level back then so it is SCARY how much of a DEMAND shock we could see. We did see drops in energy stocks as inventories rose and IF we get a END OF MONTH BID in the Bond market coming from mutual fund REBALANCING ….we could see the banks start to give back some like we saw this week. Ray Dalio who is a renowned hedge fund manager believes the monetization of the debt by the Fed is indicative of END OF DEBT CYCLE behavior that may show its ugly head by the end of the year. Here’s the deal…the whole world owns Bonds and they are LOSING money as GDP spike -Inflation-Potential Weaker Dollar may GROW in months ahead…..should they want to SELL and the Fed/Treasury must SELL…who is the incremental BUYER…..the FED. The Dow Transports (FDX UPS UNP) and the Russell 2K so far have been & remained strong which is good so if S&P & QQQ SMH ARKK hold their monthly lows AND we get a bid EOM on Bonds…if we see strength-go with it Remember…China saw some buy the RUMOR sell the FACT so be HUMBLE! SUBSCRIBERS will get our FOCUS LIST on a DIVERSIFIED approach that we feel is essential in this market . We will SHARE our ideas for VALUE-CYCLICALS-DIVIDENDS-TECH/SEMIS INTERNATIONAL-DOLLAR HEDGE. SUBSCRIBE TODAY!
Prior to last week we explained that Fed EX FDX was going to announce EARNINGS and they would be monster so anything between 255 and 265 was a steal…well last week we were rewarded with a great report and a $20 pop in the stock. We are following 2 new issues RBLX & CPNG for possible turns…speaking of turns..we are expecting the lows for March in SMH & QQQ & ARK funds to hold and proceed to rally if we see bid show up in Bonds with EOM rebalancing…if not..Sayonara….where is the puck going?…we think after any dips energy & banks plus value & dividend payers still the place to be….by May they talk of infrastructure deal maybe (URI-Materials-Vale-NUE-FCX ect)….SUBSCRIBERS receive our specific ideas. After that the sports related (DKNG MSGS ect) and autos related (DAN-F-GPC) are on the radar plus more. The ETF MOON is on the radar now vs ARK and really the big story in the next 2 weeks is whether there will be a selloff in tech & semis & innovation as rebalancing occurs or if we hold March’s lows and get a recovery run as the 10 yr pauses at 1.70-1.80? SUBSCRIBE TODAY!…..and get our FOCUS LIST & More!
Long term rates hit about 2.54% and much more and TINA’s got a fight. After the run up we’ve seen and may see stocks may have discounted much of the good news and the consumer spending pop could ease…if that happens people like the Black Rock boys who indicated duration may be a less dirty word soon will arise. There’s so much debt and ongoing issuance only a fool would not think we’re near the breaking point unless growth is so sustainable that we can handle the LEVERAGE…but let us SHARE with you a LEVERAGE HISTORY LESSON…..1980’s LEVERAGED BUY OUTS (LBO) preceded the 1987 crash…LONG TERM CAPITAL & VALUATIONS preceded the DotCom crash…..no money down no doc REAL ESTATE LEVERAGE preceded the crash of 2008….and now we see LEVERAGE in the Fed Balance sheet & Corporate balance sheets & Consumer (credit card issuance & use) is HISTORIC….hard to time but look out for Cops…in fact we believe the Fed is like Cops…great people..we love them…but they come AFTER the trouble. SUBSCRIBE TODAY!..we show you where to get INCOME & explain details
US Dollar & International Markets
As we gave details to readers before the DXY has held 88-90 as our economy rebounds dramatically & vaccinations far outpace the world and our interest rates are back up to a real advantage so we push 92…..if we push 92-95 that changes the landscape Longer term the Fed is monetizing the debt down the road substantially potentially and could be the straw that breaks the Dollar’s back..we are on the look out and will adjust accordingly. International markets like Europe. EM and Asia Mexico/Brazil look very interesting but some still lack growth BUT we will use them for CUURENCY and VALUATION diversification which we believe will be needed by Q4. SUBSCRIBE TODAY!…Get our FOCUS LIST and details on where & is liked
Crude Oil Natural Gas
As we told you the energy sector was a bit frothy as were oil prices and refiners were racing to deliver so this week we saw inventories rise which has trimmed prices (XOP XLE ect) but a rebound late in the week occurred after the 10 buck sell off from the highs….LT we still believe in the supply demand dynamic to be positive but as in any bull market..buy the dips. Go size selloff in Natural Gas from 3.25 to 2.50 may be over and with it the dip we warned about in LNG…should hold the 70 neighborhood if any good SUBSCRIBE TODAY!…Get our Energy FOCUS LIST before the next move!
Gold Silver Copper Platinum BitCoin
We told you GOLD SILVER PLATINUM hit short term lows at $1675, $25 and $1100 and so far they have bounced very nicely BUT the easy work may be done as we need prices OVER $1850, $28-30 and $1300 to open the door to the real upsideor risk going back in the soup. Copper has DEMAND of 10 Mil Tonnes and supplies that may not be adequate as INFRASTRUCTRE is a sweet word for the copper bulls…we have 2 copper stocks we rode like Secretariat this last year…..BitCoin has money flow coming in and terrible LIQUIDITY to meet the demand…our mantra since last year is that 2021 is great and could hit 100K BUT use 30% to 50% dips to average in with risk capital…remember like TSLA they were first to the game..competition next SUBSCRIBE TODAY!..Learn what metals stocks are on our FOCUS LIST
Soybeans Sugar Coffee
The grains have benefitted from CHINA demand and this week was no different….prices seem elevated and a correction would seem natural but BEWARE…farmers and others may be sellers/hedgers up here against CROPS THEY DO NOT HAVE YET which means if we have WEATHER MARKET this year there could be a scramble for example if the shorts have more exposure than they can deliver..a spike can happen…Gamestop to an extreme example was fueled in part by 140% short interest. Sugar & Coffee are losing altitude but if you are a believer in a COMMODITY BULLISH SUPERCYCLE ….be happy to get the dip SUPPORT Sugar 12-13 Coffee 110-100 SUBSCRIBE TODAY!…Get our Focus List on ETF’s in these markets & MORE!
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 indictive of future results Use Risk Capital Only
March 12 2021 Option Professor Opinions & Observations
Welcome Back Everybody!…Never a dull moment in these markets huh? This week was no different as the Transports & the Russell were not to be denied and after a rough correction tech & growth got back on their feet. The S&P took out the 3840/3860 range igniting a rally to new highs but the VALUE-BANKS-ENERGY-DIVIDEND Trade that we talked about for MONTHS continued to be a great winner for us and our readers. The Jobless Claims came in good (we expect the unemployment rate to collapse by year end) & Household net worth rose 6.9 Trillion in Q4 so you know the Wealth Effect Plus Stimulus Plus Patient Fed Plus Economy Reopening spells GDP spike. The Millennials have been opening up trading accounts in record numbers and have use option trading to leverage their opinions. Bonds area loser and if we accelerate through TLT 135…an exodus into our groups should continue. POTENTIAL big story at the end of the month (Q1) is the huge MOMENTUM FUNDS may allocate less into tech & growth and more into Energy & Banks (we’re already there)..that’s where the momentum lives. There could be years of runway ahead as the roaring 20’s actually got its legs years after the pandemic. BIG STORY…we have additions to the S&P 500 coming IN about a week or so NXP Semis, PENN, CZR, and Generac are now members OUT are Xerox, Flow Serve, SL Green & Vontier…arrivaderci guys! Earnings are expected by us to be stellar as we see the comparisons to be easy as companies have cut costs and OPERATING LEVERAGE will catch some by surprise. Real interest rates are still negative which is good for Stocks but may tell us Bonds may be in trouble (60-40 portfolios beware). The Fed’s 2 mandates are employment and stable pricing. They threw the kitchen sink at this thing to get the employment rate down (25% JUMP in money supply-OVER 20% of all dollars in circulation came in last year PLUS 12% JUMP in money supply this year PLUS a Balance Sheet that exploded as they Leverage America). When you add that to the fantastic & huge fiscal & monetary DEFICITS; one must assume that a 60′ 70’s inflation pop is in the cards. Three (3) Outcomes could be that the Fed stays behind the curve and let’s it happen OR the Fed responds to inflation and Chaos ensues OR it all plays out very orderly and without drama & volatility….a very rosy outcome Could we get a skirmish between China & the USA over Taiwan or the South China Sea? Could the EXPERIMENT of this much stimulus to a reopening economy already booming be problematic?….they are playing with fire. We have given SUBSCRIBERS a PORTFOLIO ROADMAP for the last year that included TECH & COVID Beneficiaries back in MARCH-MAY followed by a move to the bombed out EPICENTER Stocks as we got into summer and followed it up with VALUE BANKS ENERGY as we approached fall as we called for a steepening of the yield curve and that call was right on. We believe the USA will have a V Shaped reopening that outdoes China BUT we feel ultimately this is a WORLDWIDE coming out party that will lift all boats and VALUATION Overseas is compelling long term and some say the huge CORRECTION in QQQ & SMH & ARK funds has bottomed during that last sell off. Do you want to LEARN How to SUBSCRIBE to our NEWSLETTER & get the SPECIFICS on FOCUS LIST in GROWTH INCOME & SPECULATION? EMAIL [email protected] & let us know you want to get rates.
WATCH if support zone on the S&P at 3900-3850 holds & REMEMBER LT MA’s remain about 500-700 SP points UNDER current levels. We follow a WIDE RANGE of markets in our NEWSLETTER so we will give you some examples that are always EVOLVING…E-commerce winners IYT FDX UPS ect…Homebuilders LEN DHI ..Payments IPAY V PYPL ect Theatres AMC CRK IMAX,…NEW issues RBLX CPNG ect….Insurance MET MMC TRV ect. Travel/Leisure PEJ BJK DKNG PENN TRIP EXPE BMBL ect …Industrials BA HON ect Banks KRE XLF EUFN ect. Energy XLE COP CVX MUR MRO SLB ect EV NIO TSLA ect Reddit NOK BB SNDL AMC Tech NVDA SMH QQQ ARK ect….Infrastructure PAVE CLF X URI ect…Growth Fallen Angels Shopify Spotify ZM DOCU TDOC TWLO Fastley Cloudfare MRNA PTON ROKU Pinterest Zscaler Splunk ect Cyber Security/Cloud/Metals & a lot more. SUBSCRIBE Today by Email Your Interest to [email protected]
The auctions went OK this week but prices finished the week with their tails between their legs. We said for so many months that this is one of the BIG BUBBLES in the world and a mistake here of excessive dollar decline, inflation spike or GDP growth spike could sound the sell out alarm bell with a liquidity issue that we don’t believe the Fed or Central Bakers have EVER seen. Having said that, we told SUBSCRIBERS & readers alike to AVOID duration and if you want to spice up your income through HY and Secured Loans and Preferred you could look that way as most are relatively short duration and the default risk currently is acceptable. Concerns that our spike in rates (fastest pace since Volker in early 80’s) and the Dollar strength will damage Overseas & EM debt abound. Treasury Dealers off loaded $64 Billion and are now down to $185 Billion–lowest since 2018. High Yield spreads at 325 are tight & some say will get tighter. Still we have negative real yields so monetary conditions are easy…TLT hangs by skin of its teeth. Fed meets next week…we look for doves with admission of growth upgrade. First they fix unemployment & after prices get out of hand they fix that too. JOIN US and email [email protected] FOCUS LIST for INCOME
US Dollar/International Markets
At the risk of repeating ourselves…the Dollar has held the 88-90 support and with the yield advantage back we have a shot at a rally toward 95 if we can sustain 92+. We were dollar bears from 104-100 to the lows as our rates skid At some point the commodity currencies (Canada/Aussie) will have their day PLUS Japan & Euro/BP may shine when they reopen..for now USD firm. International Markets rebounded a bit…China had their convention with plans to grow & make HK a subsidiary with “patriotic” candidates only. China’s exports are screaming & Japan’s GDP thru the roof. NIKKEI still way up there but China stocks still BABA KWEB still recovering (ANT says no sub 18 yrs old can take out loans & spec on stocks..wow what reform:):)..Brazil’s having an inflation problem among others +5.2%!! EM & Europe popping off selloff…would use this months lows as a line in the sand. JMIA stock (the AMZN of Africa) got a lot of options action this week as did AMD. For our SUBSCRIBERS…we have a FOCUS LIST on these markets…email us-JOIN US!
Crude Oil/Natural Gas
For the LAST YEAR….We have been on this and SHARING with our readers that supplies would be tight (no cap ex/rigs/fracking OPEC) and that USA demand would rebound strongly sending ENERGY stocks back up very substantially which is EXACTLY what occurred. HOWEVER we see we are way above the 50-200 day MA’s and so if either demand of supply hiccups a correction is not off the table……Baker Hughes rig count is about 50% lower than a year ago & PE & Cap Ex seems to remain absent. Look to the COP-PSX SLB XOM & refineries (MRO VLO MUR) to benefit from the price gap as we go into summer driving season (daylight savings time this weekend!). Natural Gas still on the defensive as we said it would be as it tests the 50-200 day MA’s at 2.60/2.40…our favorite has remained firm LNG-$20 over 200 Day GET OUR FOCUS LIST on Energy & Financials-email us-check our rate deals!
Gold Silver Copper Platinum-BitCoin
We told you Gold & Silver were a no sale since $2100 Gold & $30 Silver as they went up too far too fast on a fear trade…parabolic the the LT MA’s. Last week we told you that Gold hit a Fibonacci retracement at about $1675 where we bounced $50 bucks….. while Silver and Platinum hit $25 & $1100. Mining shares like GDX GDXJ SIL SILJ AUY KGC & more are discounted and may be ready to show some legs…..so we will update you because the Fed printing press/consumer spending/Covid constraints on supplies could spell sunnier days for precious metals IF IF they can hold their LOWS. We got bullish Copper at 2.50 & FCX & SCCO a Long Time Ago!! Hard to come into markets when they are miles above their 200 day MA’s so while China is getting supplies & LEN DHI ect are cooking….recent lows as lines in the sand We have told readers about GBTC to play BitCoin since it was 10 bucks,,,we also said use 30% to 50% corrections to get in and use 100K as potential target as institutions warm up to the digital block chain craze. Risk Capital We have our FOCUS LIST on Metals & Mining too SUBSCRIBE TODAY!
Soybeans Sugar Coffee
Soybeans appear to be topping out here a bit UNDER 15 per bushel but time will tell as South America had some weather issues hurting supplies. The MA’s LT are in the 10-12 neighborhood so we got bullish months ago at 8-9..would prefer a better entry or play breakout of 1450-1475 on news. Sugar has been our pal since 12.30 and we remain bullish on pullbacks but LT MA is around 14. Coffee is another bull market since it broke above 100-110 and as long as it remains ABOVE that level we remain positive although supplies are tight..the big crop of 2020 may still be adequate..ABOVE 140 Kaching! There are ETF’s that let you paly this JOIN US TODAY!–GET OUR FOCUS LIST
REMEMBER Ther 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
March 5 2021 Option Professor Opinions & Observations
SUBSCRIBERS will get an update of our PORTFOLIO ROADMAP EMAIL us at [email protected] to JOIN US Today!
Greetings!….Well we told you last week that S&P 3960 could be a top as some cyclical studies have this time frame as a period of correction that COULD take us to 3500-3600 at first blush…..followed by a rally….followed by ultimate lows for the pullback in the May-June time frame. The last few years have seen March-April a bit rocky and you all have been told the story—tech -growth valuation will COMPRESS as yields rise and a switch to VALUE-BANKS-ENERGY-DIVIDEND PAYERS will unfold-exactly what has occurred. Whether it be the ARK funds or Tesla or ZM….we have corrected. We have told you this for MONTHS. This upcoming week is potentially pivotal in that their are 1-2-3 yr MA’s on the 1 yr graph all coming in at S&P 3840-3880 area PLUS highs at S&P 3915 3940 3960…..the VIX still holding ABOVE 20…..so we are saying that if the market can take OUT those areas we will not step in front and will open are eyes to the S&P 4000-4170 potential…..but China’s talking about avoiding bubbles & Powell seems to be sanguine about rate jumps and selloffs so maybe a cooling off period BEFORE the 2nd half pop is in the cards. Growth is 2/3 of many indexes so if repriced valuations continue–hard to rally far. Long term we believe in the bull market but the road may not be as smooth as glass…we saw a selling vacuum this week on rates and a buying vacuum on a jobs report suggesting the service sector is going back. No surprise there as we anticipate a collapse in the unemployment rate by year end and a spike in GDP fueled by record household saving and personal liberation. Where are you positioned? SUBSCRIBE to get our FOCUS LISTS & Add Value.
Since March-May 2020; We have told readers that EARNINGS would get back to peak levels & more quickly as the speed of the decent would be matched by the speed of the ascent…WHY?…because the key OPERATING LEVERAGE would allow it as less employees & office space would pay off. We told you that the STEEPENING of the yield curve would be welcomed by the Fed and that Banks cyclicals & dividend payers (VALUE) would see a resurgence and tech & growth were way ahead of their skis (value added opinion if heeded). There is a graph on Russell Value compare to Russell Growth and it memorializing the TURN of our Opinion that a MAJOR turn has occurred and those sectors MAY be the new growth engines for many portfolios…..we still believe in the barbell approach BUT value may be the 30% of the index that gives the boost as we reopen. SHORT TERM…we consider trim and hedges on the banks & energy sector as rates may not spike further and OPEC is just waiting for the summer driving season to supply the market in our view and unanimity of bullishness is getting hot. Unusual option activity was rampant this week including INFY VWAC. Many stocks were of interest to us including ORCL CAT BUNGE ADM Senata TMUS XOM GE HP TGT ….HAL APA DVN plus LEN LEG FCX AUY NOK EUFN & more SUBSCRIBERS get our PORTFOLIO ROADMAP-email [email protected]
A lot of people are LOSING MONEY in Bonds. This was something we warned about for many many months. The 10 yr Treasury made new highs in yields but are still in an area of resistance as many people are jumping on the 2% bandwagon…TLT held it’s lows @ 136… so let’s see if it wants to go to the 130 area (2017 highs)….we told readers for about a year Bonds were in trouble as the blow off high at 180 and the huge BUBBLE of debt at low yields had to end badly…and it continues as joke companies borrow at dirt yields (RECORD Junk issuance this year)….if we get growth & inflation (due to shortages & demand)….imagine the selling of people who want out….however since money market funds pay practically ZERO…corporates bonds & french pastry junk is the new money markets. PGIM thinks that after the stimulus wears off yields on 10yr back at 1%?? Next week we get auctions 10-30yrs….the better come off better than the 7yr EM debt has been tanking.. but stuff that doesn’t not have much DURATION risk have hung in their.. things we spoke of like HY/VFSUX/PFF/VMLUX and Floating Rates-FFRHX-IF we turn DEBT into a bear….they all may get nailed. Are you interested in Income…Be A SUBSCRIBER–JOIN US-get-FOCUS LIST
US Dollar-International Markets
We have told you for awhile that the DXY 88-90 area was support for the Dollar and the whole world was short…leading us to a counter trend rally that if it could take out 92 may wipe out some short but NOT put us in a sustainable uptrend. We peaked thru 92 BUT closed under so if the breakout of 91.50 hold we still could see further strength as our YIELD ADVANTAGE has returned…one of many reasons we tanked from 104. The Japanese Yen has been firm (our thirst for their products) but the European currencies (Euro-Pound Sterling) plus the Canadian & Australian currencies have lost altitude. In World Stock Markets; China-Asia-Emerging Markets Brasil-Mexico have been losing ground while Europe is hanging on by the skin of their teeth……while their VALUATIONS are compelling; we have a Dollar rising & the ECB is pulling back plus their Covid Exodus has not been a rocket ship at all. One country on the upswing is Chile (ECH)-up 5+% so far China has a meeting going over their 5 year plan to cover EV’s, HK elections, tech independence, carbon emissions, wide bodied aircraft, AI Robotics-components, digital currency, bio-pharma, advanced medical devices ect. With our PORTFOLIO ROADMAP; we share our ideas with SUBSCRIBERS
Crude Oil Natural Gas
Everyone was shocked this week when OPEC decided NOT to increase production & west Canadian oil sand cut production as well….let’s put our common sense hats on for a minute….would you hike production now BEFORE Covid ends & the summer driving season or would you squeeze prices further creating higher prices going into the DEMAND period and then hit the market when prices are good & buyers are prevalent?? So be careful at 70 & above on WTI as Texas has thawed and summer is ahead. We did have a RECORD drop in supplies so like MANY markets the SUPPLY CHAINS are choked but that is not a permanent calamity….be aware of that. We have been bulls since last March (-37 a barrel) and our FOCUS LIST has been a true All-Star but are monitoring this run as we have come a long way fast. We told you Natural Gas has lost its legs lately BUT not out standard LNG who made new 52 week highs Friday (up almost 3oo% from lows) but hit almost a 40% premium to the 200 day….maybe time to protect. SUBSCRIBERS are updated with our PORTFOLIO ROADMAP…..email to join
Gold Silver Copper Platinum BitCoin
Gold & Silver hit the skids again this week….no surprise to our reader as we told you since the run up to Gold $2100 & Silver $30 that they were way OVERBOUGHT and would take a period to work of excesses & AVOID THEM ….exactly what has gone gone on…..NOW we are becoming more interested as we are closer (broke some) of the MA’s and we MEASURED the GOLD rise from $1040 to $2063 and took a 38.2% correction…..we get $1675….Friday we got close to that neighborhood and bounced….GDX around $30 was our target so we are sniffing around and like Silver ABOVE 22-24 & PLATINUM $850-$1100 as a potential lows. Next week we’ll get more important price evidence….while we still believe there could be a future in precious metals.. our concerns that inflation is transitory/safe havens lost luster/higher yields could mean higher dollar/and remember the last time Gold spiked (2012) it took 8 yrs to get your money back..believe true breakout is above 1850-1950 Copper bounced this week after tanking on news of supplies hitting China. We warned that our favorite FCX which has been on our FOCUS LIST for over a year was getting into rarified air so trim/hedge was in order. BitCoin which we use GBTC as a proxy for has ben very volatile and while we were very BULLISH at 10-20 (10000-20000)…we told readers avoid buying on strength and WAIT for inevitable DROPS of 30-50% which we’ve had 2 this year already…..very ILLIQUID as finite supply in the hands of a small % and therefore risk capital dollar cost averaging has been out mantra…adoption is growing and some say 100K by EOY is still ok in the year after halving. SUBSCIBERS get FOCUS LIST in these….email us at [email protected]
Soybeans Sugar Coffee
We have told readers about these three markets for the last year & the three Amigos have been very very good this last year as demand has trumped supplies and all three still have shown legs in the last month. HOWEVER we see that all three are substantially above their LT MA’s which opened the door for pullbacks. Soybeans got great news out of Brasil that weather was killing their crop…let’s see if it takes out 14.50 or fails under 13.75. Sugar is above 16 (former resistance) and maybe the weather in South America will help while Coffee needs to break above 140 to see a possible spike and this week it faded. LEARN MORE..email [email protected] gmail.com & JOIN US!
REMEMBER There is a substantial risk of loss in short term trading & option trading and it is not right for everyone. Consult your brokerage firm and your broker/advisor to determine your own suitability. Past performance is not necessarily indicative of future results. Use Risk Capital Only
February 26th 2021 Option Professor Opinions & Observations
Greetings Everybody—The Winds of Change were blowing on Wall Street this week as the rapidity of the increase in interest rates gave sellers legs. BEFORE we provide our insight This Week….we want to REVIEW & ASK you a couple of things. STOCK MARKET- 1. We were bullish coming off the panic March Lows as we said OPERATING LEVERAGE would make earnings zoom. 2. We initially told you that Tech & Covid stocks (PTON ZM TDOC) would lead. 3. We then told you to start switching to VALUE (Banks-Energy-Retail -Industrials) as the yield curve would steepen & consumers were flush with money as their leisure expenses were eliminated & transfer pay arrived. 3. We recently said that the end of Feb and up thru June could see a selloff as the PMI’s & ISM numbers may roll over (leading indicator of spending). interest rates were rising (GDP-Stimulus-Inflation) plus many technical indicators suggested markets were way overbought (moving averages-valuations-rampant speculation-margin debt). 4. We told you the Gold run up was parabolic and would not hold up and we would see months of back & forth action to work off excesses. We told you Copper was going to fly and BitCoin was going to have a huge move up as the year after halving is great. 5. We told you to avoid long dated bonds and the Dollar would fall but temporarily hold 88-90 on the Index. We said early in the year Europe, Asia & Emerging Markets would have a good run because of that U.S. Dollar weakness and our thirst for imported goods. 6. We told you Crude Oil was going higher since we had a capitulation at -$37 a barrel and due to lower rig counts, no private equity-fracking and a return of better demand. 7. We told you that Soybeans were a steal at $8-$9 as China was on the horizon as a huge buyer, also that Sugar was a bargain at 12.30 and Coffee above 100-110 represented a large opportunity…..Readers said to us & we believe we have ADDED VALUE to your research through our timely opinions & observations. NOW we Invite you to become a SUBSCRIBER so that we can share SPECIFIC ideas via our FOCUS LIST….NOW we ASK you email us today at [email protected] & get the Special Monthly/Yearly Rates. There are a number of ways to SUBSCRIBE so Learn How to Join Up Today!
The two operative words we would use regarding the markets right now are PERSPECTIVE & MODERATION. Interest Rates have risen sharply (some compare it to Scuba as when you come up faster than your bubbles you get the bends). HOWEVER it is important to note that REAL YIELDS after we can adjust for inflation are still VERY LOW. The sell off we have seen in Stocks Bonds & Commodities and the valuation compression due to higher rates should see prices MODERATE in the months to come as Inflation is unlikely to surge much past 2 1/2% as structurally we are set up as in the past. Inventory build up and Constraints on oil supply may be transitory in Q2. Copper supplies are increasing to China, Texas refineries are rushing to open to get in on spreads & applications for home buying may be leveling off while inflation hedges sold off like Gold (-$46 Friday) & BitCoin (GBTC lost 22% a it traded at a Discount rather than a Premium), TSLA & the ARK funds also lost ground. IF we see S&P UNDER 3800 and VIX readings ABOVE 25-30 it is reasonable that we may NOT see a move to SP 4000 before a slide. We anticipated the year end rally & the January Effect but now & for awhile have felt collars-married puts-replacement calls have made a lot of sense. We explain to subscribers the mechanics of these hedging techniques.
Lots of data came out this week with claims showing a drop, durable goods (large ticket items) jumping 8% though food & services numbers were weaker. The Consumer is spending +2.4% (biggest increase in 7 months) and personal income up the most in 9 months. Inflation was up to 1.5% annualized with a big jump over the last 2 months but still below the Feed target of 2-2 1/2%. One concern is Virus Variants which some believe may pour cold water on recent improvements in Covid numbers.. we’ll see. Some of the stocks we’ll discuss are ORCL LPX QCOM KEY CME TWTR WSR UBA and GS PNC MET MMC-banks tech energy & Mid Caps and many more. Our VALUE stocks outperformed Growth in February the most in decades.
The story here is one we have told you about for many many months. TLT topped out at 180 on a blow off possibly generational top…when it broke 155 it cemented the next move down…we said to stay with short term corporates and avoid duration like the plague. In fact Jamie Dimon said months ago he would not touch 10 yr Treasuries with a 10 foot pole. We are oversold so a rally is always possible but we have ideas on ways to generate income so join up and check out our Focus List. High Yield is ok because the average duration is only 3 1/2 yrs and credit risk has not been an issue,, speaking of issues we saw $84 Billion already come out in high yield 2021. The 7 year Treasury auction was a disaster as it had the worst bid to cover ratio ever…no rest for the wicked as there is a 10 yr auction March 10 and a 30 yr auction March 11….hope there’s ink in that Fed printing machine. Investment grade has a average duration of 8 1/2 yrs so caveat emptor.
US Dollar/International Markets
As we told you recently the Dollar Index has been holding the 88-90 area and a move above 92 may instigate a blow out the shorts kind of rally. The yield advantage we enjoyed over Asia & Europe has returned so hence the positive spin but the fact that no one wanted our 7 yr Treasuries is trouble. The International markets were on our focus list all last year a the Dollar tanked but we have been fading it lately…the right thing to do. Brazil is in the tank but Mexico is hanging in there so far buoyed by our import lust. Subscribers get a look at our focus list in this arena so join up today.
Crude Oil/ Natural Gas
We been positive on oil for about a year but now we are concerned that Texas refineries are rushing to get back & Saudi & Russia may want to pump. Supplies dropped 8% in 2020 (something we told you would happen with all the supply constraints) as this was the first time in 4yrs for a drop. Later we should see further upside but hedging was a good idea EOM. Natural gas prices tanked in the last 10 days and we told you our favorite LNG was ripe for a pause to refresh….we do maintain a Focus List here too.
Gold Silver Copper Platinum BitCoin
Listening to our view on precious metals has saved people from getting whacked in Silver & Gold as priced retreated in both bit more so in Gold which of no surprise to us is still working off that absurd run to $2100 last year….but we do believe in it long term and now that we have lots of dry powder because we didn’t chase prices.. we will look for an entry point. Platinum has started the year off well and as long as 800-1000 holds up we believe the re-opening of car production could cause a catalytic converter squeeze on supplies. Copper is seeing supplies being sent to China causing a selloff which we told you would come as prices are way above moving averages and our stocks that we brought to your attention many months ago FCX SCCO hit nosebleed levels. BitCoin may have seen the bloom come off the rose as GBTC got hit for 22% while Bitcoin itself fell 17% due to a loss of premium in GBTC as it traded at a discount suggesting mass exodus. We told you Bitcoin is illiquid but finite supplied so EXPECT 30%-50%+ declines and use risk capital and dollar cost averaging if you want to play ball. We have a Focus List for metals-mining-crypto… so email us & Join Us Today!
Soybeans Sugar Coffee
These three markets have been great for us all year but we are concerned that Soybean prices are far from their moving averages (overbought) and we hear some grains (Corn) may be seeing demand back off due to high prices…we’ll see….a drop under 13 could spell correction. Sugar has been our buddy since 12.30 and recently hit a high of 17.52..not bad…but like soybeans..prices are far from moving averages but staying above 16 still sets up well but the 200 day is in the 13’s. Coffee has held 100-110 but has had trouble with 140 resistance.. the real money is on the other side. We’ll see if a stronger dollar and higher interest rates are catalyst to close the gap between current prices and 50-200 day MA’s. We keep up a Focus List here.
Again..email [email protected]….Learn How to Join Us Today!
REMEMBER There is a substantial risk of loss in short term trading and option trading and it is not right for everyone. Consult you brokerage firm/broker/advisor to determine your own suitability. Past performance is not necessarily indicative of future results. Use Risk Capital Only