Jim Kenney

Author Archives: Jim Kenney

Stock Market-Sell The Fact- VIX Spikes-What Now? Read

January 29th 2021 Option Professor Opinions & Observations

Welcome Back!…We told you last week that the financial gave you a roadmap of how things would play out during this earnings season….that is great reports followed by selloffs and this week gave you further evidence as AAPL & many others had RECORD NUMBERS but had substantial DROPS like JPM Citi BAC ect….no surprise to us…..blame it on Reddit & squeezes if it makes you feel better but the reality is Powell said “cool economy” and also Apple is looking for wearables & IPads to soften in Q2 and SBUX wasn’t so keen on the near term. Like we said…only a moron wouldn’t be looking for a correction with all the indicators in the red zone. SUBSCRIBERS were also told about a feeling we had that may be a factor….Congress is looking for a huge check to be written for stimulus…how’s that going to happen if we go to SPX 4000?…it’s like telling the welfare office you’re running late because your Rolls Royce is getting washed:):)…..everything got hit this week from Value (financials-industrials-materials-energy) to Tech & Communications… the place to be was vaccine guys MRNA NVAX while JNJ followed the sell the fact crowd. OK.. let’s talk about the elephant in the room & our opinion….the shorts in those stocks had too many positions (more stock sold than exists by 40%!) & too much leverage (sound familiar) and and every time specs buy call options….. the market maker must hedge by buying stock plus all the guys short panic to get out by buying stock and there goes the vacuum. They shut down trading because the players losses were exceeding their deposits leaving the casinos (Robin Hood Interactive ect) on the hook to pay the winners and chase down losers for money OR shut it down to stop the music and sort out where the firm is at (Do you want to be the next MF or Lehman?)…..sounds crappy but get your magnifying glass out on those docs you signed and buried in there you will se it’s perfectly legal. Some of the shares include GME BBY BB KOSS AMC NOK NAKD AAL TRVG CTRM SNDL and others but we told SUBSCRIBERS that our experience is that when the short covering is done and the specs are out and restrictions are put on…the end game is a collapse in price….this is an old story.. ask the Hunt Bros. 1980 RIGHT NOW…we must remember the LONG game which is that Millennials are in the game and will be inheriting trillions in the next 10 yrs. Household have money and no interest in the bank…according to some 94% of flows went into Bonds in the last 10yrs and only 6% in stocks….rates are low and while inflation will push them higher…not enough…so expect an ongoing bull market over time with valuations expanding (S&P 30 P/E?)….not unlike a real estate market (L.A. & NYC & now nationwide) where the money flows come in and now you see per sq. foot values go from 200 bucks per to 800… our LONG TERM MOVING AVERAGES (which have only been penetrated a few times since 2011 & only extremely briefly as they have continued to uptrend)…..come in around S&P 3000 with shorter term ones at 3250/3120 so there is a lot of real estate for the market to move around and still be bullish….end of story…GDP according to Bank of America is projected up 6% in 2021 and consumer spending on cards is UP 9% in Jan 2021 OVER Jan 2020…should show up in prices later…so dollar cost average your way to a nice portfolio and maybe focus where VALUATIONS are reasonable and VALUATION (P/E) expansion may be more pronounced in the months & years ahead & what the heck..some pay very sizeable dividends to boot! To SUBSCRIBE and Get our ONGOING IDEAS email [email protected]

Stock Market

The story this week was great companies make great profits but get sold off as Q2 looks dodgy and losers in the Reddit game may be selling their liquid winners to rebalance or take from Peter to pay Paul. Hey liquidity problems certainly has something to do with BitCoin & TSLA meteoric rise & also we know sometimes declines and order imbalances are at the root of volatility. The VIX had a double peak at about 38 this week and Friday only saw a 33 handle despite the drop so a bounce would not be shocking….take out 38 and 3600 SPX for cause and the shock may be testing 3400 (last years highs) & an outside shot at 3200 (the highs of June 2020 & pullback lows of Q4 2020 There is a lot of rose colored glasses still out there….while getting above SPX 3740 could fill the gap at 3780…..we really need closes ABOVE 3830-3860 to re-open the SPX 4000 banter….we’re flexible..don’t make trends..follow them We like fintech innovative, genomic, space, robotic/AI …ETF’s. & a focus list. EARNINGS next week include AMZN UPS PFE QCOM PYPL REGN ATVI GOOG CMG TMO MRK BMY FORD CARDINAL HEALTH & many more SUBSCRIBERS get our opinions/ideas.,.. email us [email protected]

Bond Market

Central Banks are going to have to address their balance sheets at some point and inflation, growth and higher taxes to varying degrees will play a role. This plays well with our short term investment grade and limited term municipals as a parking spot theme but longer term may also be good for our sprinklers in high yield, munis, preferred (banks), secured floating loans & TIPS… SUBSCRIBERS learn where we are focused….email us to join.

US Dollar/International Markets

We have said for the last few weeks that DXY at 88-90 may be a floor as the popularity of short the dollar combined with slow economic numbers in Europe (Germany) & Asia (Samsung missed numbers/Hong Kong got frothy EWH FXI) and with our yield advantage reinstated…the buck could rally & we’re surprised the Reddit crowd hasn’t noticed the heavy short interest. If we blow out 88-90…bar the door Katie & Yellen seems to not be a dollar bull. Rollover is a word we’d use to describe the international markets as they were extended and are now less so….if local currency drops…more to follow SUSBSCIBERS get our insight in both areas..email us [email protected]

Crude Oil/Natural Gas

Oil shares have been in the fade mode for the last 2 weeks as demand concerns have resurfaced and supplies may be increasing..a bad combo for an extended market…we ere bullish ever since we went negative 37 bucks (obvious capitulation) and remain constructive longer term based on a solid reopening. XOM sustained it’s dividend (3rd largest in the S&P) as higher prices granted them better cash flow…we have many stocks that we have discussed and they have really taken off from 9 months ago when we started discussing them….in Natural Gas we have long liked LNG but others with some involvement like APA XTO Devon & Baker Hughes are of interest SUBSCRIBERS get current oil/gas opinions-email us [email protected]

Gold Silver Copper BitCoin

Our view on Gold & Silver remains & has been spot on…..the mining shares are in a funk (although rumor had the Reddit crowd bidding up Silver ETF’s maybe they see a collapse in the Gold-Silver Ratio now at 68 and was at OVER 100))….and spot prices failure at Gold $1960 and Silver $28 has us feeling that patience could be a virtue…inflation is due by EOY and our view of a short term low…rally…decline and then zoom is still valid….the road to big bucks takes you thru the resistance levels..should be plenty on the other side…so when we see a green light we’ll say it…maybe if we’re lucky the metals will test longer term moving averages still well below current levels…plenty of bulls..coin buyers and others stuck in at higher levels. We have a group of Gold & Silver ideas that could be very timely by EOY. The trees don’t grow to the sky which is apropos for the Copper market which has backed off the highs as well as FCX which we’ve been keen on for months..we spoke of trimming covered calls married puts replacement trades using calls & spreads…all of which subscribers can inquire about. BitCoin is not a very liquid market so we spoke of a 30% to 50% decline coming and we had a 35% one and now it’s back up….risk capital and dollar cost averaging via GBTC is our preferred method and we share our ideas To SUBSCRIBE…Get Our Insights…email [email protected]

Soybeans Sugar Coffee

We told our readers about soybeans and the impending China buys in the $8-$9 range and we proceeded to break resistance @ $10 and went to $12..after a pullback the break of $12 took us to a blow off top at about $15 where we saw a sizeable pullback and recently a rally..as with any parabolic move it is meandering to work off it’s excesses…to be followed by potentially more upside…..Sugar gave us a buy signal at 12.30 and we ran to 16 resistance.. we have been teased with false breaks above 16 and now trade under resistance….the road to milk and honey is ABOVE 16..let’s see if we can break & maintain prices…Coffee has been a rid that started under 100 went to 135 area back to support at 100-110 and back up toward 130 only to trade now at 122…the green pasture is ABOVE 140 and if we are in a commodity structural bull market…the future should be bright if we can sustain above 100-110….all three markets are potentially exciting in 2021 SUBSCRIBERS get updates on our views..email us @ optionprofessor @gmail

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.

Stock Market- Is it a Pause to Refresh or Rollover? Read It

January 23, 2021 Option Professor Opinions & Observations

Welcome Back!…We saw the markets make new highs and then do a bit of a fade by the end of the week and go home with its tail between its legs. When you have excessive margin debt…Inflows into equity ETF’s and record highs on sentiment surveys plus some divergences between the new highs in some areas and the RSI….and top it off with prices WAY ABOVE their long term averages (the mean) ….. you would have to be a moron to NOT be on the look out for a correction. Areas that have been good to us like VALUE & Cyclicals ( energy, financial, industrials, materials, airlines (Dow Transports Index), hotels ect) all failed to hold the gains of early in the week. The two bright spots were the Russell 2000 (Small Caps) ran back up to close near their 52 week highs in the last 2 hours of trading and the tech heavy QQQ’s held on to most of the weekly advance. SO WHAT NOW?.. Our opinion is that the lows at SP 3740 is a key area….short term charts have rolled over and if we blow out SP 3813 and then 3740…the pullback may have just begun without hitting the SP 3900-4000 area expected by many. Next Week we have EARNINGS from KMB MSFT VZ JNJ AXP T AAPL TSLA BA FB MCD V AAL AAL LLY CAT CVX HON CP and others which is a lot of new data albeit backward looking….we suspect the RISK is that like the financials it could bring a BUY the rumor and SELL the fact outcome as Q1 and late 2020 (holiday sales) and persistent high unemployment (another claims @ 900K) could spell a stumble early in 2021 & fog up those rose colored glasses…a boatload of stimulus awaits & so does the big opportunity. Email us to learn how to subscribe to get the weekly radar list & updates.

Stock Market

While a lot of the market did seem to lose some legs this week (such as pot stocks & BitCoin-MJ & GBTC); others like AAPL MSFT TSLA GOOG FB BABA (relief to hear from Ma?) Game Stop ILMN GM PENN TEVA TDOC did well while real estate & utilities plus international (Europe Asia China) did ok……AAPL is trading near 40X and busted to a new high.. if they report accelerated growth..150 not off the table but pity the bulls if it’s a miss.. Most of these and a lot more are updated in greater detail intermittently on our focus list for subscribers. Suffice to say that preparing for any signs of a correction (covered calls, collars married puts option replacement trades) is on our radar but await price confirmation. Watch your VIX to see if we break 20 and take out SP 3875…if so the train may still have a few stops on the upside. Stocks that are in good uptrends (e.g. Financials) that have had big runs & dividends plus fat call premiums are worthy of a look from the covered call writer to capture additional cash flow & downside protection…..If you believe it’s time to take the time to Learn about the uses & risks of various tactics email us @ [email protected]

Bond Market

A bounce in the bond market off the steep sell of on TLT which had a blow off top in March at 180 and a slow steady grind lower to 150. Should stocks sell off….the bounce may have more legs as in recent time short term very bearish bets have been huge. The mantra is best case 1.35% to 1.50% on 10 yr Treasuries with whisper numbers to 2%+….. that’s with an expected handle on GDP at 6%-7%+….all we see is a stampede into Tax Free Munis in flows into ETF’s ect….an area that subscribers get complete details and of course short term treasuries as a base with high yield… loans…preferred… emerging market debt sprinkled in there to boost yield…the latter may be kept on a short leash….with state & local aid & higher taxes…we have long felt Munis that were short-intermediate term & funds with durations under 7 yrs would serve us well…so far that is exactly the case. Each week subscribers can get specifics on how we approach the fixed income game.

Us Dollar/International Markets

The US Dollar so far has held the 88-90 low mark on DXY but certainly has plenty of clouds above. The yield advantage that gave us a stronger dollar has returned to a degree and growth in Japan & Europe stinks when put in comparison to the USA so we would not be surprised to see a counter trend rally that no one seems to be positioned to see. This may be a reason why Gold & Silver have not held their rallies & other big bulls in grains/Foods/Oil have faded a bit lately…..hard to trust the dollar with a stimulus package & 18 million receiving assistance but sometimes the market surprises traders. If it busts under support at 88-90…bar the door Katie…because the 20% dollar drop being predicted will look much more real and popular. We have levels on the Euro, Yen Aussie & Canadian $$ plus the BP that we believe are very important which we share with subscribers weekly in our updates. The international markets (particularly EM) has benefited from the weaker dollar so if that dynamic is to pause one might conclude a corresponding pause in the bull runs will occur as the overseas trades may be a bit crowded. Reverting back toward the mean is natural at some point and we may be approaching that reality in the next 30-90 days….if next week we see sizeable weakness in Europe, Emerging Markets, Asia & Latin America (started already?)..then some trimming may be in order. We follow specific regional international markets for our subscribers each week.

Crude Oil/Natural Gas

The oil/energy stocks have been losing altitude as demand fears and supply concerns have resurfaced (poorer countries want to pump for the $$$). We got a failure at 54 WTI this week and if we get a 40 handle in the weeks to come it could be problematic…..long term moving averages that we follow still should support markets on any pullbacks and those who agree with our long held longer view should scale in on any lower prices.. the combination or low natural gas prices domestically with the high prices overseas and in Asia has led us to be bullish on LNG for a long time…despite potential backing and filling.. we remain so…subscribers get our focus list weekly.

Gold Silver Copper Platinum BitCoin

We told you Gold failed at $1950 area & Silver failed around $28 and those are the levels that if surpassed would put those 2 metals in a position to accelerate….longer term they should take them out but if we take out Gold $1800-$1750 and Silver $24-$22 on the downside then the timetable for such a move is extended. Some Elliott Wavers are suggesting a low in early Feb followed by rally and then a pullback into June and then a rally to rip your face off going into late 2021. We follow individual metal shares & broad based ETF’s for our subscribers which includes updates on key ones. Platinum is interesting to us for a number of reasons..the scarcity of supplies…the industrial value and most important is the relative uncrowded trade as compared to Gold& Silver…which could spell lots of volatility as should interest increase (in our opinion it will) & be met with buying volume..a recipe for a tangible asset to appreciate could occur….many ways to approach it…Copper prices got bouncy as supply demand news changed a bit…prices being extended always contains a risk of reverting back toward the mean so further sell of could lead to some acceleration….the stocks we follow in copper have been big winners and taking some off the table or defensive tactics may be appropriate if prices buckle. We told you BitCoin can have 30%-50% corrections along the way & suggested that the 40-50 area on GBTC could be a neighborhood for that to occur (in 2 weeks we got to ballpark 48 and pulled back to 31 or a 35% DROP!)…..is the pull back over?…maybe as the year after halving is supposed to be gang busters (3X?) but as e told you 95% of supplies held by 2% of accounts means lousy liquidity….so despite marquee names aligning themselves with it…we maintain dollar cost averaging and risk capital be used…if stocks drop maybe 20-25 can be had…..we update subscribers weekly.

Soybeans Sugar Coffee

Soybeans which we have been keen on since 8 bucks had a short term blow off top last week to about 14.50 (reversion to the mean) and got good news (for the bears) out of Argentina which led to mass selling culminating Friday with about 60 cents drop….should have some support at former highs at 12-11-10…ditto corn & wheat (reversion to the mean)….one Ag Market that is soaring is Live Cattle as the high corn prices kept cattle out as the expense to feed them became too great (2.5%+ rally Friday)..eat fish:):) Sugar & to a lesser extent Coffee followed what we talked about generally about commodities as they went on a big rally….way above LT moving averages.. are reverting to their mean. When markets make parabolic; we suggest if you’re in scale out of positions or scale into defensive tactics like covered writes, collars, married puts, and options as replacement trades. Subscribers can submit questions on this and other areas for response. How Can You Be a Subscriber?…..shoot us an email at the email listed above

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.

It’s Here! 2021 All Markets Forecast-Option Professor-Enjoy!

January 15, 2021 Option Professor Opinions & Observations

Welcome!….Read This Now—We Have a Question for You at the End..

Here’s the 2021 Market Forecast & Ways to Play It from The Option Professor that will provide insights into the opinions & observations of what’s ahead in Stocks, Bonds, Us Dollar/International Markets, Metals-Gold Silver Platinum Copper & BitCoin (GBTC), Agriculture & Food plus much more. The rampant consensus view of a great year for stocks-with inflation picking up–international markets up-rates rise-dollar weak-unlimited stimulus-Fed accommodation could very well be hit by a headwind by the end of Q1..in the form of steepening yield curve predicting PMI’s to rollover toward 50–stimulus stops before jobs return–Livingston Report suggests slower growth & economic numbers in 1st half of 2021–ect. We look for an outstanding reload opportunity in many markets BEFORE we get the move toward the rosy numbers suggested by the major firms. Each week we will bring updates on our opinions on the areas listed below.

Let’s Go!

Stock Market

When we are looking for GROWTH we look toward VGT SMH VCR MGK VOT VBK which exposes us to Information Technology, Semiconductors, Mega-Cap Mid Cap & Small Cap Growth names, Consumer Discretionary and other individual names. We focus on our proprietary mix of multi time frame moving averages and relative strength gauges among other things to determine trends and overbought oversold conditions. For the VALUE & Dividend & Distribution Cash Flow goal we turn to MGV VOE VBR VYM VYMI VOE (mega-cap mid cap small cap value) plus sectors like VFH VDE VPU VNQ (Financials, Energy, Utilities, Real Estate). We have looked to epicenter stocks (those derailed by Covid) BJK PENN MGM CAR JETS ABNB HLT MAR QSR SBUX among others to gain diversity to gaming, leisure-rent a cars-hotels-restaurants ect.. We see IBUY & XBUY as great opportunities for e-commerce and XRT TJX ROST WMT TGT LOWE as a way to play retail. For access to the IPO markets which had a big year in 2020 we look at IPO and for ESG investing we see ESGV & VFTAX as decent vehicles as their holdings are diversified and quite respectable. Transportation is not to be ignored as e-commerce ect. looks good for IYT among others. Payment processors (SQ PYPL IPAY V) are on our radar plus Cyber Security & Cloud Computing as well (HACK CIBR FEYE & SKYY WCLD). Additionally we look toward thematic & potentially disruptive technologies thru SNSR ARKF ARKQ ARKG ARKK and soon ARKX (Internet of Things-Fintech Innovation-Autonomous Technology & Robotics-Genomic Revolution/Precision Medicine-Innovation & Space). Some potential disruptors for 2021 include EXAS IOVA CDNA PSNL TDOC NVTA PACB CRSP. Another interesting thematic is MILN which tries to focus on Millennials and their activities. Playing the theme of 5G..we look to SKYY QCOM TSM TMUS as best bets. When looking for portfolios designed for asset allocations of 80/20, 60/40, 40/60, 20/80 we turn to VASIX, VSCGX, VSMGX, VASGX for that objective.

Bond Market

Yields have risen quickly at the end of 2020 & the start of 2021 with a breakdown of TLT under 155 and shouts of 1.5% to 2% on the 10 yr Treasuries this year. Maybe a bit ahead of their skis but here’s our take for this asset class. Duration & credit risk are the 2 headed monsters when discussing debt (throw in the value of the currency you’ll be paid back in for good measure). So, in our opinion when we are looking for some yield, decent credit quality and shorter duration VFSUX and VMLUX is where we turn (short term corporates and limited term municipals) ..when we want to go out further on the risk spectrum to seek greater yield ..we turn to VWLTX VWEAX VWOB PFF FFRHX (Long Term Munis, High Yield, Emerging Market Debt, Preferred, Loans) which have varying risks of duration, credit quality, possible currency-government stability, and liquidity among others. The Fed monthly buying is huge and a change of circumstance may be slow.

US Dollar/International Markets

Our view on the US Dollar in 2020 revolved around our interest rate edge over Europe & Asia going out the window as the FED brought fed funds toward zero thus we thought the DXY 104 top would not last and the break under DXY 100 confirmed it. Recently; though we recognize very dodgy fundamentals, the rise in our yields returned our yield advantage and the popularity of being “short dollars” made us feel the 88-90 range could hold up for now. The EURO has support around 120 & 115 which is about where the 50day & 200 day moving averages reside…its neighbor, the British Pound benefitted from improved hopes for Brexit where support is at 134 & 129 basis their moving averages. We have been bullish the Australian Dollar since the break above & holding of the 70 level (what a deal 55 was in March-twice as rich & move to Queensland:)…now at 77.support at 75 & 70. The Japanese Yen has flourished as our consumers continue to gobble up Asian goods (China record trade surplus) so while a pullback could happen as retail sales in Nov & Dec slowed…longer term their economy may shine. In sum; the trends for foreign currencies extended and a risk of reversion. The international markets are supposed to be the land of milk and honey as global stimulus is around 29 trillion and their valuations are cheap to ours by comparisons…we look to VEA VWO VWIGX VPL VGK for exposure to Worldwide, Emerging Markets, International Growth, Pacific and Europe. Specific countries can be had with EWW EWZ GXG EPOL TUR EWG EWU EWJ EWH INDA EWY EWT EWS for risk in Latin America (Brazil-Mexico-Columbia), Eastern Europe (Poland-Turkey), Germany-UK, Asia (Japan-Hong Kong-Korea-India-Singapore-Taiwan)….plus China (FXI & KWEB).

Commodities may be repricing like 2005 as supply shocks, a weaker dollar and underinvestment in the sector leads to structural bull mkt. It’s started?

Crude Oil & Natural Gas

Our view in 2020 was to get into oil early in the year as -37 dollars a barrel was as bad as it would get. The industry has consolidated and supplies and the ability to reload supplies may be tight as the recovery unfolds and usage and jet fuel normalize a bit. While prices of oil & oil stocks have rebounded strongly and there may be a likelihood of price giveback…we believe 2021 will be a net big year for this sector. A weaker Dollar makes local currencies rise and increases prices to boot. The names CVX COP PSX KMI SLB HAL OXY VLO HESS SU EOG APA CXO and others are always in the hunt; we also turn to VDE for a one stop shop…for those who like renewables we watch BEP & ICLN and for Natural Gas LNG and stated as much since May 2020 which has gone from the 40’s to almost 70 today.. overseas NG prices are up. Finally; China is light on the buy quotas in the Phase 1 deal-more to come??

Gold Silver Copper BitCoin

All the people who bought Gold in 2012 at 1900 finally got their money back in 2020! We called the breakout on Gold at 1400 and Silver at 20….then called the parabolic top at 2100 area Gold & 30 bucks on Silver (way above M/A’s and sentiment was intoxicated). We then called for a pullback closer to the M/A’s 1 year at 1775 Gold & 22 Silver which we just saw…we then said 1950 Gold 28 Silver are the Great Wall separating the Metals from big gains and both markets faded off near those levels. Over time we should exceed those levels IF the dollar/fiat money weakens further, inflation gets well above interest rates, and BitCoin doesn’t steal the show. We will gravitate toward GDX GDXJ NEM GOLD AUY RGLD FNV KL KGC on Gold and SIL SILJ WPM PAAS on the Silver. Copper has been a metals champion this year and we recognized hat at 2.50 and its recent highs have been 3.75 ball park, AGAIN the weaker dollar makes prices go up on hard assets as they cost more to produce (the resource trade) and 45% of Copper comes from Chile…if their peso goes up so can copper prices and their were Covid supply interruptions which is a theme of many commodities this year. We have told readers about FCX & SCCO (Freeport-Mcmoran & Southern Peru Copper Corp) since we broke above 10 on FCX (June ) Now @ 30 and above 35 on SCCO Now @ almost 70..both markets extended in price & RSI.. expect volatility and buying opportunities. BitCoin has had a off the charts year as 95% of supplies is controlled by 2% of the accounts…translation…it’s illiquid and when the herd runs in it squeezes shorts and when they want out (like when the stock market corrects)…you get a tank job. We use GBTC as a proxy and we got our buy signal in Aug/Sept between 10-15 Now @ 39…our guess is that if stocks correct in Q1 sometime….that typical 30% to 50% correction is BitCoin is coming….some say the year after halving (like 2017) could lead to a 3X by year end…we’ll discuss dollar cost averaging as a tactic

Soybeans/Grains Sugar Coffee

The crop report got an already bull market to be concerned about supplies (common theme). We brought Soybeans to readers attention in Q1 in the $8 range thinking we were not going to $7 and China had a lot of buying to do (Q3 China buys jumped 63%). Corn & Wheat also had big 2020 and; while all are quite extended basis price, RSI and distance from moving averages , supplies have been a concern. China is also behind on their buys in this area basis the Phase 1 deal so additional buys from they not off the table. For those who abstain from the risk of leveraged contracts and options…one to look toward ETF’s on Corn (CORN), Wheat (WEAT) and Soybeans (SOYB) to see if they are appropriate. Other way to take risk GPRE (Green Plains). Sugar prices gave us a buy signal when the 50 day MA crossed the 200 day M/A and that was at 12.30…we said resistance was 16…it ran thru it and has pulled back only to close at 16.45 as of this writing…potential sizeable in 2021 and to avoid contracts & options…the ETF is CANE….finally Coffee was a big winner earlier in 2020 when it ran from UNDER 100 to almost 140….it was extended and then pulled back toward 100-110 area which has held nicely…closed at 128 as of this writing…so the floor appear to be 100-110 and the ceiling 135-140….will a weaker dollar and supply demand dynamics take us for a run in 2021??…..for stock players the ETF is JO.

We will be following many things for you in our weekly updates on these and other ideas. The stimulus, vaccine distribution and the cyclical nature of the Virus (spring is coming) and the consumer is ready to go. We expect unemployment to decline throughout the year & also GDP & Earnings to be strong in Q3 & Q4…and valuations on some sectors to expand while others tighten. Rarely do markets behave like trained seals/Updates to follow.

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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


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

January 8 2021 Option Professor Opinions & Observations

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

Stock Market

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

Bond Market

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

US Dollar/International Markets

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

Crude Oil-Natural Gas

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

Gold Silver Copper BitCoin

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

Soybeans Sugar Coffee

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

REMEMBER There is a substantial risk of loss in short term trading and option trading and it is not right for everyone. Consult your brokerage firm, broker-advisor to determine your own suitability. Past performance is not necessarily indicative of future results. Use Risk Capital Only


Stock Market-Binary Week Ahead-Big Choices? Read On

New Years Eve 2020 Option Professor Opinions & Observations

All of Us @ Option Professor Wish You A Very Happy & Healthy New Year!! Next week is potentially a very disruptive week as we have the deciding Georgia elections & Trump came back to D.C. early to get ready for the Jan 6 stupidity to reverse elections (59 lawsuit losses is indicative that you have no case)……but of course he has to continue the charade as he has pilfered hard working people to send in their money (much of which he will keep for himself) so if he doesn’t act like it’s a real fight….it would look like theft. We closed out 2020 with some pretty decent numbers with the S&P 500 up 15% Nasdaq up 47% on top of 30+% in 2019 Russell up 18% and the slow poke Value down -2.3%…….HOW did this happen during a pandemic??…..We Told You Back in MARCH…#1 LIQUIDITY & #2 OPERATING LEVERAGE #3 LOW INTEREST RATES ALLOWS FOR HIGHER VALUATIONS….to explain simply….when someone has a PRINTING PRESS in the basement and is willing to use it (The Fed-Treasury)..you must RESPECT that fact….AND when companies have less employees/real estate (overhead) and consumer spending comes back almost to pre covid levels you will get good EARNINGS which we opine will be evident in 2021 as we can see the massive and sad UNEMPLOYMENT remains stubbornly high. Finally NEGATIVE REAL INTEREST RATES helps expand & sustain lofty valuations……that’s the story for 2021 as not only stocks but GOLD BONDS EM BITCOIN REAL ESTATE all had banner years which happens when you DEBASE the unit of measure namely the DOLLAR which fell almost 15% from its peak and 3% for the year. We anticipate 2021 to see a CLOSING of the huge GAP between Growth and Value MUCH like we saw this year the GAP between Growth & S&P and the SMALL CAPS-TRANSPORTS tighten up considerably. Is there a run in the S&P to 3800-4000 area BEFORE a sharp decline toward 3400-3600?? We may know that answer by the end of next week and we & you should be prepared for both (liquidity-collars-replacement trade hedges)-do you really understand what was just said??..if not…email us @ [email protected] also learn what are the markets we are focused on for 2021….Cheers to All!!

Stock Market

Briefly…our view is really illustrated in the numbers we provided to you above…which is the ridiculously large gap between growth and the S&P/Russell and to a greater extent Value. Yields are rising as inflationary pressures are building. This is not great news for very high valuations (tech-stay at home stocks) as valuation compression through a real evidence risk (steepening yield curve) BUT it is great news for sectors we rotated into after FAANG peaked in September such as Cyclicals…Epicenter..Industrials. plus Banks/Financials-Energy….EM–Materials–Precious Metals & Real Estate We have been paid handsomely on dividend/distribution cash flow while watching the underlying assets appreciate…replacing Bonds for income. We have ideas we believe have value for 2021..ask @ [email protected]

Bond Market

Well when Jamie Dimon JPM says he wouldn’t touch 10 Yr Treasuries with a 10 foot pole maybe it’s time to trim:):):)…Listen we told readers back in March that the yields probably hit HISTORIC blow off LOWS not dissimilar to the Blow Off HIGHS Volker gave us in the 80’s. The number don’t lie..people do…The Fed’s balance sheet exploded…money supply up 25&..national debt 29-30 Trillion…Trade Deficit at record levels…dollar tanking (some forecast 20% drop IF we break 88-85 DXY….helicopter money with no end in sight (millions out of work/close to evicted)….Do you want to loan money for decades at 1%??…if you do you’re a better man than us. Our position has been all year to hide out in short term corporates and limited term munis and sprinkle High Yield-Preferreds-EM Govt Debt-Secured Loans to enhance yields…this has been spot on value added information to our readers…Do you have questions??…email us at [email protected]

US Dollar/International Markets

This is another area where we believe we added value to our readers as we told you of a market top in the Dollar around 104 and a breakdown on the break UNDER 100….we spoke of buy signals in the Euro at 110…the BP at 130…the Aussie at 70…Japanese Yen at 90…as the Fed wants & is getting a weaker Dollar….will we get a counter trend bounce?..the the Republican win this week and stocks sell off…very possible as the lean is very short. On the International Markets we have been adding value all year by pointing readers toward Asia…Europe & Emerging Markets…the lower Dollar is a blessing to them…their valuations are way lower (value) and we can see from the TRADE REPORT that they are sending our spend crazy consumers lots of stuff to buy. Questions on our focus list-email [email protected]

Crude Oil/Natural Gas

We told you when we went -37 on Crude and OXY bonds 10yrs out non callable were paying 35% that that smelled like capitulation and it was. Our view has been any pull back would be limited to 30 bucks a barrel and the future looked bright for oil & oil stocks (although XOM is struggling to maintain a dividend program that costs 15 Billion)…we still like thye sector (golden cross just occurred) an LNG our natural gas play is still a favorite BUT we have others-focus list..email us at [email protected] to Learn

Gold Silver BitCoin Copper

We believe our input on Gold & Silver this year added real value midst the over-hyped panic that BEGAN in March and ended in August….we told readers of the BREAKOUT above 1400-1500 Gold & Silver above 20 and WARNED of the OVERBOUGHT condition of 2100 Gold & 30 Silver where selling trimming hedging was the thing to do. We told you of pullback toward 1775 Gold & 22 Silver (close to the 1 yr Moving Average could be a time to buy some….and NOW we say if it can clear 1950-2000 Gold and 28-30 Silver then the big bucks rally will make sense….HOWEVER a break UNDER Q4 lows would suggest thatEVERYTHING that has gotten hot due to a WEAKER DOLLAR is cooling off and may need to chop more wood before going higher….Copper has been the All Star this year as it approached 4.00 (we got bullish at 2.50- our two main plays FCX and SCCO were big $$$$. We have been positive PLATINUM since it broke ABOVE $850 as it is 10 X rarer than Gold..may replace Palladium which has gotten expensive and historically trades at a premium to Gold…. BitCoin has been the big story and we have told you all year long GBTC was the play that has been a big deal to listeners….NOW….review the risks..21 million BitCoin which has 2% of ANONYMOUS ACCOUNTS controlling 95% of the supply…..which means ..yes…the supplies are far more restrained than FIAT CURRENCY & GOLD which is the allure BUT it also means Bad Liquidity (hence the wild fluctuations) and the hesitancy to approve ETF’s…..HOWEVER the year after halving (2017) has historically been great and some say 3X in 2021 is possible…dollar cost averaging and limits on cash exposure seems the reasonable to play this..Learn what we focus on @ [email protected]

Soybeans Coffee Sugar

These three Amigos have been on our and thus on our readers radar all year long so we’ll review our opinions…Soybeans we saw as a no brainer in the 8 dollar range as China had to buy before the end of the year… level above 9.50/10.00 confirmed our target to 12 which was achieved …after a brief pullback prices EXCEEDED 12 creating a buy signal which remains in force today……Sugar turned bullish on our radar at 12.30 when the 50-200 day MA’s crossed BUT we have said the 16 level must fall if big $$ is to be made on the upside (threatening to do so as we speak)…Coffee gave us a great rally to 137 and then pulled back and held the 100-110 area which held and now it’s back to the bulls trading at 128…take out 130-140 and this could be an exciting market in 2021..email us @ [email protected]

Do you know others that would enjoy our updates…..send them to optionprofessor.com….put in their email…keep getting weekly updates!!

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.


Stock Mkt-Stimulus?Data? Virus? R U Worried? Read On

Christmas Eve 2020 Option Professor Opinion & Observations

Happy Holiday:):):)…Just some quick notes before we await Santa & get to the really important stuff…..family & friends:)….the stimulus package is like a drunk driver…all over the road…with the people at the helm can’t agree on much and Trump certainly ha gone rogue on the GOP which they are having difficulty processing….The Dems are ok with 3X+ check going out but probably figure there’ a motive (like the Jan 5 Georgia vote)…..figure we get one but the longer it takes the more economic deterioration occurs (800K claims….consumer spending & home sales drop…3 Million household behind on rent & 25 Billion in package deals only with arrears.. Jan rents due??). The economic data comes out on the wrong side and shows slowdown. Deficits are WAY out of control…add the Fiscal & Trade deficits as a % to the GDP and we are 4 standard deviations from balanced (simply put we are not going to balance anything and an infrastructure bill is coming)..so much is piling on at some point the refs (the Bond & Gold Markets) will the throw the flag and say pull it in a notch. We had a breach of some moving averages in the S&P 500 with a move under 3600 only to recover (plunge protection team?)…..decent line in the sand to defend….but we have a huge bull lean with most investors….have your hedging tools out?

Email [email protected] Sectors/ETF’s/How to Protect Portfolio Value?

Stock Market

As we told you TSLA may have a buy the rumor sell the fact vibe after it got listed and we did see a move from around 700 toward 600 then a rebound. Zoom’s another one that has been pressured from 430 to 375…maybe higher yield and steepening of the yield curve (5-30’s & 2-10’s at multi-year HIGHS) may be a precursor of valuation compression in the high fliers and more expansion in the cyclicals-value crowd. Dividends could have been also captured this week in a number of value ETF’s (MGV VOOV VOE VBR ect).. which can be worthwhile to keep an eye on. Biotechs (IBB)..Health Care (VHT)….Financials (VFH KRE)….Tech (VGT)…Ark (ARKG ARKK)…Cloud (CLOU CLDR WCLD) had pretty good legs while the Industrial & Materials basically meandered and oil seemed to slide under it own weight (demand concern). The seasonality & money flow seems to favor a year end rally toward 3800-3900 by Q1…and you can’t fight the tape or the Fed…BUT we can’t lose sight that the news is not good and optimism for buybacks & M&A activity is not a sustainable substitute for actual growth..so price out collars/married puts if things turn sour…question for us? email [email protected]

Bond Market

In addition to the NEGATIVE YIELDS at 1% and expected to climb further as inflation expectations are rising and the Fed is easy…we now have some acceleration in something we told you many months ago (A STEEPENING YIELD CURVE)…again the 2’s 10’s & 5’s 30’s going to multi-year highs….great for banks with buy backs ok’ed had a surge in that last few weeks. To be brief…short term corporates/intermediate munis with some juice out of preferred PFF EM Debt VWOB High Yield VWEAX and Loans FFRHX has been our sweet pot all year..question? email us [email protected]

US Dollar/International

Britain got something going on Brexit….the EU got that 2.2 trillion budget going…..Aussieland has been cooking with some decent econ numbers….and Japan ha had a great stock run so the Dollar has lost its allure…but not even below the 88-90 range yet. some say negative yields will take the dollar down 20%+in 2021..we”l see if it takes out 88-90 first or has a counter trend rally to blow out some shorts…if stocks fade-maybe a run toward the dollar? In the international markets our favorites have been Europe Asia EM Latin America & Eastern Europe..questions? email [email protected]

Crude Oil/Natural Gas

Briefly…we told you crude/oil tock were a teal in March April May and that we believe 2021 can see 50′ 60′ if we recover as anticipated…we see too much demand for supplies…we said we could see a pause/pullback in prices a the virus creating havoc on many demand zones-ergo selling has occurred we will monitor the weeks ahead and state our view on when the drop is over…natural gas (LNG) also on the defensive but we like it longer term

Gold Silver Copper BitCoin

We told you about the breakout in Gold & ilver 8 month ago and hoe the parabolic high would last for a while…also 1775 and 22 good spot to re-enter..but now we are the show me state and need 1950+ and 28+ to prove that the pullback are behind us. Copper had a good sell off but came back by week end FCX & SCCO still remain favorite but keep powder dry for dip. Bitcoin in another orbit (GBTC)..strictly a dollar cost average long term spec deal…maybe Central Banks may come up with their own unit of measure (only way out of fiat currency mess)..using block chain…rock BitCoin hard??

Soybean Sugar Coffee

We told you Soybean would rally big time 8 months ago with China buying…then we told you a break above 950 would lead us toward 12 resistance from a few years back.. we broke above 12 and now 2021 could be a banner year for beans so we look to buy all pullbacks and it look like Wheat & Corn will join the party…..Sugar still hanging in there but need a break above 1550-16 to see big bucks..and Coffee ha held 100 & 110 so stay bullish until the teal leave change….commodities are looking good Reminder-tell all-enter email at optionprofessor.com…get free 2021 updates

REMEMBER There is a substantial risk of loss in short term trading and option trading and it is not tight 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

Stock Market-Did The Fed Give The All Clear? Read On

December 18 2020 Option Professor Opinions & Observations

Here’s an Early Happy Holidays Wish to Everyone & a safe, healthy and prosperous time be had by all!!….Well the Fed played Santa this week and should get the Academy Award for their performance…..they answered the question of ..Are asset prices too high?…which was answered by the idea that real interest rates are negative (and may get a lot so) so valuations can get big expand further and maybe sustained……then right when you thought the week was over as you hear the closing bell…they decide to announce that the banks can start doing BUYBACKS (although a more conservative gift would have been to allow them to increase dividends but that would have favored the grunts who actually need dividend income and not the big boys and insiders who want a 5%-10% on their millions of dollars of stock (plus all the value ETF’s still under their 52 week highs so this is a gift to them as well)…..hey they got everything else to rally….and the banks did reserve a ton for losses that have not materialized and the Fed figures the economy will go nuts sometime in 2021…so el bancos will shine. Let’s hope when this stampede out of lock up occurs it doesn’t include a vastly weaker dollar & inflation as money chases way too few goods and services….cause if that happens…yields rise…Gold flies….Stocks revaluate. We think Clark Kent couldn’t see thru the next 6 months as clearly as every talking head on TV about what 2021 will look like. What we do know is that moving averages don’t lie.. people lie.. and the averages are telling us two (2) things very clearly…..#1 that the stock averages in the USA Europe Asia and just about everywhere are in UPTRENDS…and #2 many if not all are in varying stages of overbought basis current prices and their longer term moving averages…..CONCLUSION….the vaccine news is hopeful…volatility is contracting (still not UNDER 20 VIX)….and value stocks (which we started showing you 5 months ago should play a mean game of catch up & pay handsome dividends whilst you watch the movie. Our guess is that the guys on the sell side are well aware that a stampede of buying has already begun and IRA/401K money pours in during January so do you think they’re going to LOWER their asking prices or RAISE them knowing that after that volume is filled (they would be out or short) and a probable scare coming out of a number of possible origins freezes buyers and then could send prices on the 7%-15% correction (3350-3550SP area)? We suggest you use any big rally to prepare for a rainy day…in Feb-May….it may start raining. Do you have any specific questions? email us [email protected]

Stock Market

Tesla was a big story this week as it made a run toward $700 due its exciting inclusion into the S&P 500 (will it be the AOL of this cycle?) and the volume was insane. Having said that…do you think the stock trading OVER 100% above its 200 day moving average might warrant a look at covered calls/collars/married put spreads??..Well we do and will be monitoring this closely at the start of next week…banks should soar Monday on the Fed ok-ing buybacks & cyber security & cloud stocks also rebounded big time. Hey.. 90% of S&P stocks are trading above their 200 day M/A’s …and things like the Buffett indicator of the Wilshire 5000 divided by the GDP is off the charts as well as the Schiller Cape Ratio as well as the S&P 500 valuation relative to sales. RIGHT NOW.. this all seems to mean very little and if the script of negative yields…Fed put…TINA (no alternative) continues unabated we may see this phenomenon live on BUT….if something changes in this script (doesn’t it always?)…..then maybe there’s a reason why FAANG peaked in Sept just like their was a reason why the Transports/Russell peaked in Q4 of 2018 before recently making new highs. We have a group of sectors and ways to play them & asset allocation models.. email us for info.

Bond Market

Here’s the big story now and for 2021…..NEGATIVE YIELDS….it allows Gold to fly & Stocks to valuate at weird levels & causes the Dollar to tank among other things. Now they seem to admit to a 1%+ negative yield but some say that number is headed toward 6% when all said & done…..that’s what is underpinning the reflation trade..we spoke about leveraged loans (secured debt)…preferred (banks)…high yield..and emerging market sovereign debt plus intermediate duration Munis as place to get yield in the last 6 months and that has been spot on for income investor. Also high yielding sectors like banks, industrials, energy and value shares also were brought to yield hungry investors as a way to get respectable yields. We maintain our opinion but caution that an exodus out of fixed income (treasuries) may occur 2021…..we have ways to position this forecast…email us for details.

US Dollar & International Markets

If the Fed wants to tank the Dollar…they’re doing a good job by highlighting negative interest rates in their communications. The Dollar index has the 1- yr MA 95.36 2 -yr MA 95.27 3 -yr MA 95.38 so we closed at 89.95….UNDER all 3 averages and with a bit more time they will invert to the DOWNSIDE and approaches the low seen in Feb 2018 (88.15). The RSI back then was about 36 on the long term chart and today it’s 34. The Dollar just broke its 3 yr MA in July so another year of downside is not off the table but maybe NOT in a straight line. We told you before ABOVE 110 then 120 Euro 70 Aus were buy signals and the Yen above 90 then 95 Canadian 75 then 80 and Pound 130. On the international markets…..VWO (EM) VGK (Europe) VPL VEU (Asia) and INDA EWW EWZ and Eastern Europe all have been good to us…if you have questions on the international markets-email [email protected]

Crude Oil Natural Gas

Kind of a weird week in energy as oil price did well but share prices gave some back which we told you they may due to the run they’re on and stimulus talk breakdowns and the idea that any increased demand will be met with strong supplies as storage is filling up…..still a believer longer term and the yields are still juicy..a secular bull market in commodities has oil in the 50-60’s next year…that would translate into better share prices….Natural Gas was up this week but our centerpiece LNG languished…..there’s a lot of way to play the energy sector…..ask us how…[email protected]

Gold Silver Copper BitCoin

The train is starting to leave the station in Gold & Silver and it’s a few towns ahead in copper & bitcoin. We told you last week that our call that Gold would go toward $1775 and $22 Silver (near 1 yr MA’s) was spot on and we have rallied substantially off those numbers but HURDLES ahead include 1850-1950 Gold and 26-30 Silver…..GDX GDXJ SIL SILJ all joined the party. Copper is making a run toward 3.75-4.00 and FCX & SCCO have been in our wheelhouse all year long. GBTC (bitcoin proxy) also has been our way to get involver with bitcoin since it was sub 10 buck but now is OVER 100% above it long term average o wait for a pullback that may come from here or a bit higher levels but the proliferation of big boy interest from banks to insurance companies bode well ass does the relative scarcity compared to gold & fiat money. Got questions?..email us @ optionprofessor.com

Soybean Sugar Coffee

Well one out of three got their boat leg back this week as Soybeans took out the 12 resistance zone and with all the major moving averages rising and scarcity of supplies and China & other demand looking good 2021 could be exciting but sustaining above 12 the key.. we’ll see….Sugar hasn’t been holding rallies and certainly has not shown any interest in taking out major resistance at 16 so far…if it fade…..whilst coffee held support at 100 which we told you before…ran towards 130 but failed tom take out former highs at 135 but did close above support at 125…..if we are in a secular bull market in commodities in 2021 as many large firms suggest then maybe you figure Coffee should hold either 110 or 100 and matriculate higher over 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 and broker/advisor to determine your own suitability. Past performance is not necessarily indicative of future results. Use Risk Capital Only.


Stock Market-Year End Rally or Take the $ & Run-Read On

December 11 2020 Option Professor Opinions & Observations

Greetings!…Well here we are…the whole world is bullish (put call ratio at lowest level since 2000)…valuations are stretched….VIX hit about 20 and turned up….yields are easing off (Fed wants to stem yield rise?)…..IPO’s are going nuts (biggest year ever?)…..and Disney is trading like a tech stock as well as Starbucks (20,000 stores in 10 yrs). Moving averages on the S&P are a distant shore (50 day 3518 200 day 3175) and we broke under short term support at 3690 & 3675….do you think Mitch McConnell is going pass out anything before the Jan Georgia run off? Do you think the virus distribution will go off without a hitch? Do you think the virus is abating?…If you answered no or I don’t think so then unless we have a tremendous year end rush to position for the 2nd half of 2021 and look past some pretty lousy numbers for the next couple months (claims up 853,000)….then bumps in the road are ahead either now or in the January Effect. Now we still believe in the bull market but that feeling of I better load up or I’ll miss out quite often is followed by a sharp temporary dip especially if algos hit the market when other selling might not be present but the mood is hold but no buying. Money ultimately will be flying around the world (EU passes 2.2Trillion budget/relief) so be prepared for big advances but not in a straight line. In 2021 upside targets for S&P are a high as 4500+ and as low as 3350 and with what could hit the fan it may be wise to be prepared for both numbers. Let’s give you more insights & email us at [email protected] with ?????

Stock Market

Lots of action today but some thing remain the same…like AMZN MSFT NFLX NVDA all peaked in Sept…we got a Disney pike and 2 IPO’s that went nuts in Door Dash and AirBNB….both have valuations that are begging for a sell off probably in the not too distant future…to give you an idea SNOW went from about 200 to 300 back to 225 up to 425 and now it at 353….that’ the game if you want to play ….probably the better way i thru the ETF called IPO which was 20 after crash went to 68 and now 65+………PLTR ha done well and so has SFIX…TEVA ha pulled back but ADT could be worth a look & TMHC on valuation. Talk of Fannie & Freddie making a run FMCC & FNMA have stalled as Mnuchin is unclear with his plans. For us we enjoy the value stock with their juicy dividends and upside that still ha not cleared their 52 week highs. Want to know what ETF’s we think could deliver income & growth in 2021….simply email us at [email protected]

Bond Market

Talk is the Fed will put the the brakes on this rise in yields and we saw yields fade going into the end of the week. Of course no stimulus & virus spikes (closed NYC) and vaccine timetables can pour water on exuberance. Cutting to the chase…our view this year on getting income initially in short term corporates VSFUX…then going into Munis VWLUX…the expanding into High Yield VWEAX…Preferreds PFF and finally Emerging Market VWOB has been a very sound plan…want to talk..email The Option Professor

US Dollar-International Markets

The Dollar is hanging on to that 90-92 support zone and while we see the break ABOVE 120 on the Euro as a potential run to 130 (EU passed 2.2 Trillion budget/relief package) we are suspicious and a break UNDER 120 could reset things as positioning is very long Euro short dollar. We said last week the BP was wrestling with 134 and this week it screamed uncle and faded toward 132 as Brexit is still unresolved. Japanese Yen & Canadian Dollar remains on the defensive while the Aussie $$ (which we have been bullish since it broke 70) made new 52 week highs. All our international favorites continue to shine in Asia & Europe & EM (VEU VPL VGK VXU) BUT we caution that a correction either at year end or in Jan could happen as positioning is still very long…..sell calls-collars-put hedges??? Ask us how.

Crude oil/ Natural Gas

We have told you for month Energy stocks were a steal and you get paid big dividends (unless they cut them)…so VDE CVX COP PSX KMI OXY (who had non callable 10 year bond yielding 35% in March now yielding less than 5%) o now we must be ready for some bumps as the trees don’t grow to the sky short term but we maintain 2021 should be the return of higher oil prices. Natural Gas prices ettled around 2.59 and there has been talk that people say Hydrogen may replace some usage…our play is LNG above 50 now at 60.

Gold Silver Copper BitCoin

Our position on Gold & Silver has been clear as a bell…breakouts were 1400-1450 Gold 19-20 Silver….followed by parabolic blow off to 2100 Gold 30 Silver….WAY OVERDONE….would correct closer to 1 year moving averages in the 1700’s Gold 22 area Silver…..they did that and now we nibble using Silver 22 /Gold 1776 as get out points on trading positions and load up on closes above 1900 and 2000 Gold 26-30 Silver….not there yet..China deflates. Copper we told y you got bullish above 2.50 (now 3.50+) had a ratio to Gold that told us it would fly (trade long Copper short Gold big winner)…now w e must see if Virus new gets all markets to give back some if so Copper dips. Bitcoin continues to improve its street cred (Square/Paypal) and now a part of Fidelity will accept Bitcoin in conjunction with cash loans for institutions we read. Our buddy GBTC sold off 20% recently BUT is still up about 400% off the 52 week lows….got questions for us….email us & let’s see our ideas

Soybean Sugar Coffee

All three are in a pause to refresh mode that better get back on their bicycles soon or a more severe correction could be in the cards….Soybeans topped at 12 bucks and now is 11.61…..take out 12 and you may open big upside…Sugar can’t get above 16 now 14+…above 16 we could spike…coffee had been great technically this year…95 ( a steal) to 137 correct to 100-110 support and now at 12o..take out 125-130 and maybe 2021 will be te year of softs & grains….hey ya gotta eat & Starbucks does want 20,000 more stores in the next 10 yrs & the stuff is addicting so who knows???

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 you own suitability. Past performance is not necessarily indicative of futures results. Use Risk Capital Only.


Stock Market-Goldilocks & A Merry Christmas? Read On

December 4 2020 Option Professor Opinions & Observations

Welcome Back!….Everything is working so far this month after a great November…..record records records…from RUT & DJTA to S&P we are zooming to the upside…..everything we told you about ROTATION has come true like Social Index VFTAX —–International Growth VWIGX—Energy VDE—Financials VFH—-Mega Cap Value MGV—-Mid Cap Value VOE—Russell Value VONV—S&P 500 Value VOOV—-Small Cap Value VBR—-Wells Fargo WFC–Copper FCX and now we are looking at the Gold & Silver stocks GDX GDXJ SIL SILJ AUY NEM and so much more. Sure we are overbought on many measures (RSI, A-D Line, VIX, Distance away from moving averages ect) but the seasonality and the combination of vaccine & stimulus exuberance is hard to step in front of now…we told you closes under SP 3600 would signal a pause to refresh & still will but we don’t have that yet and some ay 3800 is our next stop before year end. CAUTION- Unstable Unemployment (700k+claims-only 245k jobs-61% participation-6.7% rate but u-6 suggests really 12% & 20 Million on some form of dole) means stimulus here BEFORE Christmas. HOWEVER…will it be enough/will vaccine distribution go off without a glitch/hard shut downs coming…how long can companies borrow to pay debt..these are potential flies in the proverbial ointment….and with this level of giddy bulls…hedge?? Post Pandemic-The bottom line is contemporary data is very ugly but the market are trading on growth coming….operating leverage (lower costs on decent revenues) will drive prices and re rating (higher valuations) may be the norm on value stocks and credit markets are functioning (liquid-spreads tight) and finally there is no competitors to airlines, theme parks, hotels-destinations-cruise lines and when people go back they will have reduced overheads to a point where their profitability may shock the naysayers….if you or friends have questions for us on sectors or balanced asset allocations in our opinions or what we like and like less simply contact us at [email protected] Thanks!

Stock Market

Big deal this week with CRM and lack ass they try to compete with MSFT but 27 Billion and 24X forward sales may be a bit pricey…we’ll see.. cloud stock got some legs OKTA ZS CRWD SNOW 9=49% for the month with CRM & Buffett as big investors) up between 8-15%. Next week keep an eye on Toll Bros TOL as they announce earnings and our opinion is we could see a surprise…also LEN PHM KBH plus the etf’s could be interesting aftr their dips as 2nd home buyer are jumping and inventories are low while the mortgage rates are at 2.70% area.Pot stocks got a boost fro the House decriminalizing pot but good luck getting that passed by Mitch McConnell (definitely not a pothead:)… trulieve cresco labs green thumb and others may benefit. EV stocks like TSLA Fisker Lordstrom Workhorse NIO and others are front & center with the biotech companies getting interesting again via IBB on the break above 145…watch BIIB was 360 down to 220 now 245..wild ride…PFE getting some legs too. Unusual option activity included TSM in the Dec options and Zynga in the Jan calls….look at covered calls. Watch out for new issues in AIRBNB & DoorDash…one look great post pandemic the other maybe not so much as competition return in dining. If you have any questions on our radar list email [email protected]

Bond Market

Getting active this week…we told you in these updates since the bloww off top and the FED printing that the yield curve would steepen and growth & inflation fears would dominate the conversation…well we are there right now…..also going out on the risk spectrum could pay off in EM VWOB…in High Yield VWEAX…in preferreds PFF and even muni VWLUX…all have behaved well…we also told you value stocks to replace income would be good as they pay good dividends and now we tell you to consider covered calls to create cash flow and you may see a rising principal along with your income unlike Treasuries. The Fed may extend maturities and definitely buy Treasuries as an avalanche of supplies will come with the deficit spending binge….want to ask questions..email [email protected]

US Dollar/International Markets

Big New here is that the entire planet is bearish the Dollar as the Euro break 120 on the upside.. the British Pound wrestles with 134..the Aussie $$ stays above 69-72 support and the Yen fails to surpass 105-107 resistance ..China’s currency has also appreciated to a level where intervention is not off the table…If we hold 90 and the news swings….positioning is very short ..As far as International Markets we have told you for months Europe Asia China are all good places to diversify VEU VPL VXUS KWEB VWO VGK to name a few..we said BABA hit a low at 253 and so far we’re right so if you or friends have any questions email option professor…hear our side of things

Crude Oil/Natural Gas

Oil tock are coming on big time EXACTLY what we told you on these page MONTH ago and we’ve collected great dividends to boot…OPEC seems to be under control o far so we remain constructive in 2021 (45-60+) as jet fuel demand and consumers get going again….VDE VLO CVX COP PSX SLB and much more…..Natural Gass has been all over the place but essentially up since we got bullish sub 2.00 and our baby LNG above 50 has now broke 60 this week..want to know more…email us at [email protected]

Gold Silver Copper BitCoin

We told you that Gold would down UNDER 1800 an oz and then we may be interested and we did EXACTLY that ass we broke 1770 and snapped back nicely….time to nibble on GDX GDXJ SIL SILJ AUY NEM ect….look like it ass the 1-2-3 year moving averages still suggest higher price ahead BUT getting ABOVE 1860 and 1980 or Silver ABOVE 26 & 30 needed to make the big bucks…also no more frightened public & we told you it was a crowded trade at 2100 & 30 bucks ….when crowded it can go the other way BUT Gold is the 3rd biggest asset held by Central Banks BUT we told you they were net SELLERS in Q3 setting up the bargain in Q4 so far….although many other commodities are fading lately. Copper ha been huge for us this year ass we got bullish at 2.50 and we broke 3.50 and our 2 buddies FCX CCO have been rainmakers this year….time to write calls/hedge gains/trim/replace calls??? Bitcoin seems to be running out of steam in the short term (GBTC is our vehicle of choice) ass GBTC has gone from 5 to 24 in the last 52 wks and some say the year after halving (2016?) is big upside but Dalio was just confronting the bulls with comments about the volatility and usability and govt displeasure if it gets too big as potential pitfalls…we’ll see by 2021…. There are many ways we approach these markets-email us to learn more

Soybeans Sugar Coffee

These markets have rolled over to the downside and may be entering a decent correction phase. Certainly 12 beans 6.40 Wheat 16 Sugar and 130-142 Coffee have become insurmountable levels and until taken out maybe the short side is where the money will be made….that’s our gut talking.

REMEMBER There is a substantial risk of loss in short term trading and option trading and it s 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.

Stock Market-Melt Up EOY or Pause to Refresh-Read More

November 27 2020 Option Professor Opinions & Observations

Happy Thanksgiving Everybody!…This Week is an abbreviated weekly update and a real cut to the chase edition in a variety of markets. Seems like the transfer of administrations is happening despite the loud kicking and screaming….it seems the vaccine news is hitting full stride.. economic data of PMI (58) and retail sales (big recovery) are all good stuff and need to be to meet expectations of 30% jumps in earnings. Covid cases and resulting hospitalizations are up and if the market is hit by a shock due to holiday travel & gatherings…..with VIX in the low 20’s and RSI at nosebleed levels.. a pause of some degree is not off the table. We have been in the value sector big time for a number of months and the payoff in November in backs energy industrials ect has been remarkable. The SP monthly highs on the futures are still intact @ about 3670 so adding aggressively without that could be problematic and ruin nice positions already on the books. Should the S&P move under 3600 and then 3540-3510….a pause is in the works. We realize seasonally this is a bullish time & cash abounds..so don’t be a hero. Want to ask about options as a hedge tactic? [email protected]

Stock Market

As you know November has most stocks zooming to the upside. There are possible deals and IPO’s hitting before yearend…on our watch list in the merger world is DBX FANG WLH XPO ALXN DPZ RNG DBX SFM AAN AUY VIAC among many others. In the lithium area we are focused on LIAF &ALB. Many of the sectors that have had big runs this month (which we told you about long ago like VDE -Energy, VFH KRE-Banks & Regionals, VAW-Materials, VIS-Industrials, VNQ-Real Estate…and all the Value plays like MGV VOOV VONV VOE VBR and many more could be ripe for some give back if the focus reverts back to Covid cases-Unemployment (778K Claims)-Stimulus fights-unknown vaccine availability—-complacency & euphoria-VIX near 20 could mean reversion before this consensus opinion-EOY Rally. We are many stocks-ETF’s we like-interested? [email protected]

Bond Market

Spreads are tight in both Investment Grade and High Yield (400 BP) and TLT remains above 154-155…..should we break that then high yields could come calling…maybe 1.25-1.5% on the 10yr. If not…a market correction in stocks could rally prices further. Gong out on the risk spectrum has paid off nicely in recent months including VWOB with a 4+% distribution rate-Emerging Market….PFF yields over 5%+ in preferreds….VWEAX approaching 5% or so in the High Yield sector and FFRHX in the Floating Rate High Income genre. Otherwise…short term corporates…limited & intermediate duration munis. We are following various fixed income-email [email protected]

US Dollar/International Stock Markets

Lots to talk about here as the Dollar is on the ledge and international stocks are running with some slow pokes showing come from behind potential. Our choice on Emerging Markets has been VWO & VWIGX which have both been great to us and those who have been reading our updates…..but also Japan VPL and VEU VXUS but now we are looking toward the Down & Out in Beverly Hills crowd…namely Eastern Europe & Latin America…there you can find Russsia RBL-ERUS..Poland EPOL Turkey TUR & ESR diversified while in Latin America Mexico is the dog with the least amount of fleas (best comparable performance) EWW but one might look toward Brazil & Brazil small caps EWZ EWZS…Columbis GXG…Diversified ILF to see what discounted values make sense…with these you swim with the sharks…so try to follow moving averages and keep them on short leash-caveat emptor. The US Dollar is into our base of 90-92 and the coyotes are out in force on this wounded bird…the next few weeks may either see a resurgence in $$$ combined with a stock market correction or the floor drop out-stay tuned. Have questions on the Dollar-Global [email protected]

Crude Oil-Natural Gas

We brought to your attention months ago that the oil prices would not be going back into the 20’s and Chevron CVX ect were a steal with big yields and discounted prices. Lately we have really been rewarded for that smart prophecy. We believe the recovery next year could see Crude prices go to 45-60 and prices of energy shares continue their reversion to the mean. In the short run OPEC has talks this weekend and storage is bulging with Covid cases jumping so be aware the trends look good lately but pull backs are part of the game…..also some firms are borrowing money to pay the dividends.. Natural Gass went in the tak lasst week and this week treaded water…our baby LNG has given a 20+% pop this month may dip to 55…but that’s OK… Want our Focus list of ETF’s-Shares?? [email protected]

Gold Silver Copper BitCoin

We warned you about a reversion to the mean for Gold back into the 1700’s and Silver into the 18-22 buy zone and those who trimmed or replaced positions or collared their positions are happy they did…GDX GDXJ SIL SILJ and many more are getting a lot more interesting to us….but no need to be the first guy into the pool…Copper has divorced itself from the precious metals…we told you recently that the Copper-Gold Ratio was exploding in Copper’s favor so LONG Copper Short Gold was genius in the last few months. Bitcoin looks like it had a blow off top this week as GBTC hit 24 only to close in the 18’s down almost 10% Friday…..maybe too far too fast but long term a bull…How can You Protect Gains? [email protected]

Soybeans Sugar Coffee Cocoa

Lots happening here and has been for awhile if you read us and updates regularly….Beans popped to the upper band we told you about month ago (10-12) this week as demand has been great & China’s been a monster…we told you Sugar was a buy at 12.30 when the 50-200 day MA’s crossed and we rallied toward resistance of 16 only to fail….fear not.. if we break 16 for a good cause…the future looks very bright…..we told you earlier this year that coffee was a steal sub 100 and we ran to 137…then we recently told you support is 100-110 and if validated the next move is north…this week we hit about 125…and we told you Hershey’s orders caused a squeeze in Cocoa which cause the biggest jump in many years…this week it lost steam….Do you have questions on these?…email [email protected]

Happy Holidays Everybody & God Bless!

REMEMBER There is a substantial risk in short term trading and option trading and it is not right for everyone. Consult your brokerage firm and broker/advisor to determine your own suitability. Past performance is not necessarily indicative of future results. Use Risk Capital Only.