Option Professor-Banks Beat-Metals & Oil Up-China’s Run at US $$-Fed What’s Next? Read It.

April 15th 2023 Option Professor OPINIONS & Observations

We got got bank earning and no surprise with us. When you pay depositors no interest and take their deposits and buy Treasuries yielding almost 5%…duh…you make money. Regional banks are the ones to watch with their exposure to Commercial Real Estate (CRE’s big ReFi in next 12-24 months at LOWER LTV)-Mobile Deposit Base-Need to REDUCE lending to small business. They’ve been HIT but more to come??

The FEARS on EARNINGS recession probably PREMATURE? We got 3.5% unemployment and reatil sales mostly down on lower gasoline prices which have reversed. Spring is here so out and about we go (spending money with our rebound in stocks and pay raises). We question this FED is DEAD mantra we hear everywhere as the 10 yr Treasury FAILED to sustain UNDER 3.30%.. Big Cuts?? Only if we fall off cliff.

Inflation/Owners Equivalent Rent?? Hard fever to break. EXAMPLE My buddy sells his house in Atlanta and moves to San Diego area to rent. Not only are rents high but the ABNB people are still HIKING. Also: NYC rents hit a RECORD. Mortgage applications are RISING and inventories on houses low (noboy’s giving up their 3% mortgages!). We see some food prices drop (egg prices have cracked:):) We see prices on our items like this e.g.–box of cereal was was $4 went up toward $8 now at $6.50. Inflation was 9% probably goes back to 4.5%-5% and then ahs trouble going down from there. RATES higher for longer- Fed says so

China is trying to become the new world leader and getting everybody to do trade in your currency is a good first step. They set up a crude oil contract in Hong Kong/Shanghai in 2018. They want settlement in YUAN which nobody trusts so they create a conversion into GOLD feature to soothe nerves thus they have been buying Gold and mining it like crazy to create the reserves necessary. HOWEVER before you put the cart ahead of the horse….88% of all global trade settled in Dollars &% in Yuan…lead will be cut?? Also; must recall China had TANKS in the streets enforcing a leave your money in bank-UNABLE to make withdrawals. This may EXPLAIN why any run on any bank is met with SWIFT ACTION by our Central Bank.

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REMEMBER All investing involves risk and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Information an opinions are provided for informational purposes only It is NOT advice.

Option Professor-Will the Bulls Get Caught Leaning-Tech-Oil-Gold-China-Euro-Crypto?

April 8 2023 Option Professor Opinions & Observations

Greetings! We wanted to wish everyone a joyous religious season.

We got the Jobs Report was solid at 236K INCREASE and WAGES rose .3% after gaining .2% the prior month. We get CPI (Consumer Price Index) on April 12 and Retail Sales on Friday the 14TH. BOTH of these numbers combined with the Jobs number will have the Fed either on their toes or heels. We all knew ISM manufacturing was in contraction but the ISM services dipping toward 50 was an eye opener but needs to be confirmed next month. With jobs plentiful (1.7 to 1 ratio still ) and Wages still rising and change of seasons-spring/summer ahead; it will be interesting if the supposed CREDIT CRUMBLE from the banks problems will halt the consumer. EARNINGS start with the banks. All eyes will be focused on if the big banks (BAC JPM C GS WFC) will have benefitted from huge deposits and if REGIONAL banks are getting hit by an exodus….maybe that will be a Q2 thing but GUIDANCE off Q1 numbers will be key. Another factor is VALUATIONS have gotten a bit rich again so we will see if EARNINGS support this repricing or if it’s BUY the rumor SELL the fact. There will be no rest for the wicked in 2023. Possible break EITHER way.

OK Now lets talk about the headline to this update. Will the BULLS get caught LEANING or MORE ahead. BIG RUNS-Tech-Bonds-Oil-Gold-Crypto/Euro/BP-China LINKED in part to Fed EASE? Do We Rely on That?

Here’s some ZONES of joy and fear for some of the markets based on OUR Technical Work/Our Opinion.

On the S&P 500 Resistance 4205-4350 Support 4045-3980-3955. QQQ Resistance 325-330 Support 308-300-295. IWM Resistance 175-181-190. Crude Oil Resistance 81-85-90 Support 78-74-66. Gold Resistance $2050-$2100 Support $1980-$1900-$1800. China FXI Resistance 34-38 Support 28-27. GBTC & ETHE-Call.

There are MANY stocks we follow in these sectors. MANY option tactics-Collars- Call Write-Replacement

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REMEMBER All investing involves a risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions are for informational purpose only It is not advice.

Option Professor-Stocks-Are You OVERPAYING For Info? On a LEDGE-Stocks-Bonds-Oil- Gold

March 25 2023 Option Professor Opinions & Observations

While everyone keeps chasing all these trading ideas; the big flow of capital has been in Money Market Accounts ($5 Trillion+ & +$300 Billion recently). Why Not? Treasury Bills & CD’s have been have been assuring investors of 5%+ (in some cases). A fantastic rally we spoke of in the Presidential Cycle (Oct-April) may be nearing an end depending on how things break. If so; many markets may see VOL spike.

The Goldman Sachs Commodity Index (which we told you topped out last year at 850 failing to take out the 2008 highs) is at 549 hitting KEY SUPPORT in the 530-500 zone. It is UNDER our M/A’s on the 5 year chart. Should we sustain UNDER GSCI at 500 say bye bye to OIL GOLD GRAINS. We will see if the OIL MARKET can start that big REVERSION rally as we go into spring & summer DEMAND season. Of course; we will be all over it if it does but e have avoided the big DECLINE in the energy sector recently. GASOLINE inventories have been declining and the LOWS at 2.00 may be solid with better weather ahead.

The 10 year Treasury broke UNDER the 3.40% area and could hit an air pocket sending it to 3%-2.50% if we get an unravelling of these regional banks who have lost TONS of deposits. Th Fed may be dancing in the street in one respect….this could cause BIG problems for small business and instigate job cuts. This in turn will hurt demand and get inflation down quickly. BUT since when is bi jumps in unemployment and a slowdown in business activity good for earnings? You’re Right-NEVER! The the jobless rate at 3.6% and Fed yearend target at 4.5%….looks like heads will roll as collateral damage. We told you M2 money supply had TANKED into negative area this year after UP 25%. The Fed Balance Sheet (which they were supposed to be reducing) has made little progress and now ROSE by $400 Billion recently. If M2 spikes- Assets Up.

We’ve had 46 global rate hikes this year and money markets have surged to the biggest weekly gain since 2020. We got inflows into Treasuries at the fastest clip EVER. Outflows from IG Credit is most since 10/22. HISTORICALLY; the last 2 times (2008-2020) were turning points for market lows HOWEVER we did not have the Inflation numbers as we do now. The markets work off GREED & FEAR. Unfortunately; the market GREED is for Interest Rate Cuts and there is NO FEAR of recession as VALUATIONS remain high. Powell said no rate cuts this year. The Fed is supposed to be hiking by 25 basis points. IF they get thrown off course either way (meaning no hike-cuts or 50 BP hike); it’s probably a reason NOT good for stocks. The markets are OVER 100 basis point ahead of the Fed for Fed Funds cuts. For stocks; that’s scary stuff

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REMEMBER All investing involves a risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Opinions and information is provided for informational purposes only. It is NOT advice.

Option Professor- Markets on the Ledge Now! Which Way Will They Break? Here’s Our Take.

March 18 2023 Option Professor Opinions & Observations

This last week we got a lot of information to process. After 40 years of doing this; we have seen our fair share of shocks. From the banking system to inflation to the war to Dictator Governments aligning; OUCH

There are three areas that lack transparency and all 3 have the potential to get very ugly OR be contained. The first we know is Venture Capitalism. The second is general Private Equity. #3 is Commercial Real Estate

Our opinion is the shock of Silicon Valley bank ACTUALLY served many masters. First all those VC heavy hitters who made scores on Roku and all the rest have gotten whacked with the tanking in many of their deals. They want to get their money out but know SVB doesn’t have the LIQUIDITY. Who does? Well; if a “run on the bank” story gets out; the stock collapses and we get the NEWS stirring PANIC, The Fed & other banks will give us the LIQUIDITY to get our money back….sweet deal for them. The second on that potentially benefits is the Federal Reserve who DESPERATELY wants inflation to go & as well as DEMAND. The result last week was a MAD DASH to money market as historically HITS GDP ergo growth/earnings.

Odds for hard landing has increased for the next 6 months; maybe gets INFLATION down & LABOR down.

OUR VIEW that Growth over Value since December continues to be a brilliant call. Gold held $1810 & took out $1960. The 10 yr Treasury we said would decline to 3.4% area. S&P would stop at 4200 & 4080 Crude Oil FAILED to get above the 83 area and has tanked to 65 area which is a very key support zone

NOW WHAT? Everything is on a ledge. CONTACT US. Go to optionprofessor.com. Submit your contact information. We will EXPLAIN what we see next PLUS Share Our Indicators for Stocks-Rates- Oil Gold Ect. TIRED of FEES-Monthly/Yearly with Chat Rooms-Newsletters-Courses? With Us NO Annual- Monthly fees

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REMEMBER All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Opinions and information is provided for informational purposes only. It is NOT advice.

Option Professor-Stocks-Rates-Energy-Metals? Have You Read Our Opinions? You’ve Missed Out.

February 26 2023 Option Professor Opinions & Observations

For a number of years we have tried to shore with you our views on the markets. In 2020; we spoke of a LOW in interest rates ($17 billion in NEGATIVE yielding debt) that could and would not last coupled with a MAJOR low in Energy and other markets. In 2021; we spoke of a OVERBOUGHT stock market that would REVERT to the mean especially after the Fed commenced their hiking campaign which goes on to this day. We’ve been in these markets for 40 yrs so this is not our first rodeo and we have no axe to bear. In 2022 we spoke of then the oil prices trying 2X to break the 2008 high and FAILED losing from 130 to 70. We cited about 4 rallies in stocks that were bound to fail at resistance points basis OUR declining M/A’s. In late 2022; we cited the Presidential cycle ( Oct of 2nd yr to April 3rd year) that has a tremendous history

We informed readers of the BUSINESS CYCLE of Inflation the Fed Hikes (ABOVE CPI) and SLOWDOWN. Talking heads keep speaking of recession which will not come until Fed Funds are ABOVE CPI and the jobs markets starts shedding jobs. We are still in the midst of PHASE 2; be patient PHASE 3 will be coming later

We spoke to investors who wanted solid return and a stable principal and spoke of rolling SHORT TERM T-Bills to go where the Fed wants you (out of spec and into safety) and cool it “only live once” spending. In 2023; we spoke of OIL having to clear 83-92 to get on the horse and Gold +1975 & Silver +25 as well. We recently spoke of RESISTANCE at S&P 4208 (our indicators) which so far has been the “Bounce” top. WE have S&P Resistance at 4080-4208 and support at 3900-3875. Inflation and Spending are too strong

How long will PHASE 2 (Fed hiking last)? What are potential DOWNSIDE targets when the PHASE 3 starts? Is this CHATGPT short term hype? Will Global markets stay firm? What EARNINGS/P-E might we see in’23? Are stocks totally MISPRICED & are bonds about to FALL off a cliff or would locking in yields be smart?

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REMEMBER All investing involves a risk of loss and it is NOT right for everyone. CIONSULT YOUR BROKERAGE FIRM to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Information and opinions are provided for informational purposes only It is NOT advice

Option Professor-Stocks Peak? SPX 4208 QQQ 314 IWM 200-Rates Up VIX Up-Oil? Gold? Read It

Feb 20 2023 Option Professor Opinions & Observations

What a difference a week can make. We got news on CPI & PPI and retail sales on top of a hot jobs number. It all adds up to DEMAND is stronger that expected and INFLATION is way stickier than expected.

The Fed has been hiking for almost a year to slow things down and bring inflation down and their brakes are hardly doing the job. This likely leads to HIKES and a collision course with RISING savings/inventories.

Of course the people who plowed into BONDS in the last 4 months cite seasonal factors to sleep at night. REMEMBER; rates could FALL dramatically if we see period of SECULAR STAGNATION-but no evidence yet.

The TRUTH is the 10 yr yield is still way UNDER the inflation rate so unless we break to 3%-4% inflation the likelihood yields will be higher pretty good (3.35% is already UP 50 BP’s). How high is UNKNOWN.

We can talk all we want but the TRUTH is the business cycle kind of goes like this: First we get INFLATION (already got it), Second; we get RATE HIKES (still getting them) THIRD; we get an economic SLOWDOWN (which we haven’t gotten yet due to strong labor market, $9 Trillion Dollar Balance Sheet, and Lag Time). The fact that the popularity of NO LANDING is emerging tells us that June to October may be VOLATILE.

We could still get a rally in the S&P toward 4310 area (61.8% retrace of 4810-3491)-needs SPX 4208 break Longer term; it would be silly not to respect the potential of an economic slowdown/earnings combined with a LOWER P/E ratio than the one currently expressed in prices. SPX UNDER 4025-3950 confirms peak.

There is a LOT that will be going on soon and the questions abound. Will STOCKS break ABOVE recent tops? Will BONDS go into the tank again causing more pain for fixed income ($63 trillion of corporate debt comes due between 2023-2025 about 150-200 billion a month)? Will OIL hold the lows (65-72) and see the big Spring-Summer rally? DOLLAR drop over? Will GOLD hold $1800 & take out $1975 to $3K? Finally; will the stampede into Europe, EM, China, High Valuation stocks fizzle out? Yeah; a lot to consider.

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REMEMBER All investing involves the risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Opinions and information are provided for informational purposes only. It is NOT advice

Option Professor- Stocks-3 Words Tossed About-Hikes-Euphoria & Froth-True or False? Read More

February 12 2023

IMPORTANT ANNOUNCEMENT! The Option Professor Webinar TODAY! Use the link below to Join Us! We will explain Our BEST Option Strategies/ Our BEST Stocks by Sector/ Ideas for Oil-Gas Stocks-Gold

Congrats to KC & Respect for Philly for a great competitive Super Bowl!

OK We told readers & customers that SPX 4208 was RESISTANCE based on a moving average on our 20 yr chart AND a RSI divergence suggesting EXHAUSTION & that alone was worth hearing what we say. To state the obvious; TUESDAY we get the CPI and if it comes it soft then we could get right back on the horse. For us that means SPX ABOVE 4115-4120 then 4180-4208. Will that happen? Are you caught long?

Some problems that the stock market faces right now are Hikes & Euphoria & Froth….pause or rally killer?

ROLLOVER has occurred in may areas that were humming including the Dollar, Bond Market & Transports The key starts with YIELDS which we told you REJECTED the 3.35% level on 10 yr & NOW at about 3.75%! The next key is EUPHORIA which best categorizes a OCT-APRIL Presidential Cycle that did not disappoint. Money was stampeding into weaker dollar, lower yields/Fed cuts and soft landing scenarios. China’s reopen and European hope saw money pour in. The next key is FROTH which is when the rally is led by the worst beat up stocks as leaders (the IWM rally had NON profitable companies leading the pace).

EARNINGS have been a mixed bag and some question the 2.30 earnings for SPX and the 18+P/E ratio. There are many who believe that earnings will drop as margins are squeezed typical for inflationary times. Our 120 month moving average is in around SPX 3000/ if we start closing UNDER SPX 3950-rip chord

THIS WEEK watch for Tues CPI, Wed Retail Sales, Industrial Production, Business Inventories with Thurs giving us PPI and Housing Starts & Permits. Friday we get LEI (leading economic indicators)-All Up???

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REMEMBER All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your risk tolerance and suitability. Past performance is not indicative of future results. Information & opinions provided for informational purposes only. It is NOT advice.

Option Professor-Can the Fed Get to 2% Inflation with China Reopen & Our Labor Market? Read It.

February 4 2023 Option Professor Opinions & Observations

What a week! We had a Fed Hike, The Big 3 (AAPL AMZN GOOGL) report disappointing earnings, and an employment report so shocking that you could drive a truck through the reality versus the estimates:):)

First; the Fed hiked 25 basis points which was the smallest jump in recent meetings. Powell read from a script that said that they are committed to fighting inflation, ongoing rate increases, job far from done. Bravo! He then went off script and there was the rub. To us; he sounded like a broker (his former job) trying to get sideline money into the market with his comments about disinflation, potential rate cuts. The one comment that was a jaw dropper was no ease in financial conditions since the December meeting. Time to check his drink. We have seen stocks explode, yields & the Dollar tank & full employment (3.4%)

This is a HARD ECONOMY TO CALL at this point. Why? The LABOR market had a JOLTS report showing a ratio of 1.9 to 1 avails to seekers. We had 500,000+ new jobs created AND Nov & December revised UP! Wages are still rising. Manufacturing jobs on the rise and March/April seasonally strong. ISM SERVICES numbers JUMP up to 55+ from 49! Business activity was 60+ and New Orders UP 15%! Consumer spending is 70% of economic growth so DEMAND could surprise.. RISK is that one day companies wake up and discover business has slowed and they don’t need so many people and cuts happen fast & furious

The next wild card is the China reopen which could have a boost on CONSUMPTION which could turn inflationary. Next Fri.; China announces CPI & PPI which could shock-delivered in that balloon over MT:) Seriously; the demand for energy, industrial metals, services could soar especially with Lunar Holiday.

SHORT COVERING & FOMO has accounted for much of the rally we have seen. For those who get Our QUICK ALERT; we spoke of SPX 4208 resistance and we told others of a RSI DIVERGENCE which led to a great short term turn. If we break SPX 4208; the next levels we see is SPX 4310 to 4400. A move of 20% off the Oct lows takes us to the highs we saw this week and a 25% move is in the SPX 4350-4400 range. The VIX has been LOW & STABLE which we told you attracts big money. If VIX is ABOVE 21-25/tune changes?

IMPORTANT! The Presidential Cycle we mentioned can go until April so we respect that fact. HOWEVER; there have been large gains in the last 90 days and we know ways of PROTECTING those values and more.

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REMEMBER All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Information and opinions provided are for informational purposes only It is NOT advice.

Option Professor-Stock Market Run-Does Fed Stop the Presidential Cycle This Week? Read It!

January 29 2023 Option Professor Opinions & Observations

For those of you who missed the QUICK ALERT; there is a Presidential cycle that starts in October of the 2nd year of the presidency and goes to April of the 3rd year (we’re in that right now). During this cycle the market is UP over the October price about every time we looked. Impressive if not belated. We have seen a literal stampede into China, Europe, Pacific Rim/about everything that benefits from a falling dollar.

We’ve seen yields come down, talk of Fed being done, Dollar top/China open , rate cuts sooner than later. WOW! We’re getting drops of 1% in retail sales, PCE still with a 5% handle/CPI with a 6% handle & 3.5% jobless rate (record). The jobs coming out of tech are from the gross over hiring & cap ex cutbacks by cos.

THIS WEEK; we will may get gasoline or water thrown on the fire (Employment Cost Index-Big Tech Earnings-Fed hike & statement, jobs report ect.). No doubt; spending has softened by consumers and corps. and PMI’s and LEI’s are pointing down. How else did you think the inflation numbers could come down? The Fed will stay flexible as this thing could brake EITHER way into a real downturn or people could go back to spending as the Fed is characterized as dovish. Our view is that Fed Funds must get ABOVE the Inflation rate as well as real interest rates (nominal rate minus inflation rate) before Fed stops.

Before the year is out (and there is a lot of year left); we see the word LIQUIDITY & Operating leverage being front and center as QT & lag effects of Fed hikes hit home. Revenue declines & Labor costs (WMT jumped minimum) may pinch operating margins. Do we make it all the way to SPX 4300 area (61.8% retrace of 4810-3491)??? Mob psychology is in full bloom & all those financial wizards have got “some of their money back” which keeps the game going. If EARNINGS don’t get hit by Q2-3; the soft landing wins.

Technical support SPX 4045-3940-3875/QQQ 285-275/IWM 185-180/10 yr Treasury 3.48%-3.37% Let’s see

We’re getting a rally out of the darkness but remember a lot is being discounted and positioning more up At some point selling covered calls, collars, trimming, and marries puts make be appropriate. We Can Help you understand what that means. Does the Fed want monetary conditions to ease? We’ll see soon.

GO to option professor.com and get our 3 PDF Reports on Protecting Portfolios, Our Best Ideas, 1 on 1 ONLINE meeting to REVIEW your ideas and strategies & we share much of our knowledge, views opinions

We’ve told readers of the turns in metals, oil, SPX, Food, EM, China, Europe, The Dollar. How much more?

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REMEMBER All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions are provided for informational purposes only It is NOT advice.

Option Professor-Stocks-The Big Question Now- Should I Stay or Should I Go? Must Read This!

January 21 2023 Option Professor Opinions & Observations

The BULL Story

As the stock market gyrates between SPX 4035 and 3885; many investors are wondering whether we have the all clear sign and last years 2022 LOWS (20 & 40 yr cycles) at SPX 3491 was the low and the VIX being subdued between 18-25 is telling us VOLATILITY is dead so bring in the big buyers; it’s safe! This has certainly been the net case since the October Lows and on steroids GLOBALLY in the month of January ’23 Money flows into stocks are very good to start the year (January Effect) so sellers are far & few between setting the stage for Algos to press the OFFER side. China’s reopen and stimulus to return growth will help Asia & Europe as mobilizing that consumption/demand is considerable. If China growth does return to 6%+; one would assume that commodities & multinationals would rise substantially….discounted a bit? USA consumers seem able to handle rates in this area. This means SLOWDOWN in Growth-No Recession. TECHNICALLY. Friday was Options Expiration Day. DJTA ABOVE 50 & 200 Day MA. SPX ABOVE 4035-Up++

The BEAR Story

China may a number of short term challenges. The Lunar New Year Travel (back to 2019 levels) brings with it COVID. The UNEMPLOYED 18-25 yr old youth remain. Consumers slow to trust property. Trade Demand The Fed will be slowing the pace of rates (Duh…they went from ZERO to 4.25%… not going to 9% right). They know that getting the Fed Funds Rate ABOVE the inflation rate & keeping it there was the 80’s tonic. LABOR markets are still strong and wages have slowed but still rising (margins). There is some Easy Math here Inflation + Rate Hikes = Slower Growth. Should slower growth=lower earnings; the P/E ratios are key What will EARNINGS be in 2023? What will the multiple be? 2.10 X 17 =3570 or 1.80 X 16 =2880….get it? Let’s be honest. The YIELDS & THE DOLLAR have eased substantially. The US & Global Markets were VERY Oversold and have had a REVERSION rally. The 3 MOST CROWDED TRADES are Bonds, The Dollar & now EM/Asia/Europe. We imagine The Fed will REMIND us in 7 Trading days of their RESTRICTIVE POLICY. TECHNICALLY. SPX closes UNDER 3875 & 3800 may confirm BUT +4050 could lead to SPX 4200-4400.

Should I Stay or Should I Go? Well; we see a “Clash” coming between SPX 4035 & 3875. Go with the flow:)


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REMEMBER All investing involves risk an it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Information & opinions provided are for informational purposes only. It is NOT advice.