Stocks got hit nicely this week and we did very well in our bond positions. So where do we profit next? [Read more…]
[Options Premium] Stop Levels Getting Hit
The current market calamity is certainly not sparing many of our long or delta neutral positions. The good news for us is the majority of them have defined risk.
At the open this morning, many of our positions traded through our stop-out levels. But an important point to remember here is that we’re looking to see a CLOSE below our stop levels. We’re don’t jump on an exit the second a level is broken intraday.
There is a lot of trading left in today’s session. This is not the time to be dumping defined-risk positions into the hole. [Read more…]
US Remains The Best House In The Neighborhood
From the desk of Steve Strazza @Sstrazza
Thank you to everyone who responded to this week’s mystery chart.
We had mostly “do nothing” responses again this week but buyers or potential buyers came in close second, many of which said they were waiting for confirmation of the momentum divergence and failed breakdown before taking action.
We only had a few sellers, which is interesting because that’s the camp we’d fall into as long as prices remain below support.
One of the main reasons for our bearish bias towards this chart is the fact that it’s been in a long-term downtrend and consolidations tend to resolve themselves in the direction of the underlying trend.
[Unlocked] Sugar Comes Off Its Short-Term High
From the desk of Tom Bruni @BruniCharting
Sunday we outlined a trade in Cocoa that’s working well so far, so today we wanted to outline a similar situation developing in Sugar.
Let’s take a look at what’s happening.
[Table of The Week] A Look at Gold Around the Globe
From the desk of Steve Strazza @Sstrazza
In last week’s Chart of the Week, we wrote about our bullish outlook on Gold and followed it up with a deep dive on the entire Precious Metals space, which included a number of trade ideas to express our thesis. This week, we have a table that helps provide a different perspective on its recent price action but arrives at the same bullish conclusion.
The shiny metal has gotten a lot of attention lately as it currently sits around its highest level in seven years.
After about a 9% surge off of this month’s lows, we’d expect prices to consolidate in the near-term. But after that, we’re betting on new all-time highs for Gold in the coming quarters as long as prices are above last year’s highs near 1,560. Here’s how we see it.
Uptrends In Stocks Are Falling Apart
We’ve been very clear about how we wanted to avoid owning stocks this month. Fortunately, bonds have been the beneficiaries of the relentless selling in these stocks. Nothing has changed for the positive. But it’s actually some former leaders completely falling apart that now has my attention.
Remember when Industrials broke out to new all-time highs? We said that as long as that was the case, how bad could things be? Well, Industrials are no longer above those former highs and actually just broke down to new 10-year relative lows. This is behavior consistent with an environment where we want to be selling stocks, not buying them: [Read more…]
[Options Premium] Options Sellers Live For This
Careful what you wish for?
Options premium sellers profess a deep and undying love for elevated volatility. But when they get it, are they willing to act? Sometimes when you’re in it — like right now — it can feel very scary. The urge to sit it out may overtake you. I get it. Been there.
For those of us who plow ahead and like to take advantage of opportunities when statistical edges are backing them up, this next trade is for us. [Read more…]
All Star Interviews Season 3, Episode 18: Larry McDonald, Bear Traps Report & NY Times Best Selling Author
Larry McDonald is the guy I turn to when I want to talk about the Bond Market. He always has something insightful about what’s happening that I’m probably not seeing. We’ve become friends over the years but I originally got to know who Larry was by reading his book, Colossal Failure of Common Sense. This is a book about the collapse of Lehman Brothers being told by a bond trader inside the firm. I encourage you to pick it up and give it a read. It will give you good insight as to what exactly was taking place at the time. In this podcast Larry tells us a good story about the day his team had the most profitable day in the history of the bond desk at Lehman and Dick Fuld didn’t even bother to come down and say hi.
The market today is different than it was in 2019. What’s going on in the bond market is playing a huge role. I couldn’t think of a better time that the present to bring in my friend Larry McDonald to discuss what we’re seeing out there in the markets. This is always a lot of fun talking to one of my favorites!
[Read more…]
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