This is the video recording of the January 2019 Conference Call for Members of All Star Options [Read more…]
How Low Can US Stocks Go?
Since early October, a big question for us has been, “How low can US Stocks go? Obviously no one knew then, and no one knows now, so all we did know was that we did not want to own stocks. We wanted to be sellers, not buyers. Go to cash and ask questions later, type of mentality.
We’ve looked at declines in Crude Oil and widening credit spreads as a gauge for what to expect out of stocks. We’ve been monitoring market breadth for evidence of confirmations of declining indexes or whether they’re diverging from them. These internals studies and intermarket analysis techniques are great and incredibly helpful in any environment. But today I want to focus on specific prices levels for the two most important indexes in America. [Read more…]
Attention: This Is Not A Drill
I spent the New Year in Lake Tahoe, which is one of my favorite and most beautiful places in the world. Heading up to the lake with family and friends for a few days (and leaving my laptop at home) really helps clear my head and let’s me focus on the environment we’re currently living in. I see again and again people trying to compare today’s market to “the average” of a dozen or so bear markets in the past. It’s painful to watch.
It’s hard to remember a time where I saw this much irresponsibility among investors, especially the pros who should know better. These “asset managers” are so busy dealing with investors, compliance, operations, marketing, regulations and whatever else they’re busy doing, that they’ve completely underestimated the amount of risk in the stock market. It’s like they forgot that risk is a real thing.
And what are they doing to justify their actions, or lack thereof? They’re relying on a tiny sample size of prior market declines to “wait and see” what happens. They think they’re “Portfolio Managers”, but they should be “Risk Managers”. There’s a huge difference. [Read more…]
[Premium] Some Perspective On 2018’s Volatility
From the desk of Tom Bruni @BruniCharting
The media has been making quite the ruckus about 2018 and the “historic” volatility that the US Stock Market experienced, particularly in the fourth quarter. In this post I want to look at a few simple stats that help to put this past year’s performance into its proper historical context, so that we can see whether or not it truly was a crazy year for stocks.
[Options Premium] Hold Your Fire
Just as the final week of the year — the days between Christmas and New Year’s Day — are generally to be avoided by anyone looking to put new options trades on, so too are the first couple trading days of any new year. Especially this one. It was highly unlikely you were going to make your year by trading during the holidays, and similarly, there’s no reason to believe that any trades you nail on the first trading days of 2019 will be memorable this time next year.
As I type this at 12:45am ET, overnight S&P Futures have already traded as high as +34 and as low as -25 from Monday’s close. And I expect further indecisiveness to be pervasive during the first two full trading days in 2019. Sure, the nimblest of day traders likely will have a lot of action this week to make it worth their while, but those of us looking to put on options spreads with several weeks or months until expiration will best be served letting some of the nuttiness of the first 48 hours shake out. As such, we’ll be sitting on our hands until the end of the week, waiting until Friday to put on our first new position of 2019 (stay tuned!).
Meanwhile, we do have open positions with January expirations that will warrant our attention this week. Here is a quick breakdown of current positions with January expirations that we’re still in (haven’t hit our profit targets): [Read more…]
[Options Premium] How to Use All Star Options
Happy New Year everyone! We’re happy you’re here. 2018 was a great first year for All Star Options. We pulled some profits out the market in both directions, we had some fun, and its been an incredibly rewarding challenge for me personally to share my experience with all of you and teach you some of the tricks of the trade I’ve learned in my 20 years tackling the markets.
We always welcome questions from the community about existing trades, questions about position management, and questions about our insight into various scenarios and trade ideas. And as such, I thought I’d take some time today, as we head into the new year, to lay out the way we think All Star Options subscribers can get the most out of their experience here and address some common requests we receive. [Read more…]
Some Notes From A Sunday Of Charting
From the desk of Tom Bruni @BruniCharting
This is going to be a quick post, but I wanted to share what I thought were some short-term positives from my review of our coverage universe.
How Much More Do Rates Have To Fall?
It’s been a great couple of months for Bond bulls. As unprepared investors worry about their portfolios and financial media outlets irresponsibly call this market “crazy”, we’ve been happy to watch the destruction of stocks and new flow of money into safer, fixed income assets. Interest rates have gotten slammed with stocks and bonds ripped. One for the good guys!
So the question now becomes, how low can rates go? [Read more…]
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