Consumer Staples have been going up. Stocks like Costco, McCormick and Clorox have been ripping to new all-time highs. The Sysco in the Staples sector has even embarrassed Cisco in Technology. It’s been a nice run. The question here, however, is whether or not the strength in Staples is evidence of a flight to safety and whether we should be concerned about the overall market? This is a very important question and I want to walk you through my thought process. [Read more…]
Book Profits Before You Burn Your Shoes
Fine. I get it. Businesses making political stances — whether you agree with the stance or not — rubs you the wrong way. And sure, aligning with a professional athlete at the center of a hot-button controversy only makes it more cringe-worthy for you. You’re entitled to that opinion and I support your right to voice your displeasure. But for the love of all that is sacred in the world of trading, do.not.let.your.politics.or.emotions.get.in.the.way.of.making.profitable.economic.decisions.
Just don’t do it. [Read more…]
[Premium] Some Standouts From A Weekend of Charting
I think the overwhelming theme here is that there are a lot more stocks I want to buy than stocks I want to sell. Why do we need to over complicate this?
Another thing I’m seeing is the January highs as a reference point. The question is whether or not the market will be able to surpass that former resistance, proving there is more demand than supply there, or if it’s the other way around? Are there, in fact, more sellers up here than buyers? We can see this key January pivot point in most of the major indexes: S&P500, Dow Jones Industrial Average, Dow Jones Transportation Average and Russell3000. Can we get through those highs like the Small-caps, Mid-caps and Nasdaq already have?
I believe the answer is in the components. How are individual stocks reacting to those former highs? Are they breaking through resistance or running into sellers and rolling over? [Read more…]
Does It Make Sense To Short U.S. Stocks?
For us, the big question going into the weekend was whether or not the most recent leg higher in U.S. Stocks is the beginning of something bigger, a breakout of epic proportions, or just a major whipsaw that will lead to further selling into September and October, two of the most historically volatile months of the year.
We see various crowds. On one hand, you have the bearish cult who for many reasons have fought this uptrend the whole time. Whether they just missed the last couple of years in stocks or, worse in some cases, missed the entire decade, they’ve been very wrong. There’s even a group who wishes harm on the United States and elsewhere around the world, just because they disagree with decisions being made in D.C. They certainly don’t want stocks to rise. And then you have another group, who is indifferent and is just looking for a favorable risk vs reward shorting opportunity and they think this is finally it. [Read more…]
[Options Premium] A Marathon, not a sprint.
From time to time, a slowly developing opportunity presents itself and in doing so gives you multiple ways to profit — while also incrementally reducing your risk as time goes along. This type of situation is presenting itself currently in Marathon Oil $MRO. [Read more…]
[Options Premium] Getting Resourceful
Continental Resources $CLR has been consolidating in a range just below 4-year highs, and recent price action has brought it to a level where I like our odds for an income trade. [Read more…]
[Chart Of The Week] Money Keeps Flowing Into Consumer Discretionary!
This has been the big theme throughout this bull market: Money flowing into Consumer Discretionary stocks at a more rapid rate than towards Consumer Staples. By our work, this is characteristic of an uptrend in U.S. stocks and has been a great tell for a long time. You guys following along for the past few years know that well. We even nicknamed the Staples underperformance as, “The Most Bullish Chart On Earth” (See May 2017). [Read more…]
[Options Premium] The Times Are Ex-Changin’
Following up on our discussion from the September All Star Options conference call, we will lay out here the trade in $CME that we presented to subscribers. The stock move is underway, but there is still plenty of meat on the bone and I like the trade even more now. [Read more…]
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