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All Star Options

[Options Premium] Adding Some Short Exposure

May 19, 2023

It's been a good run for many of our bullish long trades. As such, it wouldn't surprise me if stocks took a bit of a breather soon.

And considering so many stocks we've been tracking are starting to look pretty extended, I'm going to go fishing in the weak stocks pond to find some opportunities for portfolio diversification in the event that stocks go sideways or dip a little bit in the weeks ahead.

One nice thing is the stock market lift this week has really zapped options premiums across the board. So today's trade offers us a somewhat rare opportunity to get responsibly short with long puts.

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Will Bonds Catch Up to Tech Stocks?

May 18, 2023

From the Desk of Ian Culley @IanCulley

Tech stocks don’t care about the manufactured debt limit crisis. Nor are they bothered by the increasing probability of a rate hike next month.

Growth stocks seem concerned with only one thing – printing fresh highs.

The Tech sector ETF $XLK posted new 52-week highs yesterday. And the Communications ETF $XLC rallied within reach after taking out its Aug. ‘22 pivot highs. 

So where does that leave bonds and other long-duration assets? 

If these base breakouts across growth sectors hold, I imagine bonds have some serious catching up to do…

Why?

Growth stocks tend to trend with bonds since they’re both long-duration assets. Changes in interest rates directly impact US Treasuries and affect tech stocks more than other equities.

Check out the tight relationship between the Long-Term Treasury ETF $TLT and the Technology sector $XLK: