For this week’s trade, buying $XLI January 130 calls for 35 cents or cheaper.
Get the full details, risk management procedures and targets for this trade here:
Expert technical analysis of financial markets by JC Parets
by JC
For this week’s trade, buying $XLI January 130 calls for 35 cents or cheaper.
Get the full details, risk management procedures and targets for this trade here:
Investor sentiment is bad. Historically bad.
Don’t take my word for it. Check it out for yourself.
Sentiment has only been this bearish four times over the last 40 years: Coming out of rampant 1970’s inflation, the Savings & Loan crisis of the early 90’s, the Great Financial Crisis of 2008-09, and the “Fiscal Cliff” circa 2012.
Do you remember those times?
And you see what happened in the S&P 500 after, right?
Is history going to repeat itself? And if so, how do we protect ourselves and our portfolios from the “risk” of being underinvested if that happens? [Read more…]
Energy names have been working for us. So there’s no reason to turn off the spigot just yet. Of course, mindful of our exposure in energy-related sectors already, I want to try to keep any additional risk exposure as limited as possible.
With this in mind, today’s play is a bullish bet that we think will take some time to materialize. And we’re going to use that assumption to help us lever into a trend at a cheaper cost of participation using a calendar spread. [Read more…]
I caught the last 30 minutes-ish of the live Elon Musk interview on TED Talks Thursday morning and I found it riveting. Sadly, I missed most of the discussion regarding his recent splashes with Twitter.
Picking up when I did, there were other things I should’ve been doing (writing this note, for example), but I was immediately hooked. I couldn’t peel myself away from it.
It felt like a real earnest look into the mind of a savant.
Say what you will about Elon Musk the Man, Elon Musk the Innovator, Elon Musk the Political Animal, or Elon Musk the Podcaster and Tweeter. I’m not here to pass any judgments on who he is, what he stands for, or how he accomplishes his aims.
What stood out for me during the chat was the laser focus he has on things he puts his mind to.
When he mentioned that he understands deeply how EVERY piece of his cars are made and assembled, and when he uttered that there is nobody on Planet Earth currently living who knows more about manufacturing then him, I believed him. He wasn’t trying to impress us with this information. He was saying it matter-of-factly.
Yet, as impressive as all his accomplishments (and failures) to this point have been, he has so many higher goals to achieve for himself, and by extension for mankind.
But at the same time, I was feeling a little sad for him. He had the appearance of an individual who is tortured by an ever-inquisitive mind that has no on/off switch. It’s just ON all the time, cranked to eleven.
It hit home for me.
As a Trader who is always trying to find new ways to pull money from the markets, [Read more…]
I read a book recently that got into the fact that any and all edges in trading, no matter how robust, degrade over time.
The author listed a variety of reasons, but the biggest one that caught my attention is that if the edge is so good, then the simple act of making a bunch of money exploiting this edge will eventually get discovered.
This is an incestuous business where people talk. Brokers talk to their clients. Clients talk to their industry contacts. Word gets around about so and so making all kinds of money. And then copycat traders act and move in to also take advantage of said edge. And this crowding in will work to eventually minimize or trivialize the edge.
Then it’s back to square one. [Read more…]
Happy Friday everyone! It’s a rare Friday when the U.S. Stock Market is closed!
I wanted to take this opportunity to remind you all that each Friday afternoon I post up a short video for subscribers highlighting any activity amongst ASO trades in the past week.
We review trades I exited (due to hitting profit targets or stop losses), adjustments to any open positions, and we quickly go through any new trades entered during the week.
It’s an opportunity for you to see how I manage my trades and it is my hope that you find it to be a learning process and a Best Practices refresher to help you as you navigate your own trade management.
New videos are posted up each Friday afternoon here. Bookmark that link and come back to it each week to get up to date on all ASO action!
Here’s that link again: https://allstarcharts.com/jamsession/
P.S. Today’s video is already live. We recorded it yesterday afternoon after the market closed.
Yes, it’s tricky both tactically and mentally to get long in the stock market right now. One look at the broader indexes would give any rookie market technician pause.
That said, there are still pockets of strength that are working and growing stronger — both on a relative and an absolute basis. Which, by the way, is not uncommon. Even in the most vicious bear markets, there are often certain sectors that see gains. And so a bear market may force us to be more selective when searching for bullish bets, but the opportunities are there for those willing to do the work.
With that in mind, today’s trade is one of those names that is thriving in this current market environment.
When one of the biggest stocks in the world in one of the most well-known names in the world breaks out of a two-year base to new all-time highs, we have to pay attention. There may be a lot of ways to interpret this price action, but one thing we cannot call this action is bearish.
And today’s early trading action and elevated options premiums are offering us a good opportunity to get advantageously positioned for a big move. [Read more…]