I’ve received a few questions from readers about playing bounces in some oversold stocks.
The most recent was Facebook, er… Meta (whatever).
An opportunistic trader hit me with this question:
Is anybody interested in taking a position in these heavily discounted calls in $FB today?
Discounted? Au contraire, mon frère.
Shares of $FB stock may be “discounted” after getting shellacked to the tune of -26% or so. But there are no discounts to be found anywhere on the options chain.
Dividend Aristocrats are easily some of the most desirable investments on Wall Street.
These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve.
That's why we're turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we're curating a list of stocks that have raised their payouts every year for five to nine years.
We call them the Young Aristocrats, and the idea is that these are "stocks that pay you to make money."
Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
We held our February Monthly Strategy Session Tuesday night. Premium Members can access and re-watch it here.
Non-members can get a quick recap of the call simply by reading this post each month.
By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends.
This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big picture” point of view.
With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
The path of least resistance is higher for yields, as the market continues to punish investors for buying bonds.
As long as that’s the case, we want to look for short opportunities when approaching the bond market.
Since the shorter end of the curve has ripped higher, the moves in these contracts and ETFs are extended. They simply don't offer favorable risk/reward trade setups at current levels.
We’re better off looking for ways to play rising yields further out on the curve in this environment.
We’re going to discuss how to do just that by covering a few charts that are setting up on the short side.
First up is the 30-year Treasury bond futures:
T-bonds are carving out a multi-year head-and-shoulders top above their pivot lows from last March.
If you've been involved with crypto, you've probably heard the term "whales" thrown around countless times. There's an almost conspiracy-like aura surrounding this cohort of Bitcoin holders.
With an incredible amount of attention placed on this trader cohort, it's important to understand their role in driving price action, macro trends, and more importantly, following their movements.
The overwhelming majority of options trades we put on at All Star Options tend to be structured in a way to participate in moves that should take place within 2-8 months. The shorter duration trades are usually trades where we are net short premium (naked puts, short strangles, bear call spreads, etc), whereas our longer-term trades tend to be ones where we are net long premium at attractive prices (in volatility terms).
Today, we're doing something we've never done here. We're making a long-term bet utilizing LEAP options.
"LEAP" is an acronym for Long-Term Equity Anticipation Securities. Essentially, this means we're taking a position in options that have greater than a year until expiration.
If you were on the @allstarcharts twitter SPACES chat this morning (every trading day at 11:30ET), you heard us riffing on today's trade.
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
Commodities and cyclical assets have remained resilient, defying headwinds from the US dollar for nearly a year.
But the US Dollar Index $DXY is sliding lower as evidence mounts in favor of further weakness…
Could those headwinds soon fade away?
Today, we’re going to highlight some critical developments and discuss what they mean for the US dollar, stocks, and commodities in the weeks and months ahead.
Let’s dive in!
First is a chart of the US Dollar Index $DXY:
Its inability to hold above the November 2021 highs screams "failed breakout!"
I was chatting with an All Star Options member this morning and he asked me a very insightful question:
“Sean, I’d be very interested in your thoughts on why you choose not to make a trade in certain setups?”
He went on to elaborate that he’d like to know the things I look for that are possible “red flags” that prevent me from pulling the trigger in otherwise good stock setups.
The overwhelming majority of trades I put on for All Star Options subscribers are in stocks that the All Star Charts team has identified as stocks we want to be in (either long or short).
The most common reason I won’t pull the trigger is
