2008-2009 was a dark period for the banking industry. The "Financial Crisis" nearly brought the whole system to its knees. Stocks in household name banks became penny stocks (Citibank!), Warren Buffet had to rescue Goldman Sachs, and a few had to put themselves up for sale (Merrill Lynch), or even became extinct (Bear Stearns, Lehman Brothers).
For some long-term investors (and former employees in this sector), this is still a fresh wound.
But charts in this sector are starting to tell a different story.
One thing you'll read between the lines in nearly everything we do here at All Star Options and allstarcharts.com: We stick with winners. We ride trends. We get long relative strength and we get short relative weakness. We don't overcomplicate things. We don't need to be the Hero who shorts a parabolic stock at its zenith, or buys the oversold stock at its generational bottom. Those trades make for sexy stories, but that graveyard is a mile wide and 50 feet deep.
With this in mind, here's an undeniable leader that is setting up again:
As Steve Strazza was putting together the latest "2-to-100" report, he and I were chatting about his latest great stock idea. He is pretty excited about this one, and who am I to not join him?
As December gets under way, it’s time to review positions with December options that remain open (haven’t already hit profit targets or been stopped out).
Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.
As it turns out, we only did five trades in total with December options. Currently, we only have two open positions with December options remaining on the books, and only one of them requires any action. The rest have already hit our profit targets or stop loss levels. In the scoreboard below I denote the date we exited each position.
Interest in stocks with direct and indirect exposure to the "vaccine trade" is through the roof. And with this interest comes some wild price action in both directions.
Today's play is in one of those names, but we like it more for its chart action than anything else. (It's kinda what we do here) ;)
I own a 2015 model vehicle and I plan on driving this car until it crawls. I'm not interested in being in the rat-race of always having the sexy latest model car with the equally unsexy monthly car payments. Been there, done that. No longer interests me. I'd rather just keep my current ride on the road as long as I can.
It appears I'm not alone in this as companies that sell spare car parts are seeing their stocks perform very well.
The ASC research time has been hitting the bong for some deep thinking and far out trade ideas. Tom Bruni published this piece on opportunities hidden behind a cloud of smoke in the marijuana stocks space.
One pretty speculative idea stood out to me which we'll be taking a hit off today.
Wow! What an open for stocks today. The votes are in and investors have decided the winner is: STOCKS. Of course, I'm told there's some positive vaccines news which may be accounting for the run up we're seeing today. Either way, all the major stock indices are printing new all-time highs today --- something you don't see in bear markets.
Our latest Under the Hood report is out and there's a bevy of opportunities to choose from. And given the week we've just had, my favorite idea supports something I think we all could use a little more of -- rest.
I don't think there's any doubt that we'll be seeing a surge in healthcare spending in the coming months and years. And while that makes for a good story, the charts in the healthcare sector offer a more compelling narrative.
Breaking away from custom here, we'll be taking a shot in a laggard in this sector that offers us a pretty clear risk management level and an affordable opportunity for us to buy time for the catch up to commence.
