It's a big wide world out there. Luckily for us investors in the U.S., we aren't just limited to trading domestic companies. Often via ADRs, we are able to participate in opportunities in the very best foreign companies and conglomerates.
And right now, there are good opportunities shaping up in if we look overseas at some banking stocks.
Earlier this week, we got stopped out of Vertex Pharma $VRTX for a manageable loss. It happens. Now today, a vortex is pulling us in the direction of another Vertex -- Vertex Energy $VTNR. Crazy, huh?
In the end, stocks are all just ticker symbols with dollar signs attached to them that convey any kind of meaning to us. But nonetheless, what are the odds?
Weird coincidences aside, we're liking the setup in this energy name so let's get right to it.
If tech stocks are signaling that a bottom is in, we're of the mind that we'll find some significant beta in a badly beaten household name: The recently renamed Meta $META (otherwise known as Facebook...).
Chatting with JC this morning, he was drawing a comparison of META to what Gold Miners $GDX did in 2016:
While I prefer to let stocks prove themselves to me before taking a position, sometimes a situation sets up where the stars are aligning for a low risk bet that makes it worth the effort to get ahead of the crowd.
One such situation has developed in a name discussed recently in our Hall of Famers report.
We've experienced a pretty powerful bear market rally on the heels of yesterday's Federal Reserve interest rates announcement. Whether or not it sticks is anybody's guess. But one name in the financials space has stood out for its relative lack of participation in the recent rally off the bear market lows.
Stocks like these are the ones we want to leverage into bearish portfolio hedges. So let's get right to it.
Ok, maybe that title is a little dramatic. I couldn't help myself. I recently had a conversation with a trader friend who was dunking on Gold Bugs about the lack of income stream from Gold. It's just a damn rock! he said.
Anyway, I don't have any strong opinions about Gold either way. I just like to follow price and volatility. And right now, the options market may be offering us a tempting opportunity to collect some premium as the recent gold selloff has spooked the gold bulls a little bit.
The latest Quarterly Playbook is out, which has given us a bunch of ideas to begin exploring.
One idea stood out for me in particular because of a recent pullback offering a good entry point. It's in a bellwether dividend-paying stock that we wouldn't mind owning for the long term, but we're going to take advantage of elevated options premiums to leverage into a high-probability bet for some opportunistic income.
Feels like market conditions are improving a bit for the bulls, but we're still going to be picky here. One way we can improve our odds of success is to align our trades with relative strength.
Today's trade is in a sector that has seen both improving absolute price strength, and a widening relative strength gap compared to the broader stock market.
That's a blog post title I never thought I'd write. LOL.
Even more strange, the trade we're putting on today is in a public company with an unusual name I've never heard of before!
Weird times, indeed.
Steve Strazza and I looked at it a bit on Tuesday during our "Flow Show" on twitter and I was less than enthusiastic at the time. But as the trade has marinated around my brain a little bit since then, it has grown on me.
Volatility still remains relatively high across the board, with this morning's trading action further boosting it.
I'm on the hunt for some delta-neutral, short-premium plays to take advantage of this environment. But the trick is finding an instrument that is showing signs of potential range-bound action. Too many of my go-to sector ETFs are trending (mostly lower) and trends are the enemy of delta-neutral strategies.
I had to dig a little, but I think I found the right instrument for us to earn some options premium in.
As Strazza mentioned in our Telegram live chat this morning: "Not too many charts look as good as this one right now."
It feels hard to comprehend that we're finding leadership in Chinese tech, internet, and auto stocks, but it's happening. Politicians lie. Prices don't.
And one name we've got an eye on has been coiling in an extremely bullish high flag pattern.
