The running metaphors for Nike $NKE stock are too obvious, so I'll do my best to avoid them. However, it cannot be denied that last week's monster gap higher coming out of earnings has launched the stock around the final turn and it is now sprinting towards a big, fat, round number - $100. That big magnet coupled with a pretty common phenomenon called "post earnings drift" following positively received earnings events sets up a pretty compelling case for a profitable move setting up.
Continuing with a theme that emerged for us this week, we're taking recent volatility climbs as a gift to help us get through a typically slow summer trading period. Weeks like this one -- just ahead of a holiday week -- are the kinds that level-headed premium sellers wait for when putting on their "income trades."
I feel like the recent minor skirmishes in U.S. stocks over the past week have been a nice little gift for premium sellers heading into what is a traditionally the slowest period of the calendar year. With the Independence Day holiday on the horizon, it's looking to me like a great time to start selling some premium in the indexes. So we've got a quick and easy one to set up before you light up your grills and sparklers.
Last week, Tom Bruni penned a post titled Global ETF Carnage Continues, highlighting how ETFs representing stock markets around the world have been getting hurt by US Dollar strength. While he isn't yet calling a bottom, there was one particular Latin American ETF that was beginning to show signs of bottoming and it is a scenario he'd like to see replicated in more global ETFs to give him confidence the turn is coming.
The best way I know how to stay engaged in this possible turn is to have some skin in the game.
If you're like me, you think ATM charges are a crime. And one of the worst offenders is Chase, part of JP Morgan's umbrella. It's time we make them pay us back for all the ATM fees they've stolen from us for the privilege of having access to OUR money.
It just so happens, I see a great opportunity shaping up to make some high probability cash flow to replenish our bank account balances.
AMD has had a tremendous run off this April's lows, where it bottomed out around $9.00. Today, it's trading north of $16. That's a greater than 75% move in about 11 weeks. Wow.
But we have some very important technical and supply-and-demand reasons to believe the move might only just be getting underway. And we want to participate, but limit our risk in doing so.
Google is making a run at a big fat round number - 1200 -- which would also be a new all-time high, and time is of the essence to get aboard what could be a rocket ship ride much, much higher. We don't have much time to waste so I'll just cut right to it.
When you talk about the fundamentals of these banks, then people get really scared, but there comes a certain point where that horribleness gets priced in.
I'm rarely, if ever, a bottom-feeder in the stock market. But knowing that $DB is just too big of a name to allow to go bust (I think regulators learned their lesson with Lehman Brothers?), it seems like a low-risk, potentially high reward play to dip our toes in the water in a risk-defined play to participate in a rebound.
Sector rotation has been a hot topic as this bull market keeps finding fresh legs to pull us higher. As we scan the entire marketplace looking for clues as to the next sector to wake up, we've identified the Home Builders as a viable option with some clearly defined levels to keep it simple.
Americans love their burgers. And customers around the world love American iconic brands. These two forces are unlikely to change in the near future, and thus sales at McDonald's restaurants around the world should continue to be strong. Of course, I couldn't care less about the fundamentals. I'm just watching price action and volatility and see a nice opportunity to profit shaping up in the options market for $MCD this summer.
Rotation is the big word that's got us stock market bulls excited around here. It seems every couple of weeks there's a new sector that takes the baton to lead the broader indices higher. And just when one sector looks like it might be running out of steam, another one shows up to take that baton further down the track.
How long until the track runs out of runners? We don't know, but we still see a lot of contestants lacing up their shoes. Either way, after such a great relay race, if you're concerned that the next runner has a higher than normal chance of stepping on a crack, but you'd hate to be sitting on your hands if he builds on the lead, then I've got a trade that I think allows you win in both scenarios.
