Stock Market-What Do You Know About Downside & Upside Risk Management? Read
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May 20 2022 Option Professor Opinions & Observations
IMPORTANT-Go to optionprofessor.com and get “How to Hedge Downside RISK & Upside SURPRISES”
Another week in stocks and more new lows to boot. We’ve told readers for such a very long time (pivot was Nov 2021) that when the Fed REMOVES LIQUIDITY that things don’t go up in VALUATION and when you throw in INFLATION we see PROFIT MARGINS get hit (WMT TGT). You can get a headache and LOSE A LOT OF MONEY listening to TV touts, investment firm fronts, and newsletter perma bulls keep talking of bounces and bottoms to keep your attention or your money. With us…….you can’t snow the snowman:):):)
GOOD NEWS THIS WEEK- we have created a LINE IN THE SAND in the INTEREST RATE MARKET which is the US Treasury 10 year yield at 3.25% (closed UNDER 2.80%). Why is this good news?….because it MAY put a TEMPOARY FLOOR at SPX 3800 and help the interest rate/duration-earnings damaged TECH SECTOR (28% of indexes) stabilize and at least create a TRADING RANGE before the realities of high inflation, tight labor market, energy & food, more valuation compression slap the market once again. We have said BONDS peaked in 2020…STOCKS peaked in 2021…and we look for COMMODITIES peak in 2022!
In case nobody told you…..the CREDIT MARKETS rule the economy, valuations and much more. Do you think your stocks, your house and everything else dealing with BORROWED MONEY would have risen from 2008 to 2021 without near ZERO interest rates, an EXPLODING money supply and low inflation? Well, Pancho & Cisco (low rates & low inflation) have left the building. When will the markets bottom??
The truthful answer–no one knows–BUT has staying on the Titanic because one day they will dredge it off the bottom to resurface one day been sage insight? We’ve ENCOURAGED you to LEARN HEDGING!! Do we see any TV guys, investment firms, newsletter guys tell us about UP-DOWN RISK MANAGEMENT?
IMPORTANT!-Our view is that a parabolic VIX, News Event, Fed interceding would be present at BOTTOMS IMPORTANT!- We have DATA on an INTEREST RATE DIFFERENTIAL that was present at the LOWS around 1975, 1982, 2002, 2008, 2016, 2020 that we believe we may have to see RISE prior to a STOCK BOTTOM
Go to: FREE WEBINAR- May 31st…….GET the LINK at optionprofessor.com…..submit email and valid phone Topics will includes HEDGING…STOCKS…OPTION STRATEGIES…INCOME…Oil, Metals, Ag-Fertilizers, Bitcoin! The OPTION PROFESSOR has Decades of Knowledge to share and has Educated Thousands Worldwide!
Remember All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM/broker to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions are for informational purposes only. It is NOT advice.
