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Jim Kenney

Author Archives: Jim Kenney

Option Professor-Stocks Declare-Let’s Throw Caution to the Wind-Good or Bad Idea? Read It

January 15 2023 Option Professor Opinions & Observations

Bad mouthing the Stock Market since October has been like Badmouthing Santa Claus:):). On SPX; our first buy signal came at 3700, then at 3850 and the next hurdles are at 4050 and 4150. The whole board internationally has gone thru the roof basically on the belief the Fed is close to the end of hiking/pause, we will have a soft landing, China reopen will lift all boats, and the labor market will trump the yield curve.

What could make it continue & what could kill the rally.??

The CPI came out in line but party hats were distributed due to an easing (not a drop) in wage growth. The inverted yield curve has a 100% forecasting history (although Campbell Harvey, the Godfather of the inversion theory is allowing for the possibility that “this time it’s different” due to strong labor and a self correcting mechanism as corporations and consumers pull back their spending. The Employment Cost Index comes out in 2 weeks and is considered the gold standard of gauging the labor market. The Fed is not satisfied with a 6.5% Inflation rate (the REAL INTEREST RATE is still VERY Negative). Obviously; basic math tells you we’re closer to a pause than last year BUT rate cuts may only occur with a GROWTH SCARE in the 2nd half of 2023. That’s not bullish. How’s that happen? How about the fact that PMI’s are tanking or Lag Effects of the Fed Hikes or Housing Falling Off the Cliff created by 2.75% mortgages? Earnings season has begun and the banks made good money but hid it a bit by INCREASING LOAN LOSS reserves. Wells Fargo said to the effect that NEW Mortgage business LIMITED primarily to existing customers which does not breed confidence. Positioning is obviously changing and the VIX at 18 hit a 52 WEEK low and in the zone of LOW reading in the topping year of 2021. SUPPORT SPX 3950 to 3875. CAVEAT EMPTOR Time

Remember; Not a good idea to Fight the Fed nor to Fight the Tape. The tape has been strong and yields have been dropping and if the 10 yr closes UNDER 3.4% then hello 3%. The VIX shows that fear has left the building as 2023 forecasts were negative and the Algos pressed the weak side (no sellers). The economic data has shown signs of rollover and should they accelerate then off we go. EARNING & GUIDANCE will lead the way in the weeks ahead (this week we get some variety with Financials, Transport, Staples, Industrial Metals, and Energy represented). Banks are talking BUYBACKS so if the Fed said get ready for pain (that’s pain?). So far (as usual); 2023 forecasts wrong (maybe It’s UP 1st Half SLIP 2nd Half?) Is El FED done? PREMATURE. Real Interest Rates & Nominal Interest Rate ABOVE Inflation Rate=End Game If Inflation Rate capitulates to the 3% neighborhood….they could be done….hold it until something breaks

Look at this Asset Mix INSTEAD of 60%/40% NOW? Stocks 25% Bonds 40% Cash 20% Alternatives 15%??? What SECTORS may make the most sense for 2023. Time to Throw Caution to the Wind or Fade It into Fed meeting be that at SPX 4000-4150-4400?? INSTEAD of Just Pricey Chat Rooms, Newsletters, Courses…

The Option Professor-Graduate Boston College-Trained at The Options Institute- 35+yrs. of Knowledge GET 3 PDF Reports #1 How to HEDGE Downside & Upside #2 Our Best Ideas/Sectors #3 Our Technicals PLUS a 1 on 1 Hour Long REVIEW of Our Views on Your Markets & Strategies AND We SHARE our IDEAS

Everybody wants to HIT you up for Annual/Monthly Charges. Many of You Are DISSATIFIED With This Way We Work on a FLAT Hourly Rate (VERY Reasonable). It’s Fair & It’s Smart. You’ll Like the Way it Works!

EMAIL US at [email protected] you contact info/talk to us directly. We Think We Can Help!

Thanks Everybody/Talk With You Soon,

The Option Professor/optionprofessor.com

REMEMBER All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions are provided for informational purposes only. It is NOT advice.

Option Professor- IMPORTANT ANNOUNCEMENT

January 7 2023 Option Professor Opinions & Observations

In 2023; We’re extending an INVITATION to our readers that we believe can be of ADDED VALUE to you! We believe we’ve provided solid opinion on Stocks-Growth Value, Income, International, Oil Gold & more!

Many of you enjoyed our 1 hour ONLINE 1 on 1 meetings where we SHARE our opinions on areas like option strategies for Income, Protection, and Spec Trading. We also SHARE our opinions on sectors we like and what to AVOID. Investors use OUR opinions to get ALTERNATIVE opinions on ideas they either paid for or have been encouraged by others to pursue. This has helped many AVOID costly ideas in 2022. We have OVER 35 years of Knowledge to share and manage our own portfolios with RISK MANAGEMENT.

Here’s the DEAL. You Get 3 PDF Reports on HEDGING Down & Up Risk, Our BEST Sector & Income Ideas The BIG VALUE; we believe is in the 1 hour ONLINE 1 on 1 meeting where we can help with specific needs. Whether you are a NEW or VETERAN Investor; we believe the odds that you will LEARN from us are good.

We DO NOT ask you sign up for EXPENSIVE annual of monthly services but for specific HOURLY meetings. HERE; YOU can control when you’d like UPDATES or ALTERNATIVE opinions on options & positioning ect.

C’mon…..we know what’s out there. Chat Rooms, the Hype Newsletters, the Courses that lead nowhere. It’s a NEW YEAR 2023; Lots to Cover. Stock Market, Review Your Ideas, Dividends, Oil/China-EM/Metals++

Talk Soon

The Option Professor optionprofessor.com

REMEMBER All investing involves a risk of losing money and it is not right for everyone CONSULT YOUR BROKERAGE FIRM to determine your own suitability and risk tolerance for any investing. Past performance is not indicative of future results. Information and opinions are provided for informational purposes only. It is NOT advice.

Option Professor-Stocks-In 2023-There Are A Lot Of Different Ways Things Could Go-A Must Read!

December 17 2022 Option Professor Observations & Opinions

With the Holidays upon us (we’re off to Turks & Caicos); this week we are going to be brief/to the point.

In 2023; we could see the labor market ease and the judgements by the Fed may lead to a more accommodative policy. This would take pressure off multiples and help stocks. China’s reopen could be a nightmare health wise (many people ELECTING to not leave their apartments are infections skyrocket). The consumer may have enough gas in the tank to take us thru Q2. In this case the recession is pushed back maybe to 2024. POPULAR opinion is bad first half great second half (how did you accounts do this year following the mouthpieces you followed??). The Fed can’t forecast exactly/Neither the knuckleheads who tout and charge lots of money and give lousy picks and lose money and tell you to hang in there ect.

The second outcome could be China is OK by summer and they bid up commodities like energy, gold, industrial metals, agriculture. This would be a nightmare for the Fed if China boosted energy & food inflation maybe pushing Fed Funds thru 5%. Also; EARNINGS have not been cut and the way the consumer is spending with credit cards; we will see if operating leverage is hit by costs as revenues may be up but margins pinched. Employers are not too keen to cut people knowing it’s hard to get them (rate is 3.5% and 1.7 to 1 avails to seekers). If earnings go to 2.00 or less on SPX & we get the Fed Funds above 5% then the P/E could get 15…that’s how you get in and around SPX 3000. We’ve had reversion rallies in the Dollar & Yields and if they end and we revert back to higher Dollar & Rates. To us; the markets look like drug addicts seeking cheap money & even the hint/rumor the Fed will give them; the addicts go nuts.

In 2022; We feel we’ve had a good grasp on what sectors to be in & how to roll short term Treasuries. If you chased silly hype artists and dubious forecasts; It’s time to hear us out and include us & our opinions.

Call Us at 702-873-8038 or Email Contact Info to optionprofessor.com Stocks Interest Rates Energy Gold+

The Option Professor-Graduate Boston College-Helps New & Experienced Investors-35 yrs. of Knowledge

Give it a Try! You Should Have Done so Already!

Happy Holidays

The Option Professor

Remember All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions are provided for informational purposes. It is NOT advice.

Option Professor-Stocks-What is the Market Discounting? What Do We See Ahead? Read It!

December 10 2022 Option Professor Opinions & Observations

The real question right now is what is consensus and how likely is that to become fact? It seems like everyone is saying 2 basic things. #1 We will have a soft landing with a tough first half of 2023 and a brilliant 2nd half. #2 The Fed is imminently going to pause and later in 2023 start easing. We see both of those prognostications as suspect. First; we will see the consumer will continue to spend as their savings are not totally depleted and their access to credit (albeit at rates exceeding 30% in some cases) is there. This is inflationary so if we get into the 5% handle in 2023 it’s an accomplishment but not one that the Fed will recognize as it ultimately needs Fed Funds ABOVE the inflation rate to quell this thing. So revenues and earnings may hold up a lot better than people suspect in the near term. Secondly; the Fed is not thinking cutting or easing too long as the numbers are not bending (PPI UP & Wages UP & Spending by Consumers UP). CPI this week may get a dip but it’s light years away from 2% which the Fed desires. The UNEMPLOYMENT rate is at 3.7%; a 50 YEAR LOW. Does that sound like the end of the inflation fight? Investors are being told that no defaults & downgrades are to be material in 2023. We disagree & in fact we see 2023 as the exposure of the zombie companies & leveraged loans who will have a coverage ratio on their debt become problematic. There are more shoes to drop than in a typical Nike shoe factory:):)

We told you 2 major switches INTO value & staples/dividend payers in the last year (Nov 2021/May 2022) and both have been brilliant. We told you recently that Crude Oil had big resistance at 94 and would drop We told you 2020 was the generational low in interest rates and 2021 was a top in stocks. We said we suspect 2022 may be the top in commodities as deflationary forces lick in. If the Fed pauses too early then all bets are off. We have views on what to do with stocks, bonds, Gold, Energy, the Dollar, China ect.

ONE WEEK LEFT before we go to Turks & Caicos and then we return after New Years! Time to Call Us!

Call 702-873-8038 or Email contact info to [email protected]….Review Your Markets/Our Ideas!

The Option Professor-Grad Boston College-Helped Thousands of Investors- 35yrs of Knowledge to Share

Talk to You Soon/Happy Holidays!

The Option Professor

REMEMBER All investing involves risk and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Information & opinions are provided for informational purposes only. It is NOT advice.

Option Professor-Stocks-You Don’t Get Hit By the Train You See Coming- That’s the Key! Read More

December 3 2022 Option Professor Opinions & Observations

This week we got a huge move up after Powell’s talk and a sober dip when the jobs report was stronger. Of course; on Tuesday’s QUICK ALERT and to customers we spoke with we told them that SPX 4100 was an area to fade and SPX 4006 was an area an area to support as the methods showed this very clearly.

We believe in REVERSION TO THE MEAN which many times is the “train most investors don’t see coming” For Instance; in January, we had SPX at 4800+ and our LT averages were at 3700….who’s looking for a big Drop….we were. In June & October, SPX was 3500-3600 and the LT averages were way above the market.. who was looking for looking for a big Rally…we were. In Sept-Oct, with the Dollar Index at 115 and 10 year Treasury Notes at 4.35% and the LT averages were way UNDER the market….who was looking for a Dollar drop and Yields to drop….we were. In June when Crude Oil hit 120+ and October when Gold hit about $1600 and LT averages on Oil was way under the market and LT averages were way above the market in Gold…we looked for Reversion. These are the trains that have hit investors who are not looking.

RIGHT NOW We have seen a lot of markets already had their reversion to the mean and we will now see if they can turn into extended sustainable trends. The economy is strong as the consumer is pulling out all the stops to keep spending. This includes but is not limited to HARDSHIP WITHDRAWALS to their 401k’s (Record) and use of Credit Cards (Record). They are leveraging themselves. In the Jobs Report; Monthly WAGES are rising on an annualized basis 7%+, on a 3 months basis 6% and on an annual basis 5% which way faster than needed to bring inflation down. Owners Equivalent Rent-Food-Gas= Persistent Elevated Inflation. The PCE this week was elevated & unless the CPI is concocted by Martians-it should be elevated.

TWO TRAINS for 2023 we don’t see coming. The consumer doesn’t run out of money and EARNINGS don’t fade and maybe jump along with a Fed who switches to 2% is a long term minimum rate not an average rate. The terminal rate stops Under 5%. The SPX stays above 3800 and takes a shot at 4400-4600. The SPX 3491 in October is the LOW; the 20yr-40yr cycles bottomed and the soft landing is achieved. Jobs keep getting created and the consumer-economy (GDP) continues to surprise on the UPSIDE-Glory days.

The second trains is that the yield curve inverting again predicts recession accurately. We see the LABOR MARKET via Unemployment rise .5% which historically led to big ACCELERATION in the jobless rate. We see credit hard to come by (banks are stingy now except on high interest credit cards). We see real estate listings go from discounted prices to a flood of listings (Kauai listings are up almost 50% already!). We call this the AVALANCHE and our thoughts may go from things don’t happen so fast to shock at how fast things can happen. Global real estate gets repriced & a recession hits Europe, USA and Asia & EM at once

Time for Us to Talk. Contact Us at 702-873-8038 or Email contact info to [email protected] We go over HEDGING Downside Risk & Upside Surprises. We can REVIEW Your Markets-Share Our Ideas. The Option Professor-Graduate of Boston College-Trained-The Option Institute-35+ yrs. of Info to Share

Give it A Try! You Should Have Done it Already!

Talk Soon,

The Option Professor

Option Professor-Stocks-Get Ready-Things Are About to Get VERY Exciting-Are You Ready? Read

November 26 2022 Option Professor Opinions & Observations

Welcome Back! The stock market has just had a tremendous REBOUND off the OCTOBER LOWS which was NO SURPRISE to us as we said the VIX was at 35 AND we were OVER 600 SPX points UNDER our 1 yr SMA which was OVERSOLD ++ and we were entering a PERIOD WHERE THE MARKET MUST GO UP. We say that because use your common sense….Vanguard Black Rock Schwab JPM Merrill & the rest have many TRILLIONS of DOLLARS in both stock and bonds in client accounts. The YTD RESULTS in those account in October were DISASTROUS with the SPX at 3500 QQQ at 254 and the 10 yr Treasury Notes was at 4.33%…..this translated into TRILLIONS of looses in values in Stocks AND HISTORIC losses in Bonds which were supposed to be safe investments. Sure; you get your money back at maturity but 10-20 YRS.!

Clearly; the Fed doesn’t want a crash and a mass exodus combined with a buyers strike going into year end was NOT an option. Now the story of hold forever, buy the dip, keep adding has an audience again.

RIGHT NOW! Some stocks have come UP 100% off their LOWS. The CONSENSUS is that the Fed is close to the end & the terminal rate is 4.75% AND cutting rates next year is in the cards. Of course; it’s possible

HERE’S WHAT IS ALSO POSSIBLE…..The VIX is now at 20. This is EXACTLY the neighborhood where the rallies PEAKED in Jan-Feb and April and August. The P/E ratio on SPX has returned to higher levels. The SPX has rallied 550 POINTS above the LOWS. We see MAJOR SUPPORT 3800 RESISTANCE 4060-4175.

SOMETHING HAS GOT TO GIVE….We see 2 schools of thought (there are many schools:)….Let’s Consider 2

#1. Inflation will recede….rates will decline…jobs remain-consumer spends…valuations expand…BULLS rule In this scenario; the Fed gets SOFT LANDING & investors accounts are restored to the glory days of 2021 EARNINGS on SPX spike 2.50 and the valuation goes back to 20X+ so we get an SPX with a 5000 handle.

#2 Inflation is STRUCTURAL and with SHELTER calculated with OWNERS EQUIVALENT RENT extending the high level PLUS Food & other factors & inflations stays with a 4% to 6% handle in ’23-Fed Funds 5%-7%. Mortgage Rates have DOUBLED & the Dallas Fed talks of a 20% drop in housing (after Up 40% still high). Affordability (Income & Renters to Buyers) ugly-Income needed UP and only 1 of 8 renters vs 1 of 3 in ’21 The YIELD CURVE has INVERTED big time across the board AND has preceded the LAST 10 Recessions. Yes! the Timing is Imprecise (12 month on average) BUT the Eventuality has been precise. Consumers appear to have drained their savings & hit their credit cards to a RECORD level. Maybe they can handle it. LEVERAGE usually ends badly with higher rates & a Fed mandate still unfulfilled. Maybe HARD LANDING.

HOW WOULD WE PREPARE for 2023? Good Question and at this point you are Invited to Contact Us. Most of where investors get their information from is TV, Services, Advisors, Newsletters, Friends, Internet All of these sources may have conflicts of wanting eyeballs, recommendations and charges to defend. Yeah; you got a rebound lately BUT how happy are you with the ride in 2022 & do you really want more?

Call Us at 702-873-8038 or Email your contact info to [email protected]. We think We Can Help We EXPLAIN How to PROTECT portfolios Against Declines & Upside Surprises PLUS Review YOUR Markets in a 1 on 1 ONLINE session. This is an INDEPENDENT look at the Markets & Strategies YOU are Focused.

The Option Professor-Graduate of Boston College-Trained at The Options Institute-35+Yrs. of Knowledge

Give it a Try! You Should Have Done So Already!

Talk Soon,

The Option Professor

REMEMBER All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM-advisor to determine your own risk tolerance & suitability. Past performance is not indicative of future results. Information and opinions are provided for informational purposes. It is NOT advice.

Option Professor-Stocks-Yield Curve Explodes & Oil Tanks-What’s Going On? What’s Next? Read It

November 19 2022 Option Professor Opinions & Observations

If you have been reading our QUICK ALERTS; you should know we WARNED YOU that if Crude Oil could NOT break thru the 95-100 area that price would be vulnerable. We Encouraged investors to look into COVERED CALLS COLLARS and REPLACEMENT TRADES to protect your values and adjust them if resistance is broken. EVERYONE tells us that the supplies are low and China’s demand and next spring’s summer driving season reload will bring us to 120 bucks a barrel. OUR VIEW is that these kind of for GUESSES are best left for conversations with buddies with your favorite beverage in front of you at your favorite bar and foot rail:):). WE ARE AWARE that the SPR’s are supposed to stop next month and oil company shareholders DEMAND return of capital not investment AND interest rates are prohibitively high to encourage borrowing….all bullish longer term EXCEPT if we have a RECESSION & COVID turns ugly. We are more than willing to consider entry points into support as China reopen after the Q1 ends & Pacific Rim demand plus USA & Europe may help but RIGHT NOW markets have been bid up-sell off hurts more.

On the interest front….predicting where the “terminal rate” for Fed Funds is another subject that is best discussed at the bar & foot rail. The CPI is 7.7% and PPI is 8%. Bullard says that terminal rate could be 5%-7%. Where does he get that from? EASY ANSWER Should inflation drop only toward 4% and Fed Funds have to get ABOVE it before they stop you get 5%. Should inflation get to 6% and Fed Funds have to get ABOVE it you get 7%….Do you think prices reflect that….neither do we. Owner Equivqulent Rents are a big factor. Here’s some stats. It takes $107 grand of income to get a medium priced house UP 46% in a YEAR and only 1 of 8 current renters could buy DOWN from 1 in 3 a YEAR ago. REFIS are DOWN 88%! DO YOU REALYY THINK rents are going to tank/ The DALLAS FED said it expect HOUSING DROP of 20%!

The YIELD CURVE on 2-10’s are at VOLKER 1981 numbers & while we’re not going to 16% fed funds; 3/75% is a joke. Everyone who says “pivot-lows” are in are probably long stocks & bonds. Remember that!

Did you get a “service” and are disappointed? Are you short term trading and not happy? Time to Call Us!

We have PDF Reports to Explain How to Hedge Down & Up Moves Plus Our Indicators-Market Direction ALSO A 1 on ONLINE Review of YOUR Markets & YOUR Strategies so YOU Get a FRESH LOOK at MKTS.

Stocks-Tech-Energy-Gold-Silver-Bonds US Dollar Europe-China- Japan Mexico Brazil Crypto…much more!

The Option Professor-Graduate Boston College-Trained at The Options Institute-35+ yrs of Knowledge Call Us at 702-873-8038 or Email Contact info [email protected] Let’s Talk. We Can Help.

Give it a Try You Should Have Done it Already!

Talk Soon,

The Option Professor

REMEMBER All investing involves risk and it is not right for all investors. CONSULT YOUR BROKERAGE FIRM to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions are provided for informational purposes only. It is NOT advice.

Option Professor-Stock Market- Bull Market Or Reversion to Mean? Rates & Dollar Peak? Read It

November 12 2022 Option Professor Opinions & Observations

WOW! The last week has seen prices move in a parabolic fashion and the reasons were outlined in OUR QUICK ALERTS so make sure you get them and read them! For YEARS we’ve ENCOURAGED you to get our PDF Report on PROTECTING portfolios from DECLINES AND UPSIDE SURPRISES. You should get this file.

We have said we think INFLATION did peak in May at about 9% and that frothy things like durable goods, apparel, air fares and used cars would be the first to drop. Other areas may slow a bit like shelter, health care, owner equivalent rents, new car prices, food prices AND Fuel Oil was UP 19.8% & winter’s here NOW BOTTOM LINE- The CPI report is pointing in the right direction & getting UNDER 5%-6% may= Recession EARNINGS for Q3 suggest a slower trajectory if you take out ENERGY and their obscene profits. Despite a spike in prices this week; for the year the Dow is down 7% (more value stocks), S&P is down 16% and the Nasdaq is down 28% so we get a relief before the holidays & New Year reinvestment of pension plans ect.

We have TOLD YOU 3 THINGS that have come home to roost. #1 the SPX was VERY OVERSOLD in the month of October basis our moving averages when the VIX was around 35 and the capitulation to SPX 3500. #2. We told you the DOLLAR INDEX was VERY OVERBOUGHT basis our moving averages above 110-115. #3. We told you that the 2 YEAR TREASURY YIELD was VERY OVERBOUGHT at 4.75% basis our moving averages AND a 3.75% Fed Funds rate. NOW ALL OF THEM ARE REVERTING TO THE MEAN.

RIGHT NOW. On a short term basis WE COULD see (like we did in JUNE) a 10 Year TREASURY YIELD REVERSION toward 3.7%-3.50% best case 3% & then a resumption of higher rates. WE COULD see a SPX REVERSION to 4100-4175 or best case 4350 (August highs) and then a fade as EARNINGS fade-P/E’s slump. WE COULD see a DOLLAR INDEX REVERSION to 105-103 best case 97 and then a return upward

CONCLUSION! The Federal Reserve meets on December 14th and then NOT again until Jan 31-Feb1…that is a LONG Time between meetings. Should they go 50 basis points and we get another slight fade in CPI; we stand to see a REPEAT of after the JULY meeting (Jackson Hole gave them the month off) and their RETURN in SEPTEMBER. We saw YIELDS tank from 3.50% to 2.50% and SPX go from 3650 to 4350 and the DOLLAR INDEX went from 109 to 104. REMEMBER when they returned in SEPTEMBER all that REVERSED!!

QUESTION? Does the Fed want to play that game again? Does that help their mandate of stable prices? OUR GUESS is we are looking at an opportunity to DERISK lousy stocks & Covered Calls/Collars on others

Get the PDF Reports on PROTECTING Against Declines & Upside Moves and Our Technical Indicators Also; A 1 hour 1 on 1 Online Session REVIEWING Your Markets Using Our Indicators & Insights-Opinion Stocks, Rates, Energy, Financials, Industrials, Overseas, Gold-Silver Copper, Tech-Crypto, US Dollar & more

Give it A Try! You Should Have Done It Already!

Talk Soon,

The Option Professor

REMEMBER All investing involves a risk of loss and it is not right for everyone. CONSULT YOUR BROKER- BROKERAGE FIRM to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions provided are for informational purposes only. It is NOT advice.

Option Professor-Stock Market- Did We Get A Capitulation Low October 13th? Read More!

November 5 2022

While we were enjoying the Azores, Madeira Island and the Grand Canaries the bear market bounce from SPX 3500 to 3930 occurred. Of course we told everyone that the set up was there just like in other rallies this year when the VIX was 35-40, the SPX was way UNDER its moving averages and quarterly earnings were about to be announced (positioning on the sell side temporarily exhausted. Pretty much textbook.

After taking out resistance of SPX 3810; it was off to MA resistance at bout SPX 3920 with still an outside chance of SPX 4040 and 4100 (gap) and 4160 UNDER the right set of circumstances. Two helpful things would be a further drop in the DOLLAR & YIELDS combined with a positive outcome at the G-20 meeting and progress on the CPI. We had an opportunity to get JPM 6.40% coupon bonds UNDER par in October and that is now gone. OUR BIG KEY as regular readers know is the SPX closing & sustaining ABOVE 3850.

The problem is the Inflation numbers (PCE & PCE CORE) are not breaking and the JOBS market remains very strong and consumer spending (leisure & services) is OUTPACING wage growth. We believe the PEAK inflation was hit in May-June but the significant down move alludes us. We listen to Powell. He said the 2 BIG mistakes they don’t want to make is NOT tightening enough AND easing too EARLY. They want to SLOW economic growth and so far have failed. They waited to see the “whites of their eyes” on inflation before reacting belatedly. We suspect they also wait for the “whites of their eyes” on economic slowdown.

Investors are plowing into VALUE over GROWTH. The funny thing is WE SAID to do that in AUGUST when our ratio turned as it had in Nov 2021 & May 2022…ALL were outstanding insights on portfolio weights.

WE explained since last year the place to be to STABILIZE portfolios in 2022 as the M2 money supply COLLAPSED bringing asset values DOWN was to ROLL short term Treasury Bills-this month=higher yields.

Ever heard of the Rule of 21?? It goes like this…you take 21 and subtract the inflation rate to get the P/E ratio. E.G. 21-8% inflation is a 13 P/E, 21-5% = 16 P/E. SPX 2023 earns 2.10 X 13 = 2730 or X 16 = 3360. We do NOT have a Earnings Recession yet but if we do the numbers could get sloppy. Time to Talk to Us!

We have ENCOURAGED investors–LEARN how to PROTECT portfolios from DECLINES & UPSIDE surprises

How Do Covered Calls work? What Sectors are Show Promise? How to Replace Stocks with Limited Risk? Will Natural Gas spike up this winter? Has Gold Silver Copper turned? Will Tech accelerate to Downside?Obviously more like 1. Our Opinion Reports 2. Our Indicators on YOUR Markets 3. A Fresh Look-Compare

Q4 could end with a stampede & a prelude to a tough 2023 or fade UNDER SPX 3850. Time to Talk to Us!

Look forward to speaking with you,

The Option Professor

REMEMBER All investing involves a risk of loss and it is not right for everyone. CONSULT YOUR BROKER & BROKERAGE FIRM to determine your own suitability and risk tolerance. Past performance us not indicative of future results. Information and opinions provided are for informational purposes only. It is NOT advice.

Stock Market-Fed Meets Next Week-Do You Know What Strategies To Consider? Read More!

October 28 2022 Option Professor Opinions & Observations

The Fed is scheduled to meet next week Nov 1-2; BUT we have much more on the docket coming up that could be market moving events. The JOBS report is due out Nov 4 (next Friday) and CPI also is as well be released soon (Nov 10). We follow that up with a Dec2 JOBS Report and another CPI report Dec which coincides with the Fed meeting Dec 13-14. We will not lack from these known events & pesky unknowns

The question is what strategies may come in handy for suitable traders to attempt to take advantage of what lies ahead. We at The Option Professor have ENCOURAGED investors to learn about a number of strategies which included premium writing like covered call writing and credit call spreads and credit put spreads Plus the combination of the two. We also have informed investors of buying call and put options and then legging into a debit spread in an attempt (under certain circumstances) to recover premium. We have also encouraged investors to learn about collars, married puts and replacement trades as ways to attempt to manage risk & therefore protect portfolio values. Higher Rates & Collapsing M2 are monsters

Do you need help with the timing some of these strategies OR a clearer explanation of their risks & uses?

Call Us at 702-873-8038…We Can Help….PDF Reports…OUR Technical Indicators…Review Your Markets-Your Tactics….Sometimes a Fresh Look Can Be Helpful…The Option Professor-OVER 35+yrs of Knowledge

Give It A Try!

Talk With You Soon

The Option Professor

Remember All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM-broker to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Information and opinions are provided for informational purposes only. It is NOT advice.

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