Jim Kenney
Author Archives: Jim Kenney
Jim Kenney
Option Professor-Stock Market- Q4-Do We Rally? Start Economic Slowdown? Read On!
October 8 2021 Option Professor Opinions & Observations
Welcome Back Everyone!
Well we had an enjoyable vacation to the Caribbean in the last weeks (Las Terrenas Dominican Republic) but before we left we told readers that unless we closed above SPX 4510 traders should avoid the market which was sage insight. We sent out an alert saying that the market should hold the SPX 4300 area and so far so good. Now we are chopping wood between the highs of SPX 4550 and the lows this week 4280. The good news is earnings are coming out and they may blow out on the upside (this week banks airline transportation companies). The bad news is that inflation also comes out and unless they lie the number may be scary. Higher costs can pinch margins ergo hurt earnings. The debt ceiling is a joke but it continues til December. Infrastructure is dead in the water as is tax hikes as we speak. We live in an obstructive political system now and there is no I in team. Charlie Munger gave the all clear in China hen he doubled his stake in BABA. We got the Atlanta Fed taking almost 50% off the GDP reading down to a 1%+ handle and core inflation is running the hottest in about 30 years! At the end of the day earnings and sales growth are expected to be strong for Q3 and still robust in Q4. The big question is what is the VALUATION for those numbers as inflation and higher interest rates (10yr hit 1.60%) may lower the P/E ratio and there goes dreamers thinking Q4 and the new highs. We are top of things so get the detailed report and ask your questions at [email protected]
Stock Market
The road to SPX 4600-4800 requires a move thru SPX 4450 and 4550 & so far no such move has occurred. If interest rates go higher say sayonara to the high flyers and some tech…if rates roll over sayonara to the cyclical and value trade. Not an easy spot…we have a detailed report so do yourself a favor and get it
Bond Market
We told you that our view is that 1.75% in March was a blow off (like Japan in 2011 & Germany in 2014) and despite this weeks action that high yield remains. TLT has deteriorated lower than we like (under 144) but still above March lows. Should we make new lows (exceed 1.75%) we will change our view otherwise we are looking at a gift this week. Get our detailed report and LEARN how we get INCOME
US Dollar/International Markets
The DXY (Dollar Index) has a ton of resistance around 95 and we told readers to beware of a turn DOWN in the US Dollar if unable to exceed that level. We are printing money and more to come and our debt ceiling explosion is getting big publicity. An economic slowdown may be problematic. The international markets had rallies in their downtrends…..get our detailed report to learn our take on all things intenational
Crude Oil Natural Gas
We were telling readers these markets were running long long ago. Get the detailed report to learn current opinion.
Gold Silver Copper Crypto
We think the precious metals may be on the verge of something big as well as copper. We told readers that the drop in Crypto in July was a gift….get the detailed report and learn what we see now!
Soybeans Sugar Coffee
We told readers LAST YEAR these were bull markets……now they pull back or consolidate. Get our detailed report now!
Remember There is risk in all investing and it is not right for everyone. Consult your brokerage firm/broker to determine your own suitability. Past performance is not indicative of future results. Information an opinions are for informational purposes only. It is NOT advice.
Option Professor- Stock Market-How Will We Know Correction is Over? Must Read!
September 24th 2021 Option Professor Opinions & Observations
Since our last report the market went into the tank and the rebounded back. We told readers that the market was very extended at SPX 4550 area and was trading way above its moving averages…reversion to the mean was pretty obvious. Option strategies like collars and replacement trades worked pretty well in many markets (FDX). As of this writing; the VIX remains above 20 and the SPX is under 3 resistance zones (4435 4480 4510) and the relative strength index is Under 50….so we would like to see closes above resistance, VIX under 18-19 and RSI above 50…when that happens we will have more confidence that the bullish prognostications for Q4 is materializing….until then it’s caveat emptor time.
Get our detailed report on what sectors will be best in Q4 at optionprofessor.com
Stock Market
The market got oversold while China was on holiday and the Evergrande “news” hit the tape. Of course China will get involved and the Fed says tapering will begin as well (less accommodation as expected). There are sectors that may shine and others that will not so go to optionprofessor.com and get the detailed report.
Bond Market
Interest rates remain relatively low and the spread between the 10yr 30yr to us seems kind of tight. We see TLT as having major support between 142-148 and if broken talk of higher interest rates will get more reasonable. Each week we update readers on the best ways to get INCOME so go to optionprofessor.com and get the detailed report.
US Dollar/International Markets
We have told readers that the US Dollar (DXY) bottomed at 88-90 months ago and we remain positive as our yield advantage and economy still is the place to be. Should we break 90-91 all bets are off-plenty of resistance at 95!! International markets corrected with the USA…China/Emerging Markets groping for a floor and turning point (October??) while Europe took a pause to refresh. The Pacific Rim (Australia-Japan-Korea) broke out then dipped.
Go to optionprofessor.com and LEARN how e get exposure to these regions
Crude Oil Natural Gas
We have told readers for the last month that Q4 could be the time to make hay in the energy markets and as of this report we stick with this view. Supply Demand dynamics support the thesis. Get the detailed report & our viewpoint!
Gold Silver Copper Crypto
These stores of value and industrial metal has been challenged lately but you warned of this months ago…will October start the turn in these markets? LEARN how we position in Gold Silver Copper & BitCoin-optionprofessor.com & go!
Soybeans Sugar Coffee
These three markets went thru the roof and seem to refuse to go down after relatively minor corrections.
Get our detailed report at optionprofessor.com!
Remember All investing involves risk and 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 for informational purpose only It is NOT advice.
Option Professor- Stock Market-Everyone Says Declines Temporary-Truth or Dare? Must Read!
September 17 2021 Option Professor Opinions & Observations
Greeting Everyone!
As we said last week the markets are deteriorating with almost 50% of small caps 20% under their highs mid caps 30% and large cap 15%…after 2001 peak they also went after the market sequentially. The value trade (Banks Industrials Materials ect) are deteriorating and if rates continue higher tech will fade even more (long duration earnings). The inflation n umbers were ok and retail sales surprised to the upside and this week we get a peek at earning for the homebuilders (LEN KBH) and transports (FDX) and retail (NKE)…not a bad smorgasbord. Here’s our view and we said this last week…the road to all these lofty levels the talking heads say (4600-4800 yearend) will not occur if we can’t take out S&P 4480 (we failed in that neighborhood this week) and 4510 and this weeks close hardly threatened those numbers at the end of the week. So far; it’s been a good time to keep your wallet in your pocket and not just blindly follow the green light blue skies crowd. We’re not Nostradamus or Kreskin so we follow the numbers and yes if we get choppy the numbers don’t work very well BUT if we are to trend higher we feel our numbers are germane.
You should get our detailed report and learn how we feel what positioning make sense for Q4 and beyond.
Stock Market
Again; we said that SPX 4480-4510 must get taken out if higher levels are to occur…. the Missouri motto (the show me state) seems to make sense here as we can blame the drop on triple witching but banks-industrials and materials were fading long before Friday. What sectors to play and to what weighting is the key to Q4 and we share our ideas on it.
Get our detailed report and gain insight on where we see the pitfalls ahead…or just roll dice and we wish U good luck.
Bond Market
Everyone is getting excite about a 1.37 1oyr and a Fed meeting on Sept 22 about tapering. We told you this is a joke as we feel the 1.75% 10 yr in Q1 was the taper tantrum and until proven otherwise we see any dip in bond prices as a steal particularly in tax frees…with the worldwide debt at these levels do you think central banks can raise rates much??
Get our detailed report and get an unbiased view on how to position on fixed INCOME….we believe we add value
US Dollar International Markets
We told you the US Dollar (DXY) bottomed in our 88-90 range in May June and the long side is the place to be…just a whiff of yields rising this week sent the greenback spiking to the upside…unless we take out 92-90..do you really want negative yielding currencies like (Euro & Yen) or how about the Yuan so they can impose currency controls on your $$? We like Mexico and Emerging Markets as they benefit from natural resource on one hand and are quite well sufficiently discounted in the latter to start positioning for the global recovery while Europe is on the verge of potential breakout!
Get our detailed report on currencies & international investing….also Japan Korea & Australia where vaccinations rising!
Crude Oil Natural Gas
We told you for week that ENERGY may be the place to be in Q4 and despite a late week dip we seem to be correct. It’s a volatile animal but we have levels on XLE XOP & OIH plus their components we share. Nat Gas is up big time as well.
Get our detailed report and learn where we see the big opportunities in Q4 in this sector and the cut and run levels.
Gold Silver Copper Crypto
We told traders to stay out of Gold & Silver until sustained strength ABOVE key MA’s…so far absolutely correct. Copper prices have been strong but FCX has faded big time…someone’s wrong here…and we told you crypto bottomed in July in both (GBTC ETHE) which again we stand by unless taken out although last week we did say a correction in the cards.
Get our detailed report and gain our insight into these tangible assets/stores of value and new frontiers.
Soybeans-Sugar-Coffee
The agricultural markets are still consolidating and some say bottlenecks and supply demand dynamics (like oil) bode very well that any drop is a pause to refresh…there is a one stop shop for commodities that we share with readers.
Get our detailed report and learn more about this exciting sector
Remember All investing involves risk and it is not right for everyone. Consult your brokerage firm/broker/advisor to determine your own suitability. Past performance is not indicative of future results. Information and opinions provided for informational purposes only. It is NOT advice.
Option Professor-S&P 4650 by EOM or Deterioration to Downside Acceleration? Must Read!
September 10 2021 Option Professor Observations & Opinions
Greetings Everyone!
This is the tug of war we are now now involved with in the first 2 weeks of September…..is this a 2 week dip before a big up move going into end of Q3 OR are we deteriorating our short term graphs and will test longer term MA’s? The inflation numbers came out and they are very high and much of it may stick. The talk of higher taxes has not been factored into prices nor has tapering in our view. China is tired of being lectured to by the USA as they see we have our own problems plus at $17 Trillion to our $22 Trillion…they no longer are the little kid on the block. Will they brings ships toward Guam-Japan-Philippines and cause havoc in the South China Seas & Taiwan??…Who knows-Who’s Ready? Our view is the biggest risk to the market is VALUATION in that Barron’s had a chart last week showing the differential between the 10yr Treasury yield and the P/E ratio on the S&P 500. The chart went back decades and the spread between the 2 in our summation had never been wider….we surmise that the spread will tighten and with little appetite to raise rates the logical conclusion is that P/E’s will decline. An analyst at Citi noted a few weeks back that a normal P/E with inflation running even at 3%+ would be 18 so at 200 X 18 =3600 and even 240X18=4320…just basic math. We saw today how any news can cause a sizeable reaction when AAPL got hit regarding the app store and the stock is about 10 bucks off the highs…no big deal but if 158 is not taken out by EOM and we turn lower in October it may be. Speaking for October….it has been a tricky month so if we do run up to SPX 4650 by EOM Sept…it may be wise to look to sell calls/buy puts into that stampede as the risk reward at that point may be a bit dodgy. Our monthly graphs gave us a sell at SPX 4540 and went home accelerating to the downside…our yearly graphs have support at SPX 4450..close!!
Get our detailed report and LEARN exactly what we see as opportunities right now and where are the pitfalls!!
Stock Market
Briefly: the market rolled over a bit (5 days down worst since June) and now is testing longer term moving averages. What sectors look best to us & how can you protect yourself against declines…GET THE DETAILED REPORT!
Bond Market
The ECB hinted at tapering and the Fed will announce the same on Sept 22 after an inflation report that is scary and sticky. Nothing dramatic but if they don’t stocks may fly and yields may turn-the Dollar drops and commodities roar. Remember Powell & Mnuchin were private equity guys who are no stranger to leverage & now we are 130% of GDP!! We explain how we tackle INCOME in our detailed report…Get it This Week!
US Dollar/International Markets
The Dollar is losing altitude after a nice rally…we have a view on what’s next plus Asia Pacific & EM is coming on now and we have views on that as well….Get the detailed report and gain our perspective–Get the Detailed Report
Crude Oil Natural Gas
The ENERGY markets are at a juncture that is potentially very exciting. Some say we are headed toward 80 Crude in Q4 (weeks away) and if they are correct lots of volatility ahead (but China did release reserves) & Nat Gas is zooming lately. GET Our Detailed Report and Learn where we see the opportunities!
Gold Silver Copper Crypto
Our view has been traders should avoid the precious metals until they close and maintain above the LT 1 yr MA’s. Since that has not happened no rush here. Our view since July was that BitCoin & ETHE bottomed and so far that is accurate
Get our detailed report to LEARN when and where we see opportunities in the aforementioned stores of value.
Soybeans-Sugar_Coffee
Our view was bullish over a year ago in all 3 markets and we have been cool to them in that last few months. We are in the process of determining whether the bulls are gone here or more to come in Q4…Get our Detailed Report!
Remember All investing involves risk and it is not right for everyone. Consult your brokerage firm/broker/advisor to determine your own suitability. Past performance is not indicative of futures results. Information and opinions provided are for informational purposes only It is NOT advice.
Option Professor-Stock Market-How Will the Market Trade After Labor Day? Read It!
September 3 2021 Option Professor Opinions & Observations
Hello Everyone!
Since we have over all been rising sharply for months; we all await a potential correction. Will interest rates stay low and tech/high valuations will see money flow or will rates creep up pushing value (financial ect) get juiced up. Will energy market finally take off followed Gold Silver and Crypto? Will China & European stocks take off into EOY? As you can see there are lots of questions ahead…get our detailed PDF report to learn our views on what’s ahead.
Option Professor-Stocks-Do the Trees Really Grow to the Sky?? Must Read!
August 26 2021 Option Professor Opinions & Observations
Hello Everyone!
This headline is a question we must start asking ourselves because we haven’t seen a 5% dip and certainly nothing sustainable to the downside in many many months. The perfect storm is made of great earnings and operating leverage (leaner meaner companies) and ridiculous artificial interest rates (Fed buys 120 Billion with a 6% GDP-4500 S&P??). Who knows how long this could go but the next round of where consumers will get cash for spending will probably be refis on the 20-30%+ jump in their homes plus the jump in their portfolios and savings build up from being unable to spend on dining and travel like they used to do. These bottlenecks are creating a huge backlog in orders so the futures seems awfully bright. Palantir just bought $50 million in Gold for what we read was a potential Black Swan event…..since everyone is drunk at the stock market/real estate party…..what are the sober guys thinking? Some of our guesses on unknown unknowns (Grumsfeld) are that valuations could contract as with a 3% inflation rate the P/E norm is 18. The fighting in Washington and Biden’s popularity-health are risks. All SPX target have been raised some by 1000 S&P points. The distance between current SPX and our 1-2-3 YR LT moving averages are huge. Investors are all blue skies and green lights and the sideline cash is beginning to come in and may stampede after Sept 15th as we close out Q3. The Monetary base is up 9X in the last 10 yrs and has doubled in one….Fed balance sheet is way over 8 Trillion and on its way to 10 Trillion unless the taper and therein is another risk. Earnings comparisons next year will be against this pent up demand period and become tougher. We always say don’t fight the tap and don’t fight the Fed BUT if the Fed CHANGES course and throws in the towel on fighting unemployment (10 million job openings!) mand go after price stability (the other mandate)….then the road in 2022 may have far more pothole than anyone anticipates.
We have certain sectors and hedging strategies and asset allocation models we like for the year end & 2022.. submit your email to get the detailed report.
Stock Market
Yields rose a bit this week which sent investors looking at financials industrials value and a catch up trade in small caps and transports. We will see how the weeks ahead unfold but get our detailed report and w will share our views. A rising tide lifts all boats until the tides change so learn how your umbrella (risk reduction when appropriate) while sun rules.
Bond Market
This week made the 1.12% 1o yr Treasury seem like a long ago time. We still feel that until 1.75% is exceeded it remains early to jump on the we’re going to 2%+ bandwagon. Get our detailed report on how we tackle the income dilemma
US Dollar/International Markets
We told readers that the DXY bottomed in the 88-90 range when most people said the dollar was dead. Now the 50-200 day moving average is 92.50 and 90.86 so the trend is up and the Fed may help things further. We said European stocks were the next game in town 6 months ago and they have improved (their banks are dirt cheap vs USA valuations)….Asian Pacific had the bloom taken off the rose…and EM has been challenged with China’s new policies. We see a major turn coming in international stocks..get our detailed report sooner rather than later.
Crude Oil Natural Gas
We got a big rally during the week in energy markets but now can they hold water as many of the moving averages are inverted and pointing down….we were very keen on energy and the stocks are much better run with free cash flow. We will be updating our take and our positioning in the detailed report..so get it as Q4 could get wild. Can we get to 80??
Gold Silver Platinum Copper Crypto
We told traders to stay away from precious metals until they get above the 1 yr MA on our LT charts and so far that has been a good call. Copper is the new oil and we had suggested FCX around 1 before its run to 45 but China is a factor on all these commodities and it seems they are still trying to stabilize prices…FCX takes out 38-40..game on otherwise? We told everyone GBTC & ETHE bottomed in July and may run like a deer going into year end. Get our detailed report!
Soybeans Sugar Coffee
The are known as ags & softs and we were raging bulls last year but not after parabolic moves…they may just be consolidating but crop reports and weather change will be huge..stay informed with our detailed reports!
Remember All investing involves risk and it is not for everyone. Consult your brokerage firm/broker /advisor to determine your own suitability. Past performance is not indicative of future results. Information and opinions are provided for informational purpose only. It is NOT advice.
Option Professor-Stocks- Choppy August Leads to Sept Boom or Bust? Must Read
Hello Everyone!
Well this week was another wild ride as we saw a couple of good overnight sell offs in SPX followed by big moves on the upside. How do you know when a market is choppy? One way is to see how many times short term moving averages have been violated and in August we have seen plenty. We closed the week very strong with a combination of short covering and bargain hunting. What will we see ahead? Good question…..here’s our view….the retail sales number stunk up the joint but the year over year numbers are strong with Mastercard reporting great use of credit cards. BOOM–Consumer is 2/3 of GDP so household balance sheets and sideline cash does bode well for the market. After Sept 15th; hopefully Delta will have peaked and rolled over, geo-political angst will subside, and Q3 earnings will come into focus and with GDP expected at 6% one would imagine the numbers will be supportive…..that’s the bull case. BUST–The bear case is that Delta doesn’t roll over, the 20th anniversary of Sept 11 is problematic, the consumer really is pulling back & ports closed-supply chains bottlenecks affect earnings. The 10 day/20 day moving averages on S&P we follow are at 4436 and 4420 and both were violated but the market closed above both on Friday. The Relative Strength we look at is still well above 50 which is positive. We had a July low at 4224 and now an August low of 4347 so that is our new line in the sand for sustained weakness. The ports and other factors have hurt the Dow Transports (topped in May) and the Russell had a big day on Friday and this week we will see if it was just a dead cat bounce. The energy market and some commodities have lost their steam and the Semis (SMH) still are well off recent highs and sometimes lead weakness in the overall market so being aware of hedging tactics should traders feel the need is still a reasonable idea. In 13F filings; it appeared technology, communications and financials were 3 favorites of the big boys.
Get our detailed report by submitting your email
Stock Market
As we said; the earnings keep rolling in and being very supportive. We will see if we build on Friday’s strong close as we hear about tapering all week. Our view is we are a long way away from hikes and until 1.75% gets taken out all this talk of 2% is beer talk as we have averaged only about 2% since GFC. Yes interest rates are like gravity to stock price and so valuations have run amuck BUT with inflation rates where we are….P/E’s should be around 18 not the 23 so contraction (like AMZN) of P/E’s may be the dagger that kills or staggers the bull ultimately. Consensus is that after 9-15 we could get a big run into year end and they certainly have a lot of evidence that they may be correct but you always have to be careful when the boat gets a bit one sided….we share ideas in our detailed report
Bond Market
This week Jackson Hole as the Fed frolics in Wyoming (it’s a real getaway:)….no hike any time soon and maybe tapering but at 120 BILL a month…does it matter? All the ideas we have on creating income have done their jobs since the March tantrum which we believe was the tantrum everyone is still looking for today. Short need to cover and supply is light so if we ever get up to 1.50% or 1.75%…maybe a steal..ask Japan who had 1.75% in 2011 and Germany in 2014?? get our detailed report
US Dollar/ International Markets
We told everyone the DXY bottomed at 88-90 and we have been bullish ever since that time. The ECB is mile away from tightening and the Japanese are light years away. Do you want the Yuan? We said Europe was good 6 months ago and now we saw enough is enough on emerging markets…start nibbling before Feb 22 Olympics in Beijing and don’t forget India who has tremendous demographics looking ahead..get our detailed report
Crude Oil Natural Gas
We told you Crude broke when it got under 70-72 and this week it lost a lot of ground. The trend is down so it’s tough to catch a falling knife…if you do we would use short term lows and short term moving averages as cut outs. Natural Gas prices have rolled but may find some support at 3.75 area which were the lows this week. get our detailed report
Gold Silver Platinum Copper Crypto
We said traders stay away from metals until they get above their 1 year long term moving averages and so far that has been the way to go though next week could be an important one if strength comes in significantly. Copper rolls over as China slows down which is probably the reason for overall commodity weakness. We said GBTC & ETHE bottomed last month and we stick with our call…get our detailed report.
Soybeans Sugar Coffee
All 3 markets were suggested to readers last year at much much lower prices so our interest now is very low as they struggle to maintain their parabolic prices and in some cases appear to be rolling over…get our detailed report
Remember All investing involves risk of loss and it is not right for everyone. Consult your brokerage firm/broker/ advisor to determine your own suitability. Past performance is not indicative of future results. Information and opinions provided are for informational purposes only. It is NOT advice.
Option Professor-Stocks-Semis Correction Canary?-No U.S. Oil?-Value vs Growth-VIX? Must Read!
August 13 2021 Option Professor Opinions & Observations
Greetings Everyone!…We are in the dog days of summer and many people are asleep at the wheel as the stock market trades in one of the tightest trading ranges in a long time and the VIX has meandered toward 15. Covid-Delta on the news sounds bad but top tier analysts insist that the IHME & Dr. Gottlieb say the Delta variant is peaking and about to roll over like in the UK & India. They say we will get a sigh of relief and the market will take off on the upside. The semiconductor index may be telling a different story as since last week we dropped from about 272 to 258. Top 10 holdings include NVDA TSM AMD QCOM AVGO MU ect…….and some say that a rollover in SMH if sustained could portend a decline in SPX….they call it a Correction Canary not unlike the old canary in the coal mine which was sent in to detect harmful gases BEFORE they hurt humans…..we’ll see. Also; the market has been trading in a really tight range with a contracting VIX and it seems a blow off to the upside may be in order with a collapse in the VIX or volatility may spike and a unforeseen correction commences. Some believe it may be quiet until Sept 15 when the focus will go to Q3 earnings….but with consumer confidence down 13.5%…worst in a decade…who knows? This week is retail heaven with earnings from TGT HD LOW KSS FL TJX M and others so we’ll see if the apparel explosion is subsiding. Inflation is off the rails…used cars..gas..housing…shipping costs…wages…CPI>>PPI>>>PCE. Oil prices have backed off a bit a we plea with OPEC (Saudis & Russia ect) to boost output which is ironic as USA oil production off 2 million barrels and now we must ask foreign producers to play nice while we tout our plans to go 50%+ electric by 2030. Would you give away your oil or stick it to them? The Growth vs Value Ratio may be rolling over IF the 10 yr Treasury did bottom last week at about 1.12% (Closed this week at 1.30%). The ratio hit about 1.33 last year (high number) and rolled over and we caught the big rally in value stocks while tech stumbled (Banks-materials-industrials-energy ect.)….then we went to 1.22 ratio and saw a roll over in value between April thru July as rates dropped and tech caught up. NOW we may be seeing a rally in value as we turn off 1.33 ratio and if we take out 1.22 (correction low) value could accelerate to the upside (value tends to pay dividends to yield hungry surrender investors. There is a resolution coming to the low VIX and the tight trading range. Will September bring a huge rally as Delta fades or will we start discounting consumer slowdown and economic contraction from these Goldilocks comparisons (Southwest & ABNB warns of slowdowns).
We let our readers know exactly what we think is the best preparation for what lies ahead…submit your email
Stock Market
Not much going on in late summer although some stocks are slipping..we need to see how NVDA & CSCO earnings go this week along with the aforementioned.
Option Professor-Weekly Update-Stocks-Next 2 Weeks Will Tell the Tale-Must Read!
August 6 2021 Option Professor Opinions & Observations
Greetings Everyone!
We got a great jobs report and better yet we got great revisions on last month as well. BOTTOM LINE-we got about a million jobs back in each of the last 3 months and wages are going up at about 4% plus participation rate is steady. The consumer is out running up debt (RECORD $15 trillion) mostly on houses-cars-credit cards. We still have about $16 Trillion in negative yielding debt and real yields are negative here big time. BOTTOM LINE- the Bond Market is a joke as far as value which makes stock valuations less of a joke. T.I.N.A. (there is no alternative for your money) reigns supreme so new highs we continue to make. Where’s the new highs on the Transports (peaked in May) or the Russell (peaked in March w/10yr Bonds)? We always say don’t fight the tape and we don’t so we love new highs in the SPX…but we’re not stupid…we keep our eyes out for warning signs….that would be drops BELOW SPX 4225 (July lows) and a warning with a drop BELOW SPX 4360 around this weeks lows. Households have tons of money to spend and household balance sheets are screaming wit real estate & stock portfolios zooming. Now here’s the important thing….did Friday tip us off on a asset allocation acceleration? Are we fading tech a bit and buying the banks (big & regional) industrials energy value & dividend payers as the yield curve steepened after the jobs report? Industrials metals had a good week too! These next few weeks before the Fed meets in Jackson Hole are key as if we take out the lows we mentioned then an unforeseen correction may arrive OR as some suggest there is a lot of reasons to see RISK ON and a stampede ahead! Of course as we speak; there is no evidence of a correction and those who live by crystal balls are destined to eat ground glass BUT our 1yr 2yr 3 yr moving averages on the LT chart are SPX 3915-3500-3271 way BELOW SPX 4400+. We have stayed bullish the entire way since we told readers LAST YEAR that OPERATING LEVERAGE created by companies with less employees and offices would lead to super profits. We saw a valuation compression happening to the high flyers and the Value over Growth 9 months ago…..but if a fire breaks out…our readers will not be uninformed.
Here is a quick overview of all the basic sectors…to get our detailed selections in each area……simply provide an email
Stock Market
New highs in the SPX after the jobs report put the July potential top out the window although Fridays action on the Nasdaq SPX Transports Russell were hardly earth shattering….that’s why we say let’s see how the follow through looks. Wild trading in Robin Hood made and cost investors plenty. Using a simple moving average on the 1-day 5 day gave great signals. Implied Volatility came way in on Friday. It looks like the yield curve may be steepening so we loaded up with banks bi & regional and we think industrial metals (FCX X) plus energy could get going with a bit of follow thru if not it’s no sale. We have a car company we love and a payments company to boot. We have a list of new ideas and option ideas in the detailed report so you should check it out. Next week we have 9 stocks announcing earnings so if you want to know who they are and what stocks might move…provide your email.
Bond Market
The Treasury 10yr went down to about 1.12% this week and snapped back toward 1.30% by weeks end. Rates are pretty volatile which may suggest the winds of change are about to blow. The world has gone mad as junk bonds provide little extra yield for the risk involved. With GDP at 6.5%+; a Treasury paying 1.29% is a guaranteed loser after inflation. The only thing that would make sense is if stocks drop as they did after Bonds rallied into early 2020 despite a strong economy…seems if smart money knew a pandemic was coming.. what do they know now? We suggest short term corporates and tax frees as a core with preferreds, senior loans high yield EM debt to spice up yields at we feel reasonable risk. Rates should be rising and the fact that they are not suggests the risk that a hit to the head is coming. We share our ideas on getting INCOME via debt & Dividend Payers….supply your email & learn more!
US Dollar & International Markets
We called the US Dollar peak in the 100-104 area and the lows at 88-90….since then we have been clear that tyhe 90 area is support and maybe there is an outside chance to rally toward 94-96 otherwise it’s stuck in the mud. Should our rates drift higher an we need to compete against a EURO that has a dodgy ECB & possible covid problems or a Yen that has negative rates or China’s Yuan where they change the rules constantly…the Dollar looks pretty good. International markets are unfolding just as we forecast as European stocks have been rising in the last month while Asia/EM have been slipping and need more time to vaccinate (Japan Korea AUS way behind). China’s changing the tax status of Baba & others so beware but our trade deficit is going somewhere…remember the end game is global boom. We tell you exactly where to go for international exposure…get the detailed report today!
Crude Oil Natural Gas
Crude oil took a tumble but the stocks got a lift. Maybe it’s time the gap closes. Demand is good in the USA but maybe China & Japan not so much. Some oil companies are announcing monster earnings and not putting $$ into exploration. We got ideas in both the drillers and refiners & E&P crowd so get our focus list and don’t miss out Natural Gas right back thru the roof (we told readers to get bullish at 2.50 now above 4!) Lots of ideas available to you!
Gold Silver Platinum Copper Crypto
Here’s where we shine as we told you for 2 weeks that the 1yr moving average was above the markets in Gold & Silver so traders should be out (or short as we did with 10 contracts in our Collective account which trades you can get access to) and on Friday Kaching we got a tank in both metals. Copper is still the new oil and we have 2 stocks we love in that industrial group. We told EVERYONE that the LOWS ARE IN on both Ethereum & BitCoin 3 weeks ago and now we got an up move…what’s next in these markets??…get the detailed report!
Soybeans Sugar Coffee
Soybeans are hanging on for dear life after peaking awhile back..we told readers to get bullish last year at 8 to 10 BEFORE it went thru the roof on eather & China demand. Sugar and Coffee still have legs but nowhere near the bargain when we told people to hook up at 12.50 Sugar/100 Coffee..what’s next..get the detailed report!
Remember All investing involves risk and it is not right for everyone. Consult your brokerage firm/broker/advisor to determine your own suitability. Past performance is not indicative of future results. Information and opinions are for informational purpose only . It is NOT advice.
Option Professor-Stocks-Crunch Time-AMZN Breaks 3500-ST SPX Top? Read On!
July 23 2021 Option Professor Opinions & Observations
Good Day Everyone…..Another wild week with Tech Earnings on balance very impressive BUT from AMZN & PINS to GOOG-MSFT-AAPL-SBUX-JPM-UPS and others had a bit of a fade going into the weekend. Online retailers really got hit. AMZN lost OVER 10% in the last couple weeks which is a lot for a almost $2 Trillion dollar company. GDP was short and housing & the consumer sentiment seems to be leveling off and masks are gain part of the wardrobe. Inflation is running at the fastest pace since 1991 and the Fed appears light years from tightening. Small caps are underwhelming versus big caps and sectors like consumer disc-social media (FB)-communications-energy-leisure-re-open are off highs We have a theory we have been monitoring that goes like this….when Treasury yields peak within 2-4 months the stock market peaks. In March; we had the peak in Treasury 10yr yields at about 1.75%…..In May (2 months later) the Dow Jones Transports peaked (had fallen almost 2,000 points)….we are now finished with July (4 months) and we hit a high of about SPX 4430 this week. The easy lifting may have been done (comps to last years shut down/Fed accommodation -Fiscal Stimulus-pent up demand)….with the future more difficult. Another point….look at Treasury yields leading up to the March crash (Nov 2019 thru Feb 2020)….you will see they were headed lower during a strong economy from the same place we started our yield drop since March despite a steroid economy….why??.do stocks turn down in Aug-Oct? We always say that long term trends remain up and don’t fight the Fed nor the tape! However; masks are back in the conversation and this sell off in stocks after great earnings is concerning. CONCLUSION…Some respected analysts were looking for a stampede INTO stocks this week and next…..they may very well be correct BUT AUGUST may hold the keys to the castle….we have a GAP on SPX between about 4410 and 4420…..if we go toward that area and turn down to take out SPX 4350 and last months lows at 4225 area….the exits could get crowded….be aware of tactics like trimming, collars, married puts, covered calls and replacement trades just in case…AMZN investors wish they had.
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Stock Market
Rates are low (like Buffett says they’re like gravity to stock prices and right now not much gravity). This week looks like a pull back and buying opportunity as long as we get good price action next week. The same song and dance in that valuations are high-prices are well above their mean risking reversion-and the Fed never met a dollar it wouldn’t print. The drop in AMZN was unsettling but that 3300 area has some long term averages at that level maybe a buy set up. Next week we get a slew more earnings but you figure they should be good…more sell the fact?? Everyone is bullish and positioning seems ultra long so be aware of your parameters and go some if you haven’t got any….as we saw with AMZN…a little late to look for hoses when a fire breaks out. The value trade (financials-industrials-materials-energy) is supposed to finish the year strong so keep an eye out while back to school (hopefully) will be on time. Most big brokerage firms and bulls think the VARIANT RISK is not a problem but I’d rather check the numbers to verify that view. Do we blow out the highs this week? Nowhere else for $$ to go….AMZN proves sometimes it goes back in the pocket:):
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Bond Market
Treasury yields just seem to be unable & unwilling to rise. We told everyone that March was the taper tantrum and until taken out buy all the Bonds you want…so far so good. We follow preferreds, senior loans, emerging market sovereign debt, high yield. munis, short term IG corporates and DIVIDEND payers…want income? we can help inform
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US Dollar/International Markets
We told everyone the US Dollar (DXY) peaked last year near 103 and bottomed near 89….it has been range bound between about 89-93 most of this year….not too exciting. The yen is benefiting from our consumer but has vaccine problems and Europe is just now trying to reopen to salvage the August tourist business….we’ll see if the pull it off. Inflation is a worldwide issue so we will see how fiat currency does in the months ahead…we suspect the world will be looking for a non-sovereign store of wealth in the not too distant future. China has been the big story and as we told everyone it has not been worth the political risk. They seem to be targeting the super wealthy rich guys companies (one guy lost $15 B when his education company lost 98% of value). We are looking for some type of low in the next 30-90 days which is not coincidental as our feelings on all of this disruptive news is happening now so as we get closer to year end (only 4 months) & the Bejing Olympics Feb 2022….the house will be in order & they will greet their guests. Emerging markets like Mexico & Brazil are trying to improve and Europe & Asia banks can return to dividends. Long term trends are up across the board but if the variants take over…all bets are off…we share our insights on each week
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Crude Oil Natural Gas
This area has many confused as the price of crude oil has been firm close to its 52 week high while the shares are way below…..will that change? There are some sharp traders who still believe we close out the year with a bang as a mean game of catch up may be in front of us as CHV just announced over a $4 Bill profit in Q2 with tons of money to return to shareholders….subscribers will learn our picks soon. Tight supplies, no cap ex spending should mean brighter days. Natural Gas got hit this week and may be due for a correction likewise LNG as we got bullish on these many months ago. Join us and take advantage on where and when we see opportunities soon.
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Gold Silver Platinum Copper Crypto
We told everyone in March that those prices were your buy in and now we tell them that we are using out long term charts 12 SMA to give us a buy signal for Gold Silver & Platinum….so traders should NOT be in there just yet. Ditto the mining shares but we monitor closely as sometimes late summer/labor day is the turning point FCX in copper is well thought of but we see the industrial metals had a great week (CLF & X). We told everyone that we believe the lows ib Bitcoin & Ethereum may be in and if these gurus are half right the next 4 months could bet wild…Get our Newletter!
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Soybeans Sugar Coffee
You heard of live by the sword and die by the sword?…well Coffee traders have a new one called Live by the Frost Die by the Frost as Coffee prices went up 45+ points ($17 Grand a contract) on Frost fears and just had it’d worst decline since 2008 when they abated…Ouch!…Playing parabolic markets tend to end badly. After drought comes rain as Beans topped in May & June and have been sliding since with some consolidation. We told readers to get bullish last year at 8 or 9 a bushel as China buying was evident. Sugar may also be due for a correction as it also has gone up huge since we told readers to get bullish at 12.50…..there is a one stop shop commodity fund that we respect…join us and learn!
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Remember All investing involves risk and it is not right for everyone. Consult your brokerage firm/broker/advisor to determine your own suitability. Past performance is not indicative of future results. Opinions and observations are for informational purpose only. It is NOT advice.