2016 Blog Archive
2016 Comes to a Close
29 Dec 2016
This is our last blog posting for 2016. The markets slipped a little in the last few days of the year. As we had posted earlier we expected this as large portfolios were rebalanced with managers moving out of stocks and into bond positions. Overall our technical indicators are showing a good rally at the start of next year very possible. We had an outstanding year in terms of performance – not as good by far as the previous two years – but still stellar in comparison to other options. We end the year with a number of open alerts to include XOM and MS. We believe that both have the opportunity to turn profitable with the most concern surrounding XOM. We may have to exit this with a loss, not a good way to start off the year. We want to wish everyone a Happy New Year and we are looking forward to a great 2017.
End of Year Rebalancing
27 Dec 2016
At the end of the year large portfolio managers, we are talking tens of millions to billions of dollars, will have to rebalance the bond equity ratios since the S&P 500 up more than 3% this month and 5% this quarter. This could be the largest stock sale on record! Pension funds that have to do monthly and quarterly rebalancing may wind up selling $38 billion of stocks to get to their funds advertised allocations (balance) by year end. This could signal a buying opportunity on the dip. The stock market has enjoyed a modest post-holiday advance, which was paced by the Nasdaq hitting a new record high today. The majority of stock action happened in the opening minutes if we examine the hourly volume. Market participation was very limited with fewer than 600M shares traded on the NYSE. NVIDIA (NVDA) soared 6.9%, extending its 2016 gain to 256.0%. Crude oil, jumped 1.7% to $53.89/bbl. Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while November Pending Home Sales will be reported at 10:00 ET.
DOW 20,000 – Is it a Head Fake?
10 Dec 2016
All the talk has been about the Trump Rally and DOW 20,000. It came within 13 points today of 20,000. If you look back at some of our older blogs we have been predicting a major pullback starting sometime in January. After the impressive run up we are watching closely so we can get the alert out. What is the significance of DOW 20,000 and will it create a false or undeserved sense of continued growth in the markets? We have to remember that the DOW benchmark only represents 30 stocks of the thousands that make up the broader equity market. Also, with the Fed signaling a number of rate hikes in 2017 has that help the DOW close in on 20,000? We also need to pay attention to the fact that Goldman Sachs (GS) is benefiting from the assumption of future hikes and it represents 8.23% of the index! That is a significant amount in fact the highest of the 30. So is DOW 20,000 a real indicator of the economy? We are convinced that a significant market correction is on the horizon. Our current alert on XOM was up at one point over 30% today but dropped back. We are still holding on and expect that we will see our alert on XOM provide a return of over 100%.
Valuations - by Rick B.
12 Dec 2016
The SPX is 45% undervalued per our proprietary models. The energy sector is 95% undervalued. Energy stocks have outperformed the market by a wide margin this year and we expect this to happen in 2017 as well.
The seminal event this week is the Federal Reserve meeting on Tuesday/Wednesday. We think there is a 90% probability the Fed will raise rates a quarter point. Markets are soft Monday and we expect a slight SPX decline into the Wednesday announcement as uncertainty rules. Once the announcement is made and uncertainty lifted we anticipate the market will rally into the end of year. The fact that December options expirations week is favorable for the SPX we are confident the market will rise. The Christmas Rally should be more robust this year than average given the positive corporate earnings, GDP and growing confidence in the new administration.
Blue skies are on the horizon long-term . Earnings are the mother’s milk of the stock market. 2016 SPX earning will grow a weak 1% on 2016. 2017 SPX earnings growth is estimated to be 11%. If this occurs expect only minor dips and the Bull market will remain in tack. If the new administration is successful at removing regulations that are holding back business growth, lowering taxes and creating a fiscal stimulus program SPX earnings could increase 13-15% in 2017 and this would ignite a significant rally.
So Long to 2016 - Hello 2017
3 Dec 2016
As we enter the last month of 2016 we are not sorry to see it go. It was a year of uncertainty and lots of volatility. We’ve experienced BREXIT, a presidential election, oil prices controlling the market, Yellen and the Feds threat of raising interest rates and a host of geopolitical issues that move the markets. We are disappointed that we did not have the stellar year that we experienced in 2014 and 2015 and we are EXTREMLY PLEASED to have beat hands down most other (if not all) other services with a current return of over 400% and with luck by the end of the year over 500%. We have worked hard to get listed with TD Ameritrade and Think or Swim and that is still an ongoing project. We’ve also expanded staff and worked very hard on identifying and developing technical indicators to achieve the gains we experienced in 2014 and 2015 – we want to break 1,000% for our subscribers in 2017. The big questions for December evolve around the following. Was the Trump Rally too fast too far and will that inhibit the Christmas Rally as it has been called. Second, everyone is in agreement that the Fed will raise interest rates this month. If they do is that already baked into the markets or will the markets react adversely? If they don’t, will the markets pullback in disappointment? We ask this – Was it a Trump Rally or was this latest rally due to the spike in oil after OPEC agreeing to cut production. We think it was oil! So as 2016 moves behind us we look forward to 2017.
Longest Winning Streak in 20 Years
28 Nov 2016
The Russell 2000 lost ground today snapping its longest winning streak in 20 years. It had index had rose for 15 consecutive trading sessions. Indexes in both Europe and the U.S. were weighed down by falling bank stocks, which have been big winners since the election. Many investors are anticipating a rate hike in December. Markets may also be on edge awaiting the results of this weeks OPEC meeting to see if oil production is reduced. Shares of oil and gas companies struggled Monday as prices swung ahead of this meeting of major oil producers in Vienna. The Organization of the Petroleum Exporting Countries agreed in September to trim production amid a global glut of supply, but left the details of who cuts how much to a meeting in Vienna on Wednesday. “Speculation that OPEC would agree to production cuts spurred big increases last week, and we’ll get this kind of back and forth until we get clarity on what exactly the deal is likely to be,” said Ian Williams, strategist at brokerage Peel Hunt.
Oil Moving on Up – Pulls up Markets to Record Highs
21 Nov 2016
Renewed optimism for an OPEC deal to reduce output has push crude oil 4% higher in today's trading and has given a big boost to energy shares and the rest of the stock market. The WTIC Light Crude oil rose above its 50-day average for the first time in three weeks after recently finding support near its 200-day moving average. The three major indexes closed at record highs simultaneously for the first time since this past summer. The S&P 500 topped its all-time intraday high of 2,193.81, the Dow rose around 88 points, surpassing previous closing and intraday record of18,934.05 and the Russell 2000 and S&P Mid Cap 400 also hit new record highs. WHY? Oil, did we say oil? If OPEC does reach a deal we could see higher highs but if it does not we will probably see a pullback.
S&P Drops for 9 Days Straight – Volatility Jumps
05 Nov 2016
The markets are experiencing a significant sift since the FBI announced it was re-starting the investigation of Hillary Clinton’s email server and her usage. The CBOE Chicago Board Options Exchange Volatility Index, or VIX, has risen to 22.1 from 15.4 before the FBI news came. If we examine the historical years of a presidential election there is generally a downtrend followed by a solid move up for the remainder of the year. The VIX measures investor expectations of future S&P volatility. The correlation between the VIX and the S&P 500’s daily price swings over the past 30 trading days—what’s known as realized volatility—tends to be strong. The S&P 500 Index dropped for a ninth straight day, a gauge of equity volatility had the longest stretch of gains on record and Treasuries climbed the most since September ahead of next week’s vote. All the jitters sent the dollar down after a brief advance that followed data showing U.S. jobs rose at a steady pace in October, supporting a Federal Reserve hike next month. Oil sank as hopes faded that OPEC will be able to implement a deal to cut output.
Trump Leads in the Polls – VIX Spikes
1 Nov 2016
Trump is leading in a number of polls to include the Washington Post and that has the markets worried. The CBOE volatility index moved up significantly and that sent the markets down. Gold was a winner and oil fluctuated. We were stopped out of our SPY position at $1.84 a loss on that alert of 33%. This seems to be a crazy week with three events working the market over. Those three events are the uncertainty around the presidential election, the Fed releases minutes tomorrow at 2pm and will there be a rate hike and lastly the release this Friday of the jobs numbers at 0830am. All these factors have the market in turmoil. Stay tuned as we are entering a historically good up period for the markets.
Dow Slides Friday on FBI Email Probe
30 Oct 2016
This was the headline in many places – we think that everyone that reported the market dropped due to the FBI probe of Clinton’s emails is WRONG! As everyone is aware as oil moves (for many months now) so goes the markets. At about 11am Friday oil turned down and continued to selloff the rest of the day. That selloff pulled the markets down. The news on Hillary was not until about 1:30pm and the markets had already started down. On Friday, GDP, the broadest measure of U.S. output, was reported at 2.9% for the third quarter. It was the strongest quarterly reading in two years after three straight quarters of sub-2% growth. Was it really that good? We think not! We surveyed businesses and we think that number is imaginary boosted by exports and especially soybean exports. That was the fastest pace in two years, up from a sluggish rate of 1.4% in the second quarter, and better than economists expected. A closer look at the trade boost to GDP shows that soybean exports were the big driver in a great GDP report. So we think the Obama economy is still hanging by a string. It is clear that GDP was boosted by a seasonal distortion to the numbers direclty relatd to soybeans — albeit a boost — that should not be overlooked.
27 Oct 2016
Our technical indicators at 3:45pm today indicated we should issue a buy alert for SPY calls. We did not issue the alert because the GDP will be reported tomorrow morning at 8:30am. Depending on this report the markets could plunge or soar. There will be much speculation and talk about does a good GDP number mean the Fed will raise rates. What if the GDP number if bad? Maybe the markets will advance on the speculation that free money (i.e. no interest rate hike) will continue. As we’ve written in this blog previously the Fed is restricted as to how high they can take rates. We believe that number is a maximum of 3.25% because above that we U.S. will be unable to pay the interest on the National Debt and we will be a bankrupt nation like Greece with no one to bail us out. Next week there are a number of economic indicators to include the jobs report next Friday, which can be a major market mover. Yesterday we issued an alert that provided a return of over 22% in about 45 minutes. We've also launched a new mobile friendly website located at www.thepowerofoptions.com.
Optik Beating Mutual Funds by 74%+
22 Oct 2016
The markets seem to be stuck in a sideways action part of this is from uncertainty surrounding the upcoming presidential election between Hillary and Trump. Right now the polls show Hillary in the lead but we need to recall that the polls showed that Briton would not exit the Euro. That poll was wrong and indeed this one might be as well. So hold on! Ongoing is the markets following oil as well as the continued banter over interest rates and will the Fed hike? The central bank moves seem to be a bigger influence. The belief that the Federal Reserve will hike rates in December and not at its next meeting in November with the presidential election in just 16 days away. The tension is near its highest of the year, with the market pricing in a roughly three-out-of-four chance that a hike will occur in the Fed’s final meeting of the year. We like to look at historical market action and the Dow has closed below the 50 day moving average for the last 30 days, but hasn’t dipped below the 200-day moving average. It is the longest such stretch since in almost three decades. We just updated our returns for 2016 and while not anywhere near the returns we had anticipated we are up 85% overall beating hands down all mutual funds We are hopeful to exit the year with a return of at least 200% but of course there are no guarantees.
Stocks Stuck in a Range – Is it a House of Cards?
09 Oct 2016
Markets seem to be holding up like a house of cards. Oil keeps moving the markets as well as does continued speculation on the Fed and Yellen’s rate hike plan or lack thereof. If I were a speculator – I am not – I would predict a major selloff in January 2017. Certainly, investors are not overwhelmingly in love with the markets with the latest AAII Sentiment Survey showing Bulls at just 24.0% and Bears at 37.1% (the respective norms are 38.4% and 30.4%). The Federal Reserve is likely to remain highly accommodative for quite some time as the U.S. economy is showing moderate growth and the dust is far from settled over Brexit. Did anyone see the news that Russia has its permanent air base in Syria. Now it’s looking at Cuba and Vietnam? (https://www.washingtonpost.com/news/worldviews/wp/2016/10/07/russia-has-its-permanent-airbase-in-syria-now-its-looking-at-cuba-and-vietnam/). So the world political stage continues to whip saw the market and add volatility. We continue to be steadfast in identifying the trend and running with it as we did this past week for a 45%+ return on two alerts. But the P/E ratio on the S&P 500 is elevated signaling caution and perhaps that January slide. The Feds current longer-run target of 2.9% for this benchmark is far below normal. As we’ve previously stated t can’t go up higher than this because then the United States become like Greece – bankrupt because we could not pay the interest on the National Debt! We think we have adapted to all these fluctuations and are now on course to deliver exceptional returns for the remainder of this year and beyond.
Where Are We Going?
29 Sept 2016
There were a number of times over the past week we wanted to issue an alert but our indicators simply would not trigger. Yesterday we had a spike in the markets brought about by OPEC stating they will cut oil production. Today the markets dropped because a congressman, drilling the CEO of Wells Fargo (WFC), announced they were going to investigate all the banks because of WFC’s illicit activities of issuing credit and debt cards to customers without the customer’s consent or knowledge. I think I can hear a major class action forming! It was almost like watching the Spanish Inquisition! Does it make sense that because Wells Fargo violated a number of laws that Congress should now investigate all banks? Wells Fargo's CEO, Stumpf, did seem to be out of touch with reality. When he was quizzed about what his competitors do, his response was he did not know. I can’t imagine any CEO, even one running a small business, not being aware of what the competition was doing. Crazy! Add on top of this all the talk and concern that Deutsche Bank (DB) may be close to failing without a major bailout by Germany, and DB has a ton of business around the world to include the US, the markets pushed down. It is clear that the markets are having kneejerk reactions to every bit of news. So the volatility continues.
Oil and Apple (AAPL) Push Markets Down Friday
24 Sept 2016
Markets tried to push higher Friday but oil and the drop in Apple (APPL), the top holding in the S&P 500, kept the markets lower. Are proprietary software indicates that staring Monday and continuing until the 3rd of October the SPY ETF should move up and we are anticipating hitting our target price on the current alert that was issued late in the day Friday. Markets were overall up for the week, and we see the S&P 500 going up to retest the August high of 2,194. In addition, this past week we saw the NASDAQ 100 make a new all-time high. This past week we also exited an early SPY trade for a 50% return. Markets continue to eye the Fed and Yellen who on Thursday failed yet again to raise rates. On CNBC this week we saw Jeremy James Siegel, who is the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania, state the housing should continue to be safe from higher rates for the next 5 to 10 years. We agree, until such a time that the United States reduces the National Debt it can’t afford any rate higher than 3% because it would be unable to pay the interest on the now outstanding $19,481,571,141,222 debt. We are looking forward to closing out this year by adding substantial gains.
Oil and Fed Meeting – Volatility
18 Sept 2016
Oil dropped this week pushing the markets down. In addition, there is fear on the street of a rate hike announcement this coming Wednesday at 2 pm by the Fed and Yellen. The greater effect of the two was clearly oil prices. Apple (AAPL), which is the largest holding in the S&P 500 Index, was up 12% this week and helped to hold up the markets. Our prediction is that there will be no rate hike Wednesday and the market will surge upward. Our late alert Friday we anticipate will do exceptionally well.
DOW Plunges Below 50-Day Moving Average
09 Sept 2016
This morning Federal Reserve Bank of Boston President Eric Rosengren started the sell off by stating, “a reasonable case can be made” for increasing interest rates because the economy is too hot and holding rates level creates the risk of making labor markets too tight, forcing the Fed to raise interest rates sharply, which could result in another recession, he warned in remarks prepared for a morning speech in Quincy, Mass. What great news to send the markets! It was very effective for the bears. Both the S&P 500 index SPX, -2.45% and the Dow Jones Industrial Average DJIA, -2.13% plunged below their 50-day moving averages, precipitated by a rout in equities and government bonds on intensifying fears that the Federal Reserve could finally raise rates. Friday’s steep selloff suggests that the market has not baked-in a September rate. Looks like the markets will be volatile until the Federal Reserve convenes for its two-day policy meeting Sept. 20-21 and announces its decision on rates.
S&P Hits New Highs in August
3 Sept 2016
There was some volatility in August and the major averages ended near the unchanged mark, the S&P 500 did manage to hit all-time closing highs on three separate occasions. Interestingly, those records came with little fanfare, as overall daily volumes continue to lag the average by about 50%. The American Association of Individual Investors (AAII) survey indicated that only 28.6% of respondents said they were Bullish on the prospects for stocks over the next six months, versus the 38.5% historical average, while 31.5% said they were Bearish. However, I have read that often the markets react 180% to the AAII surveys! The BofA Merrill Lynch Sell-Side Consensus Equity Sentiment Indicator, dropped to 49.6 on Aug. 31, the lowest level since 2013. The talking heads continue to espouse the futures dangers of the Brexit, oil prices, global warming, global GDP depression, terrorists, and the polarizing presidential election campaign as possible market black swans. But we have to recall history and historically the markets have enjoyed average annualized returns of the 10% to 12%. As Warren Buffett’s has proclaimed, “Be greedy when others are fearful and fearful when others are greedy.”
Last Friday the Employment Report was lackluster sending the markets higher at the open on the basis that Janet Yellen & Co. will not do a rate hike in September. This was also viewed as a negative for the financial ETF XLF as well as bank stocks. We need to take note that the Fed’s long run target is now 3.0%, which is quite a bit below the historical Fed Funds rate average of 5.5%. Why is it so low? Because the United States Government would go broke at a higher rate because we have allowed our National Debt to grow to such an outrageously high number, $19.5 TRILLON, that we could not afford any higher rate. We would be Greece on steroids! We are excited for the last 4 months of the year and hope to end up over 500%.
Volume Concerns - What Goes Up Eventually Comes Down
21 Aug 2016
If we look at the volume of the SPY ETF from July 15, 2015 to July 16, 2015 the daily average was 127,643,632. Since July 15th of this year the average daily volume has dropped to 63,359,106. That is a drop of just over 50%! I consider that a caution flag. I went back to look at the last period of time we saw this type of drop in volume it appears to have been in late November to early December of 2014. After that the volume picked back up and the markets declined about 5%. If we experience the same effect here, history does sometime repeat itself, then we should see the S&P move from 2,183 to 2,073 and the SPY dip to about 207.50. We are watching this closely and preparing to buy puts on the SPY at the right time.
December 1999 Repeats Itself – Triple High
11 Aug 2016
Yes, the last time this event occurred was December 1999, almost 17 years ago, where the DOW, S&P and NASDAQ all three achieved a new high. U.S. equities have recently traded in a tight range, but have managed to hit record highs. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 11.7, down 2.4 percent. There’s always a bear somewhere and Matt Tuttle, CEO of Tuttle Tactical Management, said "what worries me is volatility is so low." "I think this is over-extended." He also said that, "even though everything is bullish, I think we're due for a correction." U.S. oil settled 4.27 percent higher at $43.49 a barrel on comments from the Saudi oil minister about possible action to stabilize prices and as the International Energy Agency forecast crude markets would tighten in the second half of 2016, a day after falling nearly 2.5 percent amid an unexpected build in inventories.
Employment Situation Report – Market Maker or Breaker?
04 Aug 2016
It has been another exciting week on the market for Optik. We just closed the HYG position today for a gain of 24%. As we look forward, the team is closely monitoring tomorrow's Employment Situation Report out at 0830. Last month, nonfarm payrolls got back on track, surging 287,000 to eclipse May's 38,000 slump. Forecasters see growth in nonfarm payrolls easing back in July, to a consensus 185,000 in a result that would still be consistent with solid growth in the labor market. In other signs of strength, the unemployment rate is expected to dip 1 tenth to 4.8 percent with average hourly earnings picking up to 0.3 percent following June's very soft 0.1 percent gain.
Today the Bank of England cut interest rates with a global economy that is more uncertain than ever. The latest rate cut following the Brexit is meant to bring stability to the Pound and draw money back into the UKs economy. The Post-Brexit surge helped strengthen the US Dollar with investors seeking security. Even though the Fed desires to raise interest rates, competition from global currencies will likely keep US Interest Rates low through the end of 2016. Earnings season is in full swing with many companies reporting their results for the 3rd Quarter. Optik considers the best position in earnings to be no position. Instead, we look for value in overreactions and irrational trading from these swing traders.
After hitting all time highs multiple times the SPY has moved back down into the low to mid $216 range. With another better than expected report, we could very well see the SPY reach new heights again. As always, Optik is proud to help its clients navigate the uncertain waters in one of the most difficult markets investors have ever seen.
Markets Making History!
28 July 2016
Today was the 11th straight day the S&P 500 closed inside a 1% trading range, looking back for 40 years the first time this has ever happened! What does that mean? We are not sure! Everyone wants to know what happens to stocks following these ranges. It has been observed that tight ranges are generally followed by out-sized moves. Each tight range and sun up appears to be followed by market drops. In fact, following 7/31/2013, 1/10/2014, 9/11/2014 and 12/8/2014, the S&P 500 experienced 1-month drawdowns of -3.3%, -5.5%, -4.6% and -4.3% respectively. But as we all know past performance is no guarantee of future performance. We continue to watch the market looking for a clear signals. The most recent was our alert on GE.
27 July 2016
The UK economy grew by 0.6% in the three months to the end of June, as economic growth accelerated in the run-up to the vote to leave the EU. The strongest growth was in April, followed by a sharp easing off in May and June. On a yearly basis the UK economy grew 2.2%. The pick-up was boosted by the biggest upturn in industrial output since 1999. That is the great news because economists, including those at the Bank of England, had estimated second-quarter growth would be about 0.5%. The Fed today, in its typical mumbo jumbo speak, stated that the economy is good and we are planning to ease forward with rate hikes but we will not tell you when or provide definitive news or a timeline – it just all depends. They must all be lawyers because that is a typical lawyer response – “it all depends.” We are anticipating a significant market dip between now and October and are watching the markets very closely. In fact, Strategist Tom Lee, one of the biggest bulls state that he is concerned moving forward because in the last seven years the S&P 500 has fallen an average of 6 percent during the month of August. Additionally, because the bond market has become a lot more volatile than equities, and whenever this happens, over 60% of the time, the stock market falls in the following month. So we are set up for a significant potential dip.
New Record Highs Continue on the SPY
25 July 2016
Last week our primary trading instrument at Optik Options (the SPY) set new all time highs. After experiencing a slight dip earlier in the week, the SPY roared upward past its previous high of 217.01 up to a peak of 217.37. With current world events and market uncertainty, the SPY will continue to be one of the most liquid ETFs on the NYSE. This week Optik is monitoring many technical events and the FOMC meetings Tuesday and Wednesday. Given the recent bull market, there is more market uncertainty given the Fed's desire to raise rates. Optik is proud to help navigate it's clients through the uncertain waters and looks to continue building on its successes in 2016 markets grind higher.
Low Volume - Slight Pullback
21 July 2016
Markets have had a record streak of up days until today and we saw a little pullback. Just yesterday we saw the seventh straight day of gains. New stock market highs are being supported by low interest rates and the belief that the Fed will not hike rates this year. Aggregate earnings so far in the second quarter have shown a 4.4% decline in profits year-over-year, marking a fourth straight quarter of weaker earnings, according to S&P Global Market Intelligence. This streak up has been on low summer volume. We expect a significant pull back to occur. The International Monetary Fund (IMF) today made an “urgent” call for the world’s largest economies to roll out more growth-boosting policies. Further the IMF asked the Group of 20 largest economies to prepare contingency plans in case of a further downturn.
New Record High on the S&P
11 July 2016
We were able to return 29%+ on our most recent alert on the SPY! Congratualtions to all that participated. The S&P closed at above its previous all-time closing high at 2130.82 with this continued rally after the BREXIT happened. Participants remained upbeat following a headline beat in Friday's Employment Situation Report for June and in Japan, Prime Minister Shinzo Abe's LDP won a supermajority, paving the way to an easier approval process of potential future stimulus measures. This event helped to push the markets higher as well. The Nasdaq Composite (+0.6%) finished ahead of the Dow Jones Industrial Average (+0.4%) and the S&P 500 (+0.3%). “The record today is a reasonable response to the fact that the world looks a little better than it did a week ago,” said Russ Koesterich, head of asset allocation for BlackRock’s Global Allocation Fund. “But the ability to move higher going forward is going to come down to a better economy and stronger earnings growth.” Analysts and investors said maintaining these heights will require signs of improvement in earnings, with companies including BlackRock, J.P. Morgan and Wells Fargo scheduled to report this week. “Ultralow rates are just driving the stock market,” said Bruce Bittles, chief investment strategist at Robert W. Baird. “I’ve been doing this for a long time and I’ve never been in an environment like this.” As of June 30, analysts expected corporate profits to fall 5.3% in the second quarter compared with the prior year, a fifth consecutive quarter of contraction, FactSet data show.
Rollercoaster - One Ticket Unlimited Rides
2 July 2016
As we predicted BREXIT happened and the markets collapsed for a couple days just to recover over the next few and now we are back to where we were before BREXIT! What a roller coaster ride. There is no denying that the market experienced an amazing rally this past week. The question is whether this rally will persist now that price is reaching strong overhead resistance once again. We are voting no. We look to be locked in a trading range that appears to have no end insight. We do not see any reason for a breakout in the market we think there is a higher likelihood of a breakdown between now and October. Why would we take this position over a breakout? We have a global low growth economic outlook. While earnings this past quarter were reasonable, many companies were pointing towards headwinds. The Fed keeps the market guessing – they are falling flat on their faces at unity and leadership in this market it is the worst led Fed in history! Markets are also still trading with oil. If you watch oil then you can see the direction of the markets. As we stated in our last posting, we plan to start issuing more alerts with short-term gains of about 20%.
Banks are Doomed This Year – Volatility Continues
26 June 2016
BREXIT equates to no rate hikes by the Fed this year, which equates to banks being doomed for the remainder of the year. With no rate hike the banks, which were looking as thought they may be a favorable investment three or more months ago, now look to be sidelined and out of the game. Our prediction for months, if you look back at our old posting, has been continued volatility in a market that is locked in a trading range. We find this to be even more true now. With the Brits leaving the EU uncertainty abounds globally and volatility in the markets shall continue if not accelerate! There will be excellent opportunities along the way and we are planning to increase alerts, as technical indicators dictate, to take advantage of multiple moves on the SPY in a tighter trading range. Our plan is to produce eight or more alerts per month, each with a minimum gain of 20% for a total return of 160% plus per month. In addition, we will continue to keep an eye out for special opportunities, as we always have, such as we did recently with EEM returning 66%. We will be publishing our Q2 results sometime in July.
BREXIT – Should I Stay or Sould I Go?
23 June 2016
As I write this there is only 15 minutes left to vote in the U.K. on the decision to remain in the EU or leave. I listened to the former Mayor of London and he made very good points on leaving to include they’ve lost their sovereignty as a result of being part of the EU and they are also incurring financial strain when the have to support and bailout the PIGS (Portugal, Italy, Greece and Spain). He also made an excellent point concerning President Obama wanting the U.K. to remain, which is would the U.S. agree to a joint currency with Mexico and Canada and to be controlled by other nations? Of course, the answer is no! The world should know sometime on Friday what the outcome will be. The $VIX (volatility index) sold off today and the markets popped in anticipation that the U.K. will stay in the EU. But in the afternoon today, the reports I heard stated that the vote to leave was ahead. As the saying goes, we will not know until the fat lady sings. If the vote is to leave I would expect the $VIX to spike and the SPY to drop.
Market Moving Events
14 June 2016
Markets are being pulled in many directions. The fear of what will happen if the United Kingdom exits the Euro is kindling fear. Additionally, there are a number of events this week that will move markets to include release of Retail Sales numbers today at 0830, the FOMC meeting and its release of its decisions on Wednesday. PPI, Yellen press conference on Wednesday, as well as CPI and Philadelphia Fed Business Outlook on Thursday and closing the week Friday with Housing Starts. Oil is still moving the market as well. The WTI ended the day lower by 0.4% ($48.88/bbl; -$0.18). The S&P 500 (-0.8%) ebbed lower through afternoon trade, breaking support at the 2084. The tech sector (-0.9%) underperformed Apple (AAPL) declined by 1.5%. Microsoft (MSFT) finished lower by 2.6% after announcing that it would acquire LinkedIn (LNKD) for $196 per share. The Dow Jones Transportation Average (-1.1%) ended behind the broader market as weakness in airlines pressured the index and the broader industrial sector (-1.1%). The U.S. Global Jets ETF (JETS) ended lower by 3.0%. On the flipside, The CBOE Volatility Index (VIX) jumped 23.3%.
Markets Moving Up on Oil and No Rate Hike
6 June 2016
Markets boosted today by oil prices nearing $50 a barrel and also the theory that after the terrible jobs numbers this past Friday that interest rates will remain in place with no hike this month. Ms. Yellen stated in prepared remarks that she remains positive on the economic outlook of the U.S. economy and warned that too much significance should not be assigned to one monthly report. Ms. Yellen stated that last Friday's Employment Situation Report was concerning. She provided no hint of a near term rate hike but maintained that further gradual increases in the federal funds rate are likely to be appropriate. Today the Dow Jones Industrial Average (+0.6%) ended ahead of the Nasdaq Composite (+0.5%) and the S&P 500 (+0.5%).
No Discrimination Here
29 May 2016
“The regional and global class system that exists in almost every other arena is nearly non-existent in the trading arena. The markets embrace you regardless of your color, creed or religion. All are welcome. All are treated equally. The only thing the markets demand is that you honestly care about the trade and follow clearly established protocols.” – Gatis Roze. Nothing is more true. No one sees what you look like, where you live, what religion you are, you are only an account number placing trades in the ether. It is a scary place and Bankrate.com states that in 2002, 33% of Americans were not involved in the stock market. Today that percentage has grown to 52%. People are making a bug mistake by not investing, especially younger people. They are missing out on one of the greatest opportunities in the world— investing in the growth and innovation of the world’s biggest, most dynamic, most creative economy. America is innovative. The world comes here for the capitalist ventures and the opportunity of wealth no available anywhere else in the world. Long-term, the economy grows and stocks along with it. GDP is at very low lows and no where to go from here but up. For the long term investor Warren Buffet’s methodology is going to work and now is the time to be all in.
Market Continues Sideways
23 May 2016
As we have reported the S&P is locked in a range running between 1,810 and 2,134 since February 2014 – over 2 years now! The S&P hit its high of 2,134 on May 20, 2015 and more recently a low of 1,810 on February 11, 2016. In the last 3 months the S&P ETF, the SPY, has been running between 180.16 (Feb 11th) to 210.92 (April 20th). We expect this volatility and being locked in a range to continue for the remainder of the year. The minutes from the Fed's April meeting revealed policymakers intend to raise interest rates as soon as June if second-quarter economic growth picks up, labor market improvement continues, and inflation remains on track to hit the Fed's 2-percent target. Eric Rosengren, the president of the Federal Reserve Bank of Boston, told the Financial Times that financial and economic indicators swung positive after the Fed’s policy meeting in March. This means that a Fed rate hike is highly likely. Until last week markets were putting extremely low odds on a summer rate hike. A rate hike will have a negative effect on the markets. This week we also see the GDP release Friday at 0830 and it is not expected to be good. There is also ongoing global geopolitical concerns with continuing concerns over China’s claims to the South China Sea. It is critical that the U.S. “not to interfere in China's internal affairs," said Li Zhaoxing, who served as China's ambassador to the United States from 1998 to 2001. Li's remarks came as tensions rise between China and the U.S. over the South China Sea. Therefore, we see the SPY range to continue between 190 to 210 – be alert.
What is real? Not much but OptikOptions is real!
15 May 2016
We have subscribed to many trading alert services. Once we recently looked into sends out and alert then it waits for the very highest return on that option and it published that return, which if never bought or traded, as its performance! If we did this we would hardly ever have a bad return and many would certainly be over 100%. But we don’t deal in fiction. Recently, MarketWatch.com published an article online calling out CNBC’s Jim Cramer as a fraud. The article stated in part, “CNBC TV personality and “Mad Money” host Jim Cramer has built a lucrative career as a stock picker, but a new analysis of his charitable fund—a personal stock portfolio he co-manages that the financial website he founded has built a subscription service upon—shows he doesn’t beat the market. Cramer’s Action Alerts Plus portfolio has underperformed the S&P 500 index” total cumulative returns since its 2001 inception, according to a paper released by Jonathan Hartley and Matthew Olson, researchers from the Wharton School at the University of Pennsylvania. We did not have this data but we have known that the talking heads on TV are 90% entertainment. If they could pick great plays in the market consistently they would not be on TV they’d be on their private island while their PTF made money for them. Teddy Roosevelt summed it up about the talking heads on TV (and he was not aware he was) when he said: “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again.”
The Week Ahead
8 May 2016
Last week the S&P opened the week at 2,067 and ended the week down 10 points at 2,047. The jobs number Friday was well below expectations and initially drove the markets down. But what is this market all about? What drives it? There are two predominate factors that have been at play for months in this market. First, is the price of oil. We have seen the market following oil almost in 100% lockstep and it pretty much continued this track last week. UWTI (Velocity Shares 3x Long Crude Oil ETN) started the week at $31.60 and closed down at $29.11 – so the S&P followed oil. The other factor is the cost of money – i.e. interest rates. The initial kneejerk reaction Friday was that the job number was bad so the market dropped. However, right now bad numbers are also good numbers because they inhibit Janet Yellen and the Fed from raising interest rates. Keeping money cheap keeps the markets up as it allows continued investment and the leveraging of debt at historically low rates - a win-win for corporate America! Therefore, continued low rates equate to an undervalued market that cautiously moves the markets up ever so slowly. We expect continued volatility this year and next as GDP worldwide continue to erode. We will continue to spot great opportunities and take advantage of those opportunities.
30 April 2016
The stock market ended the week on a lower note as the major averages surrendered to month-end selling pressure. This coming week there are a number of economic reports that could potentially move the markets. Monday is the ISM Manufacturing Index, Tuesday Motor Vehicle Sales, Wednesday International Trade, Friday the Employment Report. Markets have been propped up by oil prices. But Friday the Dow Jones industrial average gave up 57.12 points 17,773.64. It was down as much as 178 points at one time Friday. The S&P 500 index fell 10.51 points to 2,065.30 and the Nasdaq composite index lost 29.93 points to 4,775.36. That was its seventh decline in a row.
It’s Back – Oil Moving the Markets
24 April 2016
We had indications that the markets had separated from oil but that does not seem the case given that the past two weeks markets continue to rise as oil moves up. This week may be different however because of key economic indicators being released that the market will not be able to ignore regardless of the price of oil. The number one indicator will be the release of the GDP at 0830 Thursday. We are expecting a very weak number and think it will bring the markets down. In addition, Monday at 1000 we have New Home Sales, Tuesday at 0830 Durable Goods Orders and Friday Personal Income and Outlays. The technical indicators are still showing an over bought market. The exact timing of when this bubble will burst is unknown but this week looks to be key.
2117 Means Real Rally?
19 April 2016
We are watching the technical on the S&P 500 Large Cap Index and for many months, as we have reported, it’s been locked in a range. The markets are pushing and may punch through the range. Why? We have no idea there is no real reason and we have to guess it is just mass hysteria or hedge funds pushing it up to make a fortune on shorting. If we the S&P moves to 2117 or higher then we see a true longer term bull rally. We have been expecting a pullback for days now. We thought it would happen when the oil deal in Doha fell apart and we saw a momentary drop in the market yesterday only to witness a very strong recovery. Right now we are holding our positions and may add to our September VXX. We think this is a sure bet with plenty of time to make the numbers. That said our SPY puts that expire this Friday may be in jeopardy absent a correction starting before the close Wednesday.
Oil Deal Dead in Doha
17 April 2016
As most have noticed as oil goes so does the market. This has been the case for about five months. Oil this past week helped hold the markets up in the wake of less than stellar earnings and future growth. But this weekend a summit was held in Doha, Qatar amongst the world's largest oil producing countries. The hope was it would end in a joint agreement to cap oil production. But the meeting ended with no agreement and it has sent oil futures tanking – down 6% or more at times and the DOW futures are -100. The markets were already pushing the limits and many technical indicators were indicating overbought. We almost issues a buy puts alert on SPY late Friday but we could not predict the outcome of the meeting in Doha. We anticipate continued volatility in the markets.
Irrational Exuberance – While Optik is up 198%
13 April 2016
Congratulations to all – we are up 198%! What we saw today was irrational exuberance. The market, despite overall bad economic data, have been helped by climbing oil prices in the past few days. Today’s big jump was because China reported a big increase in exports. Now we all know that this democratic country where the people oversee all governmental action never has numbers to reports that are not 100% accurate! If you think that is true, please send me $20,000 and you will be wealthy, happy and healthy until age 100. We think that that the next few days we will see a drastic pullback. Recall, the SPY has been hitting lower highs and lower lows since May 20, 2015. While we could see a breakout we are betting that we are heading back down.
Quarterly Earnings Kickoff Next Week
09 April 2016
Earnings kickoff with Alcoa (AA) next week. Markets have been locked in a range with the S&P running between 1810 and 2134 since February 13, 2014. The S&P hit a high of 2134 on May 20, 2015 and more recently a low of 1810 on February 11, 2016. So for nine months we’ve been experiencing lots of volatility. Since December the market has also been moving with the movement of the price of oil. We stumbled but have recovered and Optik Options Alerts are now up 125% for the year! Earnings will likely have a major impact and the banks (Wells Fargo) will lead the pack reporting nest week. This means that that XLF (Financial Select Sector SPDR® Fund) could be a good investment for options expiring in October or later.
So while we see positive trends in many areas there is still much caution needed. We’ve adapted a new analysis model that has been working well. It is hard to say this but we have to learn to be optimistic and pessimistic everyday because you never know what the news will bring. We expect volatility to continue due to a variety of conditions to include but not limited to economic slowing (GDP forecast reductions), China, EU, the Fed and Janet’s interest rate challenge as well as the unexpected. For instance the US has deployed heavy bombers to Qatar to fight ISIS. We will continue to watch the VIX (CBOE volatility index). Our experience is when it gets low (below 15) that buying SPY puts with expirations about 3 months out have historically proven lucrative. Our shout out is, watch the range of the S&P. When it is below 1890 we are looking at buying calls and above 2070 buying puts. As I look at the charts this evening it stands out on a one-year chart of the SPY that we have been hitting lower highs and lower lows since May 20, 2015. Our best beat would therefore seem to be short-term positions dictated by market tops and bottoms. We are hoping that we will hit over 2,000% for this year and have eight months to make it happen.
Optik Options Up 92% in the First Quarter! Beating the S&P 500
2 April 16
The S&P 500 was up for the first quarter of 2016 by 0.77% why our alert service was up 92% for the same period! Corporate revenue projections are not looking good and the GDP projections for both the United States and globally has contracted substantially. Markets and the U.S. economy have continued to shrug off fears of this clear global economic downturn. Further, while the markets appeared to have decoupled from oil that was clearly not the case this past week as the markets reacted lockstep to changes in the price of oil. While the numbers show consistent job gains we feel that the numbers fail to reflect the true level of unemployment. In addition, economic indicators are showing that consumers are still spending. We continue to watch for clear opportunities and are pleased to have produced an overall return of 92% for 1Q16. Lastly, our most recent alert on Disney (DIS) provided a return of 37%.
St. Patrick’s Day Returns Solid Overall Gain of 78%
18 Mar 2016
Greetings to all. We hit our targets today on V, actually we hit it earlier but many people missed the exit, which provided a gain of 43%. We also hit our target (in 24 hours) on PFE for a gain of 35%. A total return of 78%! Congratulations to all our subscribers. We are still holding positions in the biotech sector (ABBV and CELG) that we are optimistic will recover nicely in the 28 days remaining until expiration. Also we are holding on to the GS alert, which appears to have started to move up.
SPY Alert – 43% Return in 24 Hours
16 Mar 2016
Congratulations to all who participated in the Alert on the March 24th $202 Calls we issued yesterday. We entered that trade at 1.15 and exited at 1.65 and it actually had a high of 1.90. So we hit our target return of 43% and for those that went our at $1.90 they enjoyed a return of 65%. We are in a holding pattern for ABBV, which was a great buy it was pulled down by the negative news in the biotech industry and should bounce back and provide an excellent return. The FEDs news today was not good for our position in GS but we are optimistic that it will make the numbers before expiration.
FOMC Meeting Makes Markets Jumpy
15 Mar 2016
Markets will be fluctuating this week waiting on the Federal Reserve release of its meeting decisions on Wednesday. As we’ve been writing for months we are going to see lots of volatility this year. The good news is we think we have decoded the direction of the markets and we are in full swing monitoring and issuing alerts. We were off to a bad start for the new year but most recently provided a solid gain on Alphabet (GOOGL). We have issued two new alerts today and have a total of three (3) outstanding that is generally nearing our maximum number of active alerts at one time. We plan to beat our returns of last year and have gained a great base of subscribers. We will soon be initiating a customer award program for referrals. When the Fed last met on Jan. 26th and 27th, global stock markets were in free fall. The S&P 500 dropped 10.5% between Dec. 31 and Feb. 11 before stabilizing and recouping most of its losses. We are focused on being alert but blocking out all the talking heads and focusing instead on the S&P 500 technical indictors.
March Opens with a Rally and We Score with Alphabet
29 Feb 2016
After a very shaky start to the year and two alerts that were killed by the markets tracking the price of oil we hit big today on Alphabet (GOOGL). We placed an alert to purchase the GOOGL March $730 calls at $11.40 or less (the low today was $10.80) with an exit at $16 for a return of just over 40%. This trade was a great success. In fact, the high today was $20.00 on the GOOGL option. Had we held to $20 that would have provided a return (in the same day!) of 75%. We have finally decoupled from oil and hope that the numbers for the remainder of the year are positive. Thanks to all our subscribers.
Markets Decoupling From Oil
29 Feb 2016
Markets appear to have decoupled from the price of oil and we can now resume issuing alerts. We want to thank all the subscribers for their patience.
Rally Rally Rally
22 Feb 2016
The major U.S. indices started the week as it had ended last week on an upbeat note. Oil was up, why we are not certain, and equities rallied in tandem. Commodities also helped to push the markets higher with cooper and aluminum moving up and as well as rumors of a possible merger between industrial giants Honeywell (HON) and United Technologies (UTX). Consumer discretionary names Amazon (AMZN) and Netflix (NFLX) benefited from a positive profile in Barron's. The two companies were cited as possible beneficiaries of the FCC's decision to move forward with efforts to open the cable box market. The Treasury complex traded in a narrow range, showing modest losses throughout the day. As a result, the yield on the 10-yr note edged up one basis point to 1.76%. The strong open held up all day as dip buyers stepped in as necessary to support on any pullbacks.
Market Swings Oil Continues Down
08 Feb 2016
Wall Street rode another crazy day at one point the Dow was down more than 400 points. Technology shares, which soared last year, experienced especially aggressive selling, bringing the tech-heavy Nasdaq composite index down almost 20& from its high last year.
The losses left major market indexes down for the second day in a row, extending what has been a dismal beginning of 2016 for the stock market, its worst start to a year on record. For the year, the Dow is now down 8 percent, while the S&P 500 is down 9.3 percent. The Nasdaq has lost 14.5 percent this year. Several factors have kept investors in a selling mood, including falling crude oil prices, the impact of a stronger dollar on U.S. company earnings, and heightened concern that economic growth is slowing in China and globally. Fears of a global economic downturn are now heightening concerns that the U.S. economy could slide into a recession later this year. Crude oil fell $1.20, or 3.9 percent, to close at $29.69 a barrel in New York. The prolonged slump in oil prices has investors worried that companies that drill for crude may not be able to pay back their loans. Precious metals prices rose sharply as traders took cover from the turbulence in the stock market. Gold jumped to $40.20, up 3.5%, to $1,197.90 an ounce. There appears to be no end on the horizon to the continued waves of extreme volatility.
Volatility Continues Fear of Rate Hikes and Reaction to Oil
5 Feb 2016
Stocks posted steep losses Friday, ending the week with broad declines, as major investors grew concerned that the Fed will continue to move interest rates higher. This wave of thinking was caused by the jobs report this morning showing that U.S. job creation slowed last month. The report caused the dollar to strengthen against other currencies, reversing some of the last two days of declines. The report also raised a new worry about Federal Reserve interest rate policy. Investors had been betting in recent weeks that a slowing U.S. economy might prompt the Federal Reserve to delay plans to raise interest rates. But the Fed could see the data showing the growth in hourly wages as an early sign of inflation, which in turn might cause them to keep raising rates even in a slowing economy. Investors were discouraged by a report that showed U.S. employers added 151,000 jobs last month, a sharp deceleration from recent months as companies shed education, transportation and temporary workers. That was below economists' forecasts of 185,000 new jobs. Tech stocks fell hard, and shares of LinkedIn had their worst day in history losing over 40% of value on dismal forecast it issued last night. Tableau Software plunged $40.40, or 49 percent, to $41.33 after the data analytics company reported a wider-than-expected loss and its software license revenue missed analysts' predictions. Tableau's dismal results spread to other software companies, like Salesforce.com, which fell 13 percent, and Adobe Systems, which fell 8 percent. Energy and consumer discretionary stocks fell as oil prices declined and investors continued to worry that the risk of the U.S. economy slipping into recession. The Dow Jones industrial average fell 211.75 points, or 1.3 percent, to 16,204.83. The Standard & Poor's 500 index lost 35.43 points, or 1.9 percent, to 1,880.02 and the Nasdaq composite dropped 146.41 points, or 3.3 percent, to 4,363.14. We continue to hold our positions with the view that the February options will expire worthless absent a historic recovery.
Selling Continues with Oil Price Decline
25 Jan 2016
The stock market started heavy selling pressure around 1:30ET today spurred by continued declines oil prices, added selling pressure in the financial sector, a decidedly poor showing from the small-cap stocks and a violation of a technical support level at 1890 for the S&P 500. The biggest loser of the day was the Russell 2000 (-2.3%). It was followed by the Nasdaq Composite (-1.6%), the S&P 500 (-1.6%), and the Dow Jones Industrial Average (-1.3%). The week ahead contains a number of potentially important market-moving catalysts:
- Earnings results from the likes of Apple (AAPL), Amazon.com (AMZN), Boeing (BA),
and Ford (F) to name a few luminaries,
- S&P/Case-Shiller home price index and Consumer Confidence on Tuesday,
- FMOC meeting announcement on Wednesday as well as new home sales,
- Bank of Japan meeting on Thursday; and
- Friday the advance estimate for fourth quarter GDP.
Sell Off Over?
21 Jan 2016
It all depends on the price of oil – has it bottomed? We think not but we think it is close. The end of the selloff, which started this year off on a very negative note, is nearing an end we believe. Yesterday at one point the DOW was down over 560 but it rebounded significantly with biotech leading the way. A major part of the negative DOW was IBM, which pulled it down, being one of the 30 components. The rebound Thursday, was the result of oil apparently stopping its month long slide as well as oil futures expiring. Today we had a strong rally prior to the open that was spawned by the European Central Bank President, Mario Draghi, stating that in March there could be further stimulus in March for Europe. We still are not certain as to what Saudi Arabia will do with oil production or the effect when Iran’s oil hits the global markets. There was an oil inventory report today that inventories have grown by 4 million barrels in the US that had a slight and momentary negative effect on the markets. The market appeared unable today to hold up and after being up over 200 points pulled back for a close up 116. For now we are holding our two positions in the SPY and continue to monitor the markets, China and oil. Historically February has been a very positive month for the markets and it will be here very soon.
Markets Continue Volatility - Up 300 Thursday, Down 300 Friday?
9 Jan 2016
Roller coaster continues. Steep declines in oil prices have the futures fown substantially. This coupled with Chinese equities heightened anxieties that have pushed markets lower so far year for a historic worst opening for the markets. Stock futures pointed to a 2% opening loss for the S&P 500, reversing Thursday’s rally. Changes in futures don’t necessarily reflect market moves after the opening bell. The Stoxx Europe 600 was down 2% halfway through the session, dragged lower by energy and mining firms as Brent crude oil fell below $30 a barrel. Asian stocks closed lower, with China’s Shanghai Composite Index falling 3.6% to enter bear-market territory, having lost 20% from a high in late December.
Worst Opening Week in History!
9 Jan 2016
What more can we say – “the worst week in history.” – sort of says it all. The global markets lost $2.3 trillion in market cap in the first four days of 2016. We are staying the course for now with our two alerts. Our technical indicators were on the edge of turning positive most of the day Friday. While this week was down investors will be happy to know that the predictive power of the first week of trading tends to be more relevant when the market is going up, rather than down. The Shanghai Composite Index, which was halted by China on two days this past week, appears to have stabilized. It was up nearly 2% on Friday and China officials have also removed the circuit breakers that shut the market down this past week. Earnings season starts this coming week and that should provide a catalyst for renewed market direction. Lastly, after the close Friday the ISE Sentiment Index was at 50. The ISEE is a measure of investor sentiment in the market measured by looking at the number of opening long call options to opening long put options purchased on the International Stock Exchange. A value of 50 is an indicator of a “screaming buy” according to All About Market Indicators, by M. Sincere. We are hopeful that the ISEE is correct and we have a wild ride up, comparable to the ride down that we experienced this past week. Options Alert PRO continues to monitor the situation.
06 Jan 2016 - 9:50pm ET
China has halted trading once again therefore, we are looking at another possible bad opening on Thursday the 7th of January.
Bad Start to 2016 & Continued Volatility
06 Jan 2016
If you watch the markets each day as we do, we expect that you're as surprised as us at the recent action. Today should have been a great day with the markets moving up, but the news out of North Korea was a major black swan. That coupled with the continued downward spiral in oil, China’s woes and the World Bank today cutting the global GDP outlook pushed the markets lower. Absent another black swan, we anticipate the market may rebound tomorrow. This is one of the worst openings to a new year in market history. We have continued to warn that volatility will increase for 2016. Some analysts are also calling for a possible 30% market correction this year. There are a number of potential black swans brewing on the horizon to include: China, oil prices, FOMC rate increases, Russia, North Korea, Japan's possible debt crash, terrorisum and who knows what else could be next. We continue to have a positive outlook on our current position, the SPY Feb. $203 Calls, as there remains 43 days to expiration. We are also antiipating another possible alert to be issued in conjunction with the current alert. Thanks much - Options Alert PROTM.
Happy New Year!
1 Jan 2016
2015 marks our best year ever returning over 3,100% to our subscribers! We now have a few days to prepare before trading resumes in 2016. As the opening month of the New Year, January is host to many important events, indicators, and recurring market patterns. Financial analysts release annual forecasts and a host of factors start fresh. The first week of the new trading year we have a number of economic indicators reporting. Monday, the PMI Manufacturing Index (9:45 AM ET), ISM Manufacturing Index and Construction Spending both at 10 AM ET. Wednesday report on International Trade (8:30 AM ET) and FOMC Minutes at 2 PM ET. Lastly, on Friday at 8:30 AM ET the Job Situation. January's overall gain or loss triggers something called the January Barometer. This states that the movement of the S&P 500 during January sets the stock market’s direction for the entire year and it was correct for 2015. We are anticipating a positive outlook based upon our proprietary indicators and we look forward to a great 2016 – Happy New Year!