Phil/ et al- Thanks for the answers to my spread questions last night, as I really needed that little piece of knowledge to crystallize my understanding of spreads. Your help is much appreciated and I have been doing really well for the last couple of months with fewer and fewer missteps as I embrace the PSW ways and watching my portfolios grow.
In options trading, one must remain flexible with the ability to adjust to take advantage of the unexpected moves in the market. It is like chess - spend most of your time strategizing the next move. A good understanding of options is necessary to change direction and make adjustments as the market moves against you. I have a friend that honed his option skills while a member of Phil's elite membership over a period of two years. With the education acquired, he made over $2 Mil in that period, trading options and following the plays put on by Phil. If making money is your goal, then he is the go-to guy, as he knows option strategies better than anyone, and market timing is also a skill he has mastered.
I subscribed to Phils Stock World full service for a year or so and found that it was extremely helpful. Now I just get the Stock World Weekly summary, which I find invaluable.
Phil does not baby people and certainly can't make someone into a successful stock operator who does not make the effort on their own behalf, but he is extremely generous with his time in answering newbie questions.
Although I found it difficult to follow and implement all his trades in real time, what I did find was that once you got the hang of his methodology and way of thinking, you could work out your own trades and be quite successful. Even just using his patent Rule Number One* alone is worth its weight in gold. Rule Number Two is even better.
Rookie IRA Investor
Hey I just did a nice options trade on LL for $800 (50%) gain thanks to this site, so… not bad for my first day! An hour of reading you guys and I already paid for two months subscription! Thank you!
AMZN ... thanks Phil; boy did they run a squeeze on everyone there ... made me sweat ... scaling helped! I think AMZN has an 85 handle tomorrow ... maybe lower.
Phil/BCS - Didn't realise they traded here. Should've known really. Thanks for the tip. managed to pick some up just before the close at a 15% discount to the UK closing price.
GOOG, NFLX and AAPL all bought last hour Friday. Sold into the excitement the first hour today for an average of 15% on the options. And lots of them. Thanks again Phil for teaching me so well.
Phil/Everyone here/Thank you - What everyone here with their insightful comments (including yourself) has helped me with is that I'm greatly increasing my ability to trade more psychologically neutral, although I've got a ways to go. Two years ago I'd wake up early and my heart would race if futures weren't pointing exactly how I wanted… I've noticed an exponential leap in my discipline skills especially over this past two weeks. The old me would have ran with that trade for profits without even asking. Now I know that there are ALWAYS more trades and that I have PLENTY of options to turn a bad trade even. Also, it's more logical and less emotionally draining which lets me focus my faculties on my wife, college, my job, and studying for the ol' Series 7. Would it be safe to say that one of the most important skills to develop is the ability to adjust? I'd love to get to the point where I can look at a bracket and know, for example, what I need to sell for cover in what month in order to get my desired results. Both COF and my past DMM venture have been excellent learning experiences. Thanks, everyone. I look forward to further lessons.
Phil...The hundred grand portfolio updates are helpful...Fun ..and have been profitable...really like em... made some nice entries into USB, KEY today... and I better add those FAZ calls tomorrow... Really glad you put that up this morning...
Thanks Phil for helping make this a much, much better year this year than last. Your tutelage has been so very helpful. Don't think I can say Thanks enough. And I thanks all the members here who were work hard in helping us all to become better traders, and I would say better people as well. The support many of you offered when we evacuated during the fire this past year helped me immeasurably.
Happy New Years to you all!
I would like to thank Phil and PSW crew for the insight and assistance (even the liberals).
In December I initiated long stock positions buying stock, writing calls and puts in AAPL, WFR and CHK (scaling in and out). Over the last week I have been trimming back my positions selling stock and taking out my callers and putters. I am now back to my initial 25% position that I started with in December. However this time, my cost basis on shares AAPL, WFR, and CHK is $0! With money to spare from those positions.
10/15/2014: Phil…..been travelling more than not but reading and watching you guys every night. This is to say a big thank you. Even though I don't have the time to trade every day now I set up hedges and base long term strategy on PSW. I now it may sound like BS to some readers but my 401k is down a mere 3%. It hardly gets my attention when I open my brokerage portfolio accounts. And that is by using your longer term hedges and strategies. I don't need to be a day trader to take advantage of PSW. At this time in my life when I cant trade every day……. not losing what we've gained moves front and center. It's just a great feeling to watch your brokerage account hold steady in a sea of red. Thanks Teacher.
Best day ever trading the futures, thanks to Phil's excellent call this am, and his "play the laggard" instruction. Well done Phil!
Thanks for the USO mention, Phil, 140% on my USO lottery ticket in 12 hours, and no hesitation in taking the money and running — you have trained us well. Sometimes it's teaching, but with this kind of stuff, where you get whipped like a dog if you let 250% profit melt away, it's definitely training. Happy Fourth!!!
It was a nice day thanks to your help! Made over $1100 shorting TF every time it came up near 1260 and even more by going long oil before inventory under $46 and then waited patiently for the spike up into the close where I shorted it at 47.70 or so. Phil you gave me a road map and I simply followed the signs along the way.
Market manipulation…. One of the things I've gained from this site is the concept of market manipulation. I never thought it was so prevalent, but now I know it is. I actually consider its effect when I make trades. Several days ago, when AAPL was moving toward 220 I sold 210 calls. My reasoning was that they will probably pin this month at 210. They came in big time as the stock moved ever closer to 210. I agree with Phil's comment that one of the things we need to do is find out what they are manipulating, and how, and hitch a ride. They are doing this with several equities. I've actually seen one article describing several equities that were being manipulated to pin at expiration each month, and describing how it was done, and of course Phil has described it well. In some ways it's easier to figure this out than it is a ‘normal' market behavior, and thus easier to make money in certain equities.
Thank God for Phil.
A few months ago (April) I didn´t even know what hedging was, and someone recommended I should check out some of Phil´s plays, especially on the retirement portfolio. When I first started to read it, none of it made a blind bit of sense to me, but I stuck with it and gradually began to work through some of the trades to see how it worked. Now I am putting on 5:1 SPY backspreads combined with bear put spreads, entering and leaving positions after consulting the VIX, and engaging in other esoteric maneuvers that are keeping my portfolio above water.
Thanks for the USO directions today. Made it 3 times (up/down/up) for a very nice win.
I have definitely learned to take smaller wins early and be happy with that. Lately, I've aimed for $250 profit per day. Doing that daily/weekly x 48 weeks (assuming I take some time off) works out to 60k per year. That's a lot of money!! $250 moves happen all the time if you just wait for them.
PHIL: The most important lesson I have learned is how to hedge using SQQQ, SDS and TZA. A big thanks.
Newer member here, but just wanted to say thank you too. I've learned so much and I hope you'll be around for a long time helping us learn along the way.
I'm just starting my second year as a member, and I'd like to thank all of you for sharing your trading ideas and insight, and especially Phil of course for great all-around investing advice as well as trades! In addition to learning patience and profit-taking, I think one of the most important things I'm learning here is to stick to stocks and trades that suit my temperament. And wow, I had NO idea how hard it was to learn patience. I should say "practice" instead of "learn", because it seems to be a constant struggle. Phil, please keep reminding us how nice CASH is!
Took profit on QQQ 57 Puts, bot 40 at $0.07, sold 20 for $0.15 and 20 for $0.32. Thank, Phil
Thanks Phil, I have adjusted my position by getting rid of the IYF puts, and selling the FAZ puts. You have so many of these awesome little tricks in your playbook that it really amazes me. I toally love your analogy by the way: Do you want insurance that you have to pay for, or do you want insurance that pays you?
You may wonder if anyone gets anything out of you seminars (or may not wonder). Anyway, I almost never day trade because of my job. Today, I was home due to the snow and since I was behind by 2 weeks on watching your recorded seminars I though I would watch one of them. I set up my pivot point charts in TOS to match the ones in your seminar and made the QQQ trade from this morning. I only bought 5 puts. While I watched the seminar, I would pause then switch back and forth and watch the live QQQ chart. I ended up stopping out for a $170 gain, but it was pretty cool to have the dip and recovery at the same time I was learning the art of stopping out when a pivot line was taken out.
Phil/ I hope the next 5 year bear market will be as much fun and as profitable as this 5 year bull market. For those who survived 2008/2009, and who imbibed the wisdom of PSW, what a time it has been. Good to have you by my side. I think you are selling yourself short – you need to triple your prices :)
It is amazing how much confidence you engender, Phil………..I knew the 1% a day trades and repeated often were possible as I had done in stretches, and I knew kill zone trades were also possible and 5% to 10% returns per month were very possible with practice, experience and smart risk management all without having to take a lot of risk, but I guess I was talking to the disbelievers and since I have dropped them into my 'why bother to try to explain it' file and come over to the dark side at PSW I feel soooo much more content not only with the returns, but with the company and a comments and the obvious opportunity to learn and learn and learn some more.
It all helps the mental and emotional discipline of the trading too. So thanks again.
On Optrader's section yesterday he was asked how he works with AAPL as an investment. He replied that he just ‘plays with the covers'. I've got a separate portfolio where I use primarily this technique over the past 6 months. Up 60% The principles involved are stock selection, patience, patience, using covers to protect profits, rolling covers to maximize premium return, and exiting when covers are gone and stock price is high. Sometimes it's hard to remember where you learn to do this stuff, but much of it is from integrating principles I've learned here with thing I already knew. Thanks for the help on this, Phil and others.
Way back did 20 of your suggested short BP Jan 11 26 P @ 4.3 now .85 — sold half. this am —
paid for a years sub AGain!! thank you very much!
Started my membership in mid-Oct and have since then learned so much about options by reading the site's articles and postings, members' chats and suggested trades – as a bonus, the articles are entertaining as well! Phil's long-term investing strategy makes really good sense as I've seen its effect on my GLW positions.
Phil – thanks for sharing your knowledge of the market! I've worked as risk analyst for the investment dept of a $19B insurance company, and the scope and depth of your daily commentaries blows away what I have seen and heard from the PMs and even the chief investment officer! Most of all, I will continue to be a member because you have your priorities right (from my POV) – it's not all about money and power.
Last week, David Tepper, a billionaire hedge fund titan and president of Appaloosa Management remarked on CNBC …
Two things are happening. It’s that easy sometimes. Either the economy is going to get better by itself, in the next 3 months and what assets are going to do well? You can guess what assets will do well – stocks are going to do well, bonds won’t do so well, gold won’t do as well. OR The economy is not going to pick up in the next three months and the Fed is going to come in with QE. Right? Then what’s going to do well? Everything! In the near term – Everything!
Earnings vs. Share Prices
One might not be able to argue with Tepper’s past performance, but one sure can argue with his current logic. Stocks do not necessarily go up because earnings go up. Stocks rise or fall primarily based on sentiment.
Right now, sentiment is so bullish and earnings estimates so lofty there is room for hefty earnings expansion that falls short or estimates. Buying stocks that miss wildly optimistic earnings estimates is not likely to work out well.
Furthermore, even if earnings do come in on target, there is no historic guarantee that stock prices follow. For example, on March 31, 1973 the S& P was at 111.52 with trailing earnings of $6.80. Seven years later, on March 31, 1980 the S&P was at 102.09 with trailing earnings of $15.27.
Thus, over a span of seven years, earning rose 125% while stock prices fell 8.5%!
What happened? The PE ratio on the S&P fell from 16.40 to 6.68, that’s what.
Moreover, those were real earnings then. Now, corporations hide garbage in SIVs with the blessing of the Fed and analysts cite pro-forma earnings that throw out "one-time" charges that occur with increasing regularity.
Thus, anyone who says stock prices will go up because earnings go up, does not understand history. This does not make Tepper wrong, but it does make his argument fallacious.
What About Quantitative Easing?
Tepper also argues that everything will be good if the Fed falls back on quantitative easing. Really?
Regular visitors to dshort.com know I follow Howard Silverblatt’s earnings spreadsheet on the Standard & Poor’s website. Free registration is required to access this data. I’ve received several requests for more specific details on where to find the spreadsheet. It is fairly well hidden. Here are two links to help frustrated seekers: step one and step two.
I follow the "As-Reported" earnings and top-down estimates for future earnings (see column D in the spreadsheet). The chart below shows the higher estimates of future earnings from the most recent spreadsheet, dated August 24th, and three earlier spreadsheets (February 17th, April 28th, and July 15th).
The latest earnings estimate for 2Q 2010 is 67.20. Friday’s close gives us a P/E ratio of 15.84, which is close to the average trailing 12-month P/E of 15.48. Beyond the 2Q, the chart illustrates increasing optimism about next year’s earnings. The August 24th estimate of $80.20 for 4Q 2011 at today’s P/E would put the S&P 500 at 1,270 at the end of 2011. That’s a gain of 19.3% from the latest close.
But will as-reported earnings really live up to these estimates? Last month Howard Silverblatt pinpointed the problem for earnings in a Bloomberg article No Sales Means No Jobs Means No Recovery. His concluding remarks are worth repeating here:
I look to sales as a future indicator. On this basis, earnings are running ahead of Q1 2010, but sales are flat, and that’s the problem. It’s great that companies have improving earnings, but those improvements are due to high margins, which were the product of cost cuts — specifically job reductions, the very thing that we need to improve now. Until companies and consumers start to spend more, the job front will not get better, but they won’t spend more until they believe things are getting better. The stimulus programs were supposed to jump start the economy and break the downward cycle by convincing both groups that better times were here. But so far we’re not seeing the sales or the jobs; but earnings are good, at least for now.
Companies in the S&P 500 sell across the world. But consumption in the US, which remains critical for sustained earnings growth, has been undergoing a sustained contraction —, a fact that…
This excellent piece (below) was on Bloomberg yesterday and cites another bearish note from Gluskin Sheff’s David Rosenberg. It notes that the analyst community now expects 35% earnings growth for 2010. They go on to show that this has only happened 6 times in 75 years and has been accompanied by 10% GDP growth each time. In essence, the implication is that this recovery is entirely different and is unlikely to rhyme with these other robust earnings recoveries. This is accurate, but terribly misleading in terms of timing. Have a look here and continue reading below:
What Rosenberg and Bloomberg fail to be more descriptive about is the timing of these high estimates. As we have long noted with our expectation ratio and earnings analysis (which has been spot on) the analysts have remained far too bearish for the last year. Where the above analysis goes wrong is in bunching 2010 estimates together as a whole as opposed to breaking them down by quarter.
A closer look at these estimates is vitally important in positioning your portfolio for the coming few quarters. In our 2010 investment outlook we said we were bearish about H2 2010 partly due to the potential for overly optimistic earnings analysis. If you look at current estimates analysts are calling for just 2.7% sequential growth in 2009 Q4 earnings. For 2010 Q1 they are calling for just 1.9% sequential growth. In a nutshell, they expect earnings to be in-line with the last few quarters (which I believe is utterly naive and lacking in any real analysis worthy of paid employment). These estimates are almost certainly low. Where things get interesting is in the later quarters of 2010.
In Q2 analysts are calling for a big jump in growth to 11.3% sequentially and 33% year over year. The same goes for Q3 where they are currently calling for 7% sequential growth and 25% year over year growth. These are big numbers. $19.72 & $20.62 in operating earnings per quarter is essentially what the S&P was doing back in 2006 & 2007 when the economy was at record low unemployment and the banks were cranking their high leveraged ponzi scheme on all cylinders. Can we realistically return to such levels so…
Paul Meehl was a versatile academic who held numerous faculty positions, covering the diverse disciplines of psychology, law, psychiatry, neurology, and yes, even philosophy. The crux of his research was focused on how well clinical analysis fared versus statistical analysis. Or in other words, he looked to answer the controversial question, “What is a better predictor of outcomes, a brain or an equation?” His conclusion was straightforward – mechanical methods using quantitative measures are much...
Earlier today, investigative journalist James O'Keefe of Project Veritas released his second undercover exposé of the "DC Anti-facist Coalition," which is using hashtag #DisruptJ20 in their plot to disrupt the Inauguration and related events. After successfully infiltrating the anarchist Democrat movement, O'Keefe's team recorded "DisruptJ20" organizers ...
By The Foundation for Economic Education. Originally published at ValueWalk.
I don’t like tax increases, but I like having additional evidence that higher tax rates change behavior. So when my leftist friends “win” by imposing tax hikes, I try to make lemonade out of lemons by pointing out “supply-side” effects.
In the end, it was Theresa May and not Trump which saw the Russell 2000 cut through support and confirm the earlier 'bull trap'. This change coincided with a 'sell' trigger in +DI/-DI. Only stochastics are hanging on to its 'buy' signal.
The S&P experienced heavier volume distribution, but there wasn't a big percentage loss, nor was there a break from the consolidation range
The US Dollar has been moving higher for nearly a decade, as the trend is up. Could the trend be changing? Could King Dollar loose strength here? If King Dollar would turn lower, what opportunities will present themselves?
Below looks at a chart of the US Dollar over the past 30-years, on a “Monthly Hi/Lo/Closing” basis-
CLICK ON CHART TO ENLARGE
The US Dollar finds itself in an uptrend and testing the underside of dual resistance at (1). With the trend being up, if King ...
In January 2016, as the Chinese stock market was taking a dip along with the SP500, Fed officials made some choice comments. One year later we review..
"To me, it is not as surprising than maybe to some commentators that we're seeing a weaker data in terms of manufacturing. This seems to be part of a process that's been going on in the last couple of years. We have been seeing pretty good data out of China on consumer spending in some of the other areas, so I'm not as concerned about that." – Jan 4, 2016 - SF Fed President John Williams ...
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Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did.
In 2013, Mr. Brownback set out to create a lean, business-friendly government in his state that other Republicans could replicate. He now faces a $350 million deficit when the Kansas legislature convenes in January and projections of a larger one in 2018. The state’s economy is flat and his party is fractured...
Come join us for the Phil's Stock World's Conference in Las Vegas!
Date: Sunday, Feb 12, 2017 and Monday Feb 13, 2017.
Beginning Time: 8:00 am Sunday morning
Location: Caesar's Palace in Las Vegas
Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)
Note: The material presented in this commentary is provided for
informational purposes only and is based upon information that is
considered to be reliable. However, neither PSW Investments, LLC d/b/a PhilStockWorld (PSW)
nor its affiliates
warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only intended at the moment of their issue as conditions quickly change. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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