Phil/thankyou. Phil, I went over the recording of last weeks webinar. I liked it a lot and wanted to thank you. I thought the case studies (company reviews) were detailed, I learned more about selling puts process and also what happens if stock continues to go down after that, I liked the fact that we discuss so many different avenues like stocks, optiond, futures, oil, commodities etc… I replayed portions of it multiple times to make sure I was grasping it but wanted to say good job. Thanks…
Phil & Ephmen85: I hadn't thought about selling the covered calls. That should be the easiest strategy for me since I'm a beginner. Thanks a bunch!
Happy Thanksgiving Phil and to your family and associates. Also to all of the other fellow citizens of Phil's Stock World. I am particularly happy and thankful that I clicked on your article in Seeking Alpha a number of years ago. That opened the gate to Phil's Stock World and "being the house". My wallet thanks you as does my peace of mind in trading options, stocks and rarely futures. Your liberal views opened up my views—being a boot strapper (pulled myself out of a poor background) I was a CONSERVATIVE—cynical of others who weren't as driven. Now, I am much less so; you have taught me more than how to make money and manage risk. So, again I give thanks to you and the others of PSW!!
Phil: UNH, hedged stock position, doing great, up over 50 %,
I have been with this site since the beginning and i have learned more the past 3 years than the previous 10. Information and great commentary are abound. The traders on the site are second to none and my portfolio has benefited greatly.
Joined last year and and started profitably trading options thanks to everything I have learned here. THANK YOU!!
Thanks for you guidance – Your "student" will be passing on the McMuffins and having Lobster dinners tonight!
Nice call on the QQQ puts this morning Phil. I bought 10 at .13 this morning for fun day trade. Just closed at .95. Sweet hedge for the day!
Against all prognostics (bears) Phil pointed in the morning the correct direction, and in middle of day he pointed the possible move to 2.5% Incredible… I'm starting to serious believe on the program trading and the human nature behind the programing those "trade-bots".
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.
Phil – Not that you dont usually, but you have DEFINITELY earned your money this week. THe recommendations have been PERFECT. Selling into the initial excitement (MULTIPLE TIMES), hedges, everything. Im reading this when I get home from work and want to cry b/c I cant trade at work! I might have to start getting up at 3 AM though to catch those trades bc youre killing it then too! May you and yours have a blessed weekend!
Very nice in and out on those USO puts again, easy way to get the subscription covered in just a couple of hours.
Thanks again Phil and everyone here contributing to such intelligent and informative discussion! I have wasted countless hours reading "professional newsletters" and message board blather over the years. Have learned a great deal here in a very short time. I have sent out a number of invites to friends and family for stockworld!
Phil – I think I finally figured out your "crystal ball" time frame. You're about 5-14 days AHEAD of what the market is going to do. It's taken me a long time to realize this, but boy it's been profitable. I go in when you recommend something at about 25% allocation, and then add to it each day it "goes the wrong way" Then BOOM, one day it's all good…. The long put list was literally exact in it's timing.
PSW – Price/Value; The value of PSW on a regular basis exceeds by far the price of the annual subscription. The edition of February 26 'Which Way Wednesday – Popping or Topping?', – priceless for the serious investor.
Thanks to your teaching and guidance, I was able to make a killing on my /TF shorts. I averaged into 12 shorts at 1252 and got out of 6 at 1242 and 6 more at 1235. Last week I did the same with /CL, though I got out too early and left $2 on the table. Thank you!
Phil: I have 263 positions - 70% in options ( balance stocks) in three portfolios with a value of 3 mil. YTD profit is about $750,000. Thanks!
Phil I must say that it was really nice to have a portfolio that was looking very stable in the face of a rough day for the markets. I ended the day up 0.3% which includes another successful day of futures trading. So with a portfolio of mostly cash, a few of our faves like Apple and LL, JO, TOL, DIS, etc., along with a couple of hedges that paid off nicely today, and my futures trades, I never had to break a sweat during that madhouse today. Yes, by George (or Phil), I may be learning this system!
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
From following Phil I have opened up BCS and occasion will strangle some stocks. I will occasionally hedge using an ETF ultra. I have a big take down occasionally but so far I am way ahead of the S&P, and since buying into PSW some years ago by seeing Phil on Seeking Alpha I feel more confident in my abilities. FYI I am a retired entrepreneur formerly in the real estate and insurance businesses.
Hey Phil, Your HOV suggestion about 3 months ago basically paid for my Philstockworld subscription for years to come. My average cost is about $1.
Hi Mr. Phill, I am a Venezuelan lady tormented by our politicall situation, who use to be an emerging market trader, and many other executive positins in the finance "arena" and now is trying to built a new concept and service for asset management for clients on my own, I am in the trial and learning process at the moment, I also invest for some friends and myself. I want to congratulate you , because reading you fill my days with a touch of irony (besides ,of course the spectacular market insight) that happens to give me energy, its a joy the remarks and comments even the pictures used, sometimes I just read it for the fun, I completily agree with your thouhts, though we belong to totally different cultures and enviorements and certanly realities Your readings is like a little hand helping me out to be in the market and fight for my devastated country where every single day we looe inches and yards of liberty. You shoul try to writte a book!
Your board has been fantastic helping the less experienced (includes me) navigate through all the turmoil. The contributions from your members has been well rounded, objective, and extremely helpful. Sans the politics you have built a fantastic community and that is a tribute to you. I thank you and all fellow members for there contributions over the past few days. Fantastic group!
Thanks for the USO directions today. Made it 3 times (up/down/up) for a very nice win.
Phil – great calls this past week, esp. friday and monday. in the old days I would have let Prechter et al scare me into trimming my longs and going short at just the wrong time. your feel for the markets is Tiger-esque. CHK, HOV, BX, TLT and XLF are big winners for me today. My biggest up day in a long time. Thanks!
Phil is a fundamentalist to his fingertips. His ability to value a stock goes well beyond p/e, as he understands the essence of many businesses, what gives them value and how they make their money. As such, his recommendations are invaluable to a investor who takes a value-oriented approach.
Killed it tonight trading copper. Anyone who jumped in right after election is up about 75k on one contract!
Phil / TNA – On Monday you put out the TNA BCS 41/47. As I mentioned I work during market hours so on Tuesday morning on my way out the door (premarket) I put in an advanced TOS '1st trigger sequence' order to fill the BCS. I can control the entry using this method vs. the vertical entry that TOS allows for the BCS. I filled the June 41 long call but never filled the 47 short call. I let that ride into today. OMG ..TNA popped 7.5%!… the $3.60 entry is almost a double! Tomorrow will be a OCO bracket to get out of TNA before Ben speaks. I should be able to preserve 85% – 100% on the trade. For the income portfolio plays in my IRA's, doing very well… I do like collecting premium! Well done and thanks!
Gel1…..I've been here 6 months, mostly watching and learning. Lots of smart people on the site and I've learned a lot from Phil and many others. //// Inflan - I have to trump your sentiments regarding the wisdom of the board. I have to thank Phil and the many contruibutors for a 80% profit for 2009. I have learned a lot and am still learning ( even occasionally about political issues - ha! )
Iflantheman & Gel1
SPY/Phil, I took a big swing on January 26th following your advice to another member and bought 1615 contracts of Mar 185/190 BCS on SPY that will expire ITM today paying $290,700 on the $500k bet. I thought it might be fun to see what a winning trade looks like. Great call on your part and looking back it seems pretty obvious.
Phil: I am always able to figure out your trades, including the rational when put in the right context of previous comments, etc. Keep doing what you're doing. It is much appreciated, and invaluable. Your hit rate of successful trades has been very high in my 1.5 months as a member, but even more importantly is your teaching of how to repair and DD positions that haven't gone your way yet. As with most members, we all have our ‘pet' trading interests, and learning how to think about trading is much more important than a specific trade, which could see the conditions behind it change an hour later. This is the classic case, of ‘Teach us to Fish', rather than just giving us a fish once in a while. Thank you!
Theory: the dumb money (that’s us) has left the party leaving the bots (smart money) to pass the stocks back and forth between themselves. And to mix metaphors, the bots act like a herd all pretty much stampeding one way or another. While retail investors seek not to get trampled another time. – Ilene
The stock market has turned into a schizophrenic herd of sheep. Correlations have entirely converged in recent months as money simply flows from bullish to bearish depending on the current mood of our bi-polar friend. Jeff Saut of Raymond James says it is in large part due to the small investor throwing in the towel:
“The chart on page 3 shows the correlation of S&P 500 stocks to the S&P 500 Index. Studying the chart one finds that the correlation from September 2009 through early May 2010 ranged between 55 – 65. However, following the May 6th “flash crash” the correlation leaps to ~78 and eventually ~82, which is indeed the highest correlation since the 1987 crash. So what caused this fairly rare event? In my opinion it is because the retail investor – disgusted with high-frequency trading, dark pools, trading huddles, inter-market sweep orders, etc. – simply left the game, leaving the “pros” to trade among themselves. Obviously, when the alleged “dumb money” left the party correlation had to rise. Adding to the situation has been Exchange-Traded Funds (ETFs). To wit, when volume increases in say the Powershares Consumer Discretionary ETF (PEZ/$21.08), that ETF automatically goes in and buys ALL 60 of the mid-cap stocks within the fund. Plainly, that causes correlation to rise.”
I think it’s even simpler than that. This is classic herd mentality. The entire herd is either all grazing or all running scared at the same. Currently, the herd is grazing happily with not a care in the world. But don’t be fooled – when something spooks them you’ll get trampled if you don’t run with them…..
In today’s segment of bull versus bear we pit a bullish Jeff Saut against an ultra bearish Nouriel Roubini. Mr. Saut, who helps oversee $235B at Raymond James, says there is not a whole lot of downside to U.S. stocks and that there is a “bubble in pessimism”. Roubini, on the other hand, believes we are on the verge of a double dip.
Interesting commentary from Jeff Saut, Chief Equity Strategist at Raymond James this morning on the old investment saying “sell in May and go away.” Mr. Saut believes investors should be selling before May in anticipation of what other investors might do:
“Obviously we have modified that old axiom this morning given our statement – “Don’t wait for May to go away!” Nevertheless, despite having been too soon’ly cautious since S&P 1150 – 1160, which is tantamount to being wrong, we are “stepping up” our cautionary counsel this week.”
Saut’s cautious tone is driven by a series of technical and sentiment factors that are often followed by weaker market action:
“Our increased caution is driven by a number of metrics. To wit, preliminary data suggests last Friday was the first 90% Downside Day since February, our sentiment gauges are back to as bullish as they were in 1987 (read that bearishly), the CBOE equity put/call ratio is at 0.32, for its heaviest “call volume” relative to “put volume” since August of 2000, stocks are the most overbought since the rally began in March 2009, some of the leading stocks are not responding to good news, Thursday was session 34 in the “buying stampede” that began on February 26th (rarely do such skeins last more than 30 sessions), we’ve gotten that peak-a-boo “look” into the long envisioned target zone of 1200 – 1250, volatility is back to the complacent 2008 levels, and the list goes on.”
But that doesn’t mean Saut is turning full-blown bearish. He still sees upside in the market following a near-term correction:
“As for the ‘here and now,’ we are increasingly cautious, believing a near-term “top” in the equity markets has been registered. Longer-term, we remain bullish, thinking the profit-cycle recovery is alive and well. To that point, it’s worth considering that bottom-up operating earnings peaked in 2007 at ~$91 per share for the S&P 500 (SPX/1192.13). And, except for Japan, price-to-peak earnings power (PPE) has always made new highs, cycle after cycle. Again, as the good folks at GaveKal note, ‘Except during the bubble years of 1997 – 2001, the PPE for the SPX has fluctuated in a range of 10x to 20x (peak earnings);
Raymond James strategist Jeff Saut continues to present a cautious tone in his first research note of the year
Last Monday we wrote, "As we enter the New Year, we are once again turning cautious because the Treasury market is breaking down (higher rates) and the U.S. dollar is rallying. . . . Therefore, we think it prudent to ‘bank’ some trading profits and hedge some investment positions as we approach the new year."
Moreover, one of the lessons we have learned is that the beginning of a new year is often punctuated with head fakes, both on the upside as well as the downside. One of the greatest upside head fakes was in January 1973 when in the first two weeks of that year the DJIA rallied to a new all-time high of 1051.70 before sliding ~20%. While we are clearly not predicting that, what we have indeed experienced since the March "lows" is the second greatest percentage rally (69%), adjusted for time (nine months), since the 1933 rally. Following that 1933 explosion of 116% in just five months came a pretty decent downside correction. Since we tend to be "odds players," prudence suggests some caution is again warranted.
“we think the upside should continue to be driven by ‘game theory,’ which suggests that the under-invested institutional portfolio managers have to buy stocks into year-end driven by their under-performance, their subsequent ‘bonus risk’, and ultimately their ‘job risk.’ Verily, many of the portfolio managers we know remain under extreme pressure to commit their outsized cash positions in an attempt to ‘catch up’ to their benchmarks between now and year-end (see the nearby Credit Suisse institutional cash versus retail cash on the sidelines chart).”
“As the S&P 500 traded out to new reaction ‘highs’ in the first part of last week we heard a cacophony of crybabies. First was Meredith Whiney, banking analyst now turned strategist, who stated, ‘I have not been this bearish in over a year!’ One-upping her was Nouriel Roubini who exclaimed, ‘The worst is yet to come’….Despite such cantankerous cries, we have indeed entered the strongest seasonality of the year and we remain constructive. As the sagacious Bespoke Investment Group writes, “Since 1941, the Dow has averaged a gain of 0.50% in the week before Thanksgiving.” That said, we would not like to see the S&P 500 break below 1083. And speaking of breaking down, the Japanese stock market is breaking down and we are close to ‘uncle points’ on those recommendations.”
How does Saut recommend playing the year-end rally? Saut has been mindful of the recent divergence between large caps and small caps. He believes the trend will continue as breadth narrows and investors reallocate capital from the best performers to a bit of more defensive posture. This means large caps will outperform. In particular, he likes pharma stocks:
Maybe Joshua Brown's quite period is over? He did at least emerge from his vacation to post Proudly Permabullish, which is a reminder to look at the stock market between reading depressing news articles from me. (5-year S&P 500 chart from Yahoo.)
New discoveries about the human mind show the limitations of reason.
By Elizabeth Kolbert
In “Denying to the Grave: Why We Ignore the Facts That Will Save Us” (Oxford), Jack Gorman, a psychiatrist, and his daughter, Sara Gorman, a public-health specialist, probe the gap between what science tells us and what we tell ourselves. Their concern is with those persistent beliefs which are not just demonstrably false but also potentially deadly, like the conviction that vaccines are hazardous. Of course, what’s hazardous is not being vaccinated; that’s why vaccines were created in the first place. “Immunization is one of the triumphs of modern medicine,” the Gormans no...
US stocks finish at record high. Gold and silver at multi-week highs. Bitcoin near all-time high. Trump national security adviser scandal evolving, EPA chief controversy ramping up after email release. Debate over Putin and fake news intensifies.
As the Trump presidency unravels, unraveling the country along with it, there is no real political antecedent, no lessons from American history on which to draw and provide guidance. We are in entirely uncharted waters.
But there is an antecedent in our popular culture that provides a prism through which to view the contemporary calamity, especially the alleged collusion between Trump’s henchmen and Russian intelligence to deny Hillary Clinton the presidency. I am not the first observer who has ...
Reminder: OpTrader is available to chat with Members, comments are found below each post.
This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.
To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here
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.
Site owned and operated by PSW Investments, LLC. Contact us at: 403 Central Avenue, Hawthorne, NJ 07506. Phone: (201) 743-8009. Email: email@example.com.