Monday Market Workshop – Portfolio Repair Part 1 – Damage Assessment

The virus rages on.

US infections have jumped from 85,996 on Friday, when we had just passed China, to 143,055 as of 6:11 this morning and that's up 66% in two days.  Globally, there are 735,650 infections with 34,686 deaths and 154,673 recoveries so, to date, 18.3% of the outcomes are – DEATH!!!  No, I don't think it's funny – I want to emphasize that so people, HOPEFULLY, will stop risking their lives to go on a beer run or whatever other silly thing you do that you don't have to do – this is serious people and it remains serious.

On the other hand, as I have pointed out before, 7,708 people die every day in America from all sorts of things but mainly cancer or heart conditions so 2,500 dead (so far) in the US is just another manic Monday morning as far as it's effect on the economy.  What matters is how soon we can get things under control as they are currently still clearly OUT of control as our hospitals are being overwhelmed (leading to more deaths) and supplies are running short.

Trump is right, this is like a war but it's a war we are clearly losing despite Trump telling us:

  • Jan 22nd - “We have it totally under control. … It’s going to be just fine
  • Jan 30th – "We think we have it very well under control. We have very little problem in this country at this moment — five. And those people are all recuperating successfully. But we’re working very closely with China and other countries, and we think it’s going to have a very good ending for it. So that I can assure you.” 
  • Feb 24th – "The Coronavirus is very much under control in the USA. … Stock market starting to look very good to me."
  • Feb 26th - “And again, when you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that's a pretty good job we've done."
  • Feb 28th - “It’s going to disappear. One day, it’s like a miracle, it will disappear.”
  • March 2nd - "We had a great meeting today with a lot of the great companies


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  • 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!

    Jromeha

  • I love volatile days like this when you can make a bunch of money on these big swings. As long as you have Phil on your side calling the bottoms and the tops of course.

    craigsa620

  • I like the retirement picks too. The futures trading is certainly more sexy, but the boring retirement picks are the ones that consistently make me money.

    jjennings

  • TBT - Many thanks, Phil. I join you in your opinion favoring the Jan expirations. That's a great play. I can never thank you enough for what I have gained educationally as well as monitarily. Here it is late Sunday evening and I am able to get world class advice, just by asking for it. I feel like I am staying in a 5 star hotel, and room service is just a telephone call away!

    Gel1

  • I am not a user of phil's site now, but was for a couple years. His advice and information is excellent. Perhaps even better, you get access to real-time trades of additional traders on his site (OptTrader, etc) and the other members who post what they are buying and selling. Overall, its a very valuable information tool. Expensive, but paid for itself many times over. I did not renew my membership because I switched jobs and did not have time to trade nearly as much.

    XRTrader

  • Thank you Nantucket. It is hard to be a complete beginner in the market with this complicated, fast moving, and very advanced group. Phil is the Great One, but the membership is absolutely amazing! Had I known this ahead I would probably log in as "awe struck" everyday.

    Coke

  • Phil - I celebrate today, having reached my goal for the year, trading in sync with your education and guidance, of 1 million in profit. I learned a lot, achieved much, and am profoundly grateful. To be honest, when I set the goal I thought it was daunting, as I have for many years been an investor in equities but did very little with options. Learning and doing has for me been a blast! I reached my goal by following Phil's strategies - lots of Buy/Writes, covered calls on equities , naked put entries for income production. I did it with 2.5 mil and kept 600,000 in cash in case I got in trouble. I concentrated on stocks (many of my own choosing) that had decent dividends and wrote front month calls against (OTM) which has worked well in this market run. 25% of my gain is in dividends and premium selling, with the balance in appreciation.

    Gel1

  • Phil, have to thank you for saving me today. I think the discipline I have learned from this site has helped me as much if not more than the actual picks.

    Rustle123

  • 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.

    1234gel

  • Phil, thanks for the webinar and options subject…I wasn't shown as attending but I was there for most of it. Your memory amazes me, your speed on the computer amazes me, your math skills blow me away. coke

    Coke

  • Phil I have been applying your arsenal (matresses, Edz plays, Ugl verticals etc.) to my gold holdings . So a big thank you for "teaching me how to fish" rather than just giving me the fish...

    Magret

  • thanks for the DNDN recommendation last week phil. that was moneeeee….

    Kwan

  • 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!

    Neverworkagain

  • Great calls this week!

    SNS1

  • Phil, I just wanted to say thanks for being there. The world needs more of you. Your site continues to positively change my life daily.

    Chasw

  • Phil thanks. You never cease to amaze me with your thoughtful perspective on a myriad of different issues and challenges. It's kind of an embarrassment of riches since I joined this board a few years back. The ride from Dow 9,000 or was it 8,000? up to Dow 15,000 seems hard to believe. I wish I could have it all over again, except with the capital I have now.

    Winston

  • I can't believe it. After 2 Months of reading every post of every section on this site, the light bulb finaly went on. I was begining to think this was beyond me capacity to understand. Thanks Guys. Specifically Phil, Pharm, Cap, Matt. Im still Green as a leprechaun but I pulled the trigger on that SRS Vertical you laid down yesterday Phil. Very Clever. Now if I can just figure how to roll I migh make some money. Thanks for sharing, This community you have here is quite remarkable.

    Zucko

  • Phil, Passed a milestone today since joining 2 months ago. 25% of my account is in buy/writes, bull call spreads and disaster hedges. A majority of the trades were taken directly from your ideas or someone else`s contributions. Some were daytrades that became spreads. That part of my account is up 30% as of today. I don`t worry about it, or mess with it much, did a few rolls etc. Rest of the account is there to day trade, cover the writes and take advantage of opportunities. Thanks to everyone who contributes here, what a sweet way to trade, so many opportunities.

    Ben1Be

  • 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!

    JFawcett

  • 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?

    Craigzooka

  • Phil – Great calls yesterday, you were in top form. As I was reading your postings, I had hindsight of what the day brought. The calls were uncanny!

    Jfawcett

  • 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!!!

    Zeroxzero

  • What a quarter! (AAPL, etc.) "People react; PSW'ers anticipate." Thanks everyone for a vibrant board.

    Silentstorm

  • Phil: UNH, hedged stock position, doing great, up over 50 %,

    RMM

  • 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.

    DB

  • Thanks for the USO directions today. Made it 3 times (up/down/up) for a very nice win.

    Doro165

  • 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.

    Winston

  • We are lucky to be in America and it is great to be part of the PSW tribe. Keeps me thinkin' and gatherin' the profits. ~ 42 % gain in my trading account year to date, which keeps me happy. Half to a third of the trading account is reserved in margin capacity that Is not committed. So, again thanks Phil and all of you other members.

    Newthugger

  • I have been here a year, and made most of my money back from the 14K fall. The people here are more than willing to help whe Phil cannot get to it. FWIW - This site is my brokerage firm, I was with Wells Fargo Portfolio and it was costing a fortune to trade, the costs here are more than offset with the data, trade ideas and profits you should make.. and I get a chuckle out of Cap and Phil's rantings on healtcare, guns, oh, yeah, and government….

    Pharmboy

  • 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.

    Skasiah

The world before this coronavirus and after cannot be the same

 

The world before this coronavirus and after cannot be the same

Gettyimages

Courtesy of Ian Goldin, University of Oxford and Robert Muggah, Pontifical Catholic University of Rio de Janeiro (PUC-Rio)

With COVID-19 infections now evident in 176 countries, the pandemic is the most significant threat to humanity since the second world war. Then, as now, confidence in international cooperation and institutions plumbed new lows.

While the onset of the second world war took many people by surprise, the outbreak of the coronavirus in December 2019 was a crisis foretold. Infectious disease specialists have been raising the alarm about the accelerated pace of outbreaks for decades. Dengue, Ebola, SARS, H1N1, and Zika are just the tip of the iceberg. Since 1980, more than 12,000 documented outbreaks have infected and killed tens of millions of people around the world, many of them the poorest of the poor. In 2018, the World Health Organisation (WHO) detected outbreaks of six of its eight “priority diseases” for the very first time.

No one can say we weren’t warned.

Even as we attend to the countless emergencies generated by COVID-19, we need to think deeply about why the international community was so unprepared for an outbreak that was so inevitable. This is hardly the first time we’ve faced global catastrophes.

The second world war reflected the catastrophic failure of leaders to learn the lessons of the 1914-1918 war. The creation of the United Nations and Bretton Woods institutions in the late 1940s and early 1950s provided some grounds for optimism, but these were overshadowed by the Cold War. Moreover, the Reagan and Thatcher revolutions of the 1980s rolled back the capacity of governments to address inequality through taxation and redistribution and governments’ ability to deliver health and essential services.

The capacity of international institutions to regulate globalisation was undermined precisely at a time when they were most needed. The 1980s, 1990s and 2000s were a period of rapidly rising cross-border movements of trade, finance and people. The accelerated flow of goods, services and skills is one of the principal reasons for the most rapid reduction of global poverty in history. Since the late 1990s,…
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While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writing, some doomsayers have even wondered whether bitcoin will soon spiral back into three figures.

To add to the gloom, these shifts have broadly mimicked those of stock markets as investors first panicked about coronavirus only to be somewhat reassured by the US government’s US$2 trillion fiscal stimulus package to reactivate the economy. This similar pattern has cast doubt on a common belief in the cryptocurrency industry that these assets would act as a “safe haven” during a downturn by moving in the opposite direction to the market as a whole. For many crypto-enthusiasts, this was one of the main attractions to buying these currencies.

Bitcoin vs S&P 500

bitcoin = blue; S&P 500 = red. Trading View

Yet while this has been unfolding, a more encouraging trend has attracted much less attention. Having banned cryptocurrencies in the past, or refused to acknowledge them as money, various countries have suddenly started recognising them in their financial laws and courts. This could well mark an important shift for these digital assets towards the mainstream.

Starting guns

The motivation for these shifts has been new global standards for anti-money laundering and counter terrorism set by global watchdog the Financial Actions Task Force (FATF). The rules provide a useful know-your-customer/anti-money laundering framework for cryptocurrency transactions which did not exist previously and were the reason why many countries did not allow them.

On February 26, a French court ruled that a loan involving bitcoin was a consumer loan. This meant placing bitcoin in the same bracket as money and other financial assets in…
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Stimulus package will remain half-baked unless local governments get more of the dough

 

Stimulus package will remain half-baked unless local governments get more of the dough

People still need baked goods even during a lockdown. Frederic Brown/AFP via Getty Images

Courtesy of Stephanie Leiser, University of Michigan

Lawmakers are pinning their hopes on a US$2 trillion package to prop up the U.S. economy and provide relief to individuals and business ravaged by the coronavirus.

The stimulus is expected to pump $150 billion in aid to state and local governments. But with nearly 40,000 local governments across all 50 states, the money will be stretched thin and is likely to run out quickly. Many local officials are already bracing for severe budget shortfalls and mid-year cuts.

I study the fiscal health of local governments, and believe the federal government will need to do much more to provide relief to local governments in this crisis.

To understand why local governments are in such a vulnerable and precarious position as this pandemic-induced economic crisis begins, consider this analogy: local governments as “bakeries.”

Self-rising costs?

Imagine you are a bakery owner in a small town. The coronavirus pandemic has caused everything to shut down, but you get a call from your local school principal asking if you’ll give out free loaves of bread to local kids in need of meals. So you continue baking bread even as revenues from paying customers dry up.

As the weeks go by, you worry more and more about running out of cash. You consider a bridge loan but realize that’s not allowed – these “bakeries” are supposed to keep their budgets balanced. If revenues fall unexpectedly, they have to cut spending, hike prices or maybe dip into their reserves – if there are any.

Increasing prices is not feasible because your customers are in no position to pay more and, in in this analogy, would certainly vote against it. And you can’t cut production because you know the community depends on your bread. Reducing expenses will be tough because most of your costs are labor, and you don’t want to lay off employees or cut their wages. Oh, and you still have the mortgage to pay.…
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Fallback Friday – US Passes China to Become Most Infected Nation

Why the COVID-19 death rate varies dramatically from country to ...85,996!  

That's how many infections there are in the US as of 6:49 this morning and China has 81,897 so we blew right past them – even though we had 3 more months to prepare than China did and we were certainly not taken by surprise – other than our President, who asked us "Who could have seen this coming?"  

It was way back on January 22nd when we had the first US case of the coronavirus.  I noted it in our Morning Report saying:

One thing that's distracting everybody at the moment is the Chinese virus scare, with 50% more cases today than there were yesterday (now 470) so no, it's not at all under control.   The US case that panicked our markets yesterday was from a guy who was in China recently and it does seem to be contained (so far). 

In drugstores and at airports, and on the online marketplaces increasingly at the heart of Chinese commerce, fear and confusion manifested themselves in shortages or long lines for suddenly scarce products promising protection from the deadly but still largely mysterious respiratory disease.  Surgical masks flew off shelves, travelers canceled plans and rumors flooded social media.   Drug makers are doing well, travel stocks are doing poorly.  

The very next day, we initiated our first virus hedge because that is what you are supposed to do when you come across economic uncertainty and want to protect your portfolios.  What we didn't count on, however, is that two months later, the US would still be totally unprepared for its own viral epidemic or that our President would spend more time in denial than in meetings about controlling the virus.  Rather than lead us through this crisis, Trump made 33 false claims about the virus in the
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The PhilStockWorld.com Weekly Webinar – 03-25-2020

 

For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here.

 

Major Topics:

00:01:40 – 5% Rule
00:13:09 – COVID-19 Update
00:22:39 – S&P 500 | GDP Growth
00:30:00 – Market Collapse
00:34:42 – Trading Techniques
00:44:03 – 10 Trade Ideas
01:03:26 – STP
01:04:24 – LTP
01:09:11 – Market Crash
01:10:46 – VIAC
01:19:52 – MU
01:26:11 – AAPL
01:31:04 – PUT Sales | VIX
01:31:47 – STP
01:35:39 AAPL in Butterfly Portfolio
01:39:38 – Butterfly Portfolio
01:40:21 – LTP

Phil's Weekly Trading Webinars provide a great opportunity to learn what we do at PSW. Subscribe to our YouTube channel and view past webinars here. For LIVE access to PSW's Weekly Webinars – demonstrating trading strategies in real time – click here to join us at PSW!






 
 
 

Kimble Charting Solutions

Tech Testing 9-Year Support, With Fear Levels At 2009 Highs!

Courtesy of Chris Kimble

Is an important Tech Index sending a bullish message to investors? It is making an attempt!

Does that mean a low in this important sector is in play? Humbly it is too soon to say at this time!

This chart looks at the Nasdaq Composite Index over the past 25-years on a monthly basis.

The index has spent the majority of the past 9-years inside of rising channel (1), as it has created a series of higher lows and higher highs. It created bearish reversal patterns in January & February as it was kissing the underside of the top of the channel and...



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Zero Hedge

Gold Is Now "Unobtanium"

Courtesy of ZeroHedge View original post here.

By now it becoming clear to many that demand for precious metals, as the world 'turns', is far outpacing supply as major gold suppliers and sellers exclaim "there is no gold."

One glance at APMEX pages and two things are immediately clear:

1) There is no gold or silver....

2) And if there is, the premium for physic...

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Insider Scoop

Amazon Warehouse Workers Plan Monday Walkout To Protest Lack Of Coronavirus Protection

Courtesy of Benzinga

Amazon.com Inc.'s (NASDAQ: AMZN) workers at the company's Staten Island warehouse are planning a mass walkout on Monday to protest against what they call a lack of protection provided during the novel coronavirus (COVID-19) pandemic.

What Happened

Anywhere between 50 to 200 workers are expected to participate in the walkout, Christian Smalls, as assistant manager at the New York...



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Phil's Favorites

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



more from Our Members

Biotech/COVID-19

The world before this coronavirus and after cannot be the same

 

The world before this coronavirus and after cannot be the same

Gettyimages

Courtesy of Ian Goldin, University of Oxford and Robert Muggah, Pontifical Catholic University of Rio de Janeiro (PUC-Rio)

With COVID-19 infections now evident in 176 countries, the pandemic is the most significant threat to humanity since the second world war. Then, as now, confidence in international cooperation and institutions plumbed new lows.

While the on...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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The Technical Traders

These Index Charts Will Calm You Down

Courtesy of Technical Traders

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you ...



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Chart School

Cycle Trading - Funny when it comes due

Courtesy of Read the Ticker

Non believers of cycles become fast believers when the heat of the moment is upon them.

Just has we have birthdays, so does the market, regular cycles of time and price. The market news of the cycle turn may change each time, but the time is regular. Markets are not a random walk.


Success comes from strategy and the execution of a plan.















Changes in the world is the source of all market moves, to catch an...

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ValueWalk

Entrepreneurial activity and business ownership on the rise

By Jacob Wolinsky. Originally published at ValueWalk.

Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upwards over the past 19 years, according to the 2019/2020 Global Entrepreneurship Monitor Global Report, released March 3rd in Miami at the GEM Annual Meeting.

Q4 2019 hedge fund letters, conferences and more

The Benefit Of Entrepreneurial Activity ...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.