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Which Way Wednesday – Russell 1,600 Edition

Is this rally real?

As you can see from our Big Chart – we're just above the 200-day moving averages, which was our goal for this rally – on all but the Russell 2000, which is at 1,574 in the /RTY Futures and we need them to confirm by getting over the line at 1,587 but we'll want to see 1,600 before we feel comfortable and we are expecting the Russelll to lead us – up or down, for the rest of the week as more and more small caps report their earnings.

We had an in-depth look at /RTY in yesterday's Live Member Chat Room where we concluded:

So, that being the case, we would expect the 5% Rule to be obeyed between 1,440 and 1,800 which is 360 points so 72-point bounce lines to 1,512 (weak), 1,584 (strong), 1,656, 1,728 (weak retrace – where we failed before) and 1,800.  So expect good resistance at 1,584 and no more than a strong retrace of that run from 1,440 (if we're bullish)  which is 144 so 29(ish) down to 1,555 (weak retrace) and 1,526 and we'll see how that goes:

In other words, our 5% Rule™ predicted a run to 1,584 and now the 200 dma is 1,587 so we're pretty confident taking a short up here with very tight stops over the line that risk a loss of $5 per point, per contract so let's say we call 1,580 the shorting line and 1,590 the stop (though I would add another short at 1,586 to average 1,583) so the risk would be losing 8 points over 1,590 ($40 per contract) and our pullback goal is 1,555, which is 25 points (from our initial entry) for a $125 per contract gain and possibly 1,526, for a total of $270 per contract at that level.

The reward potential, in this case, outweigh the risk so we make the play.  Sometimes we are right  and sometimes we are wrong but, since we can make 3-6 times more when we're right than we lose when we are wrong – we don't have to be right more than half the time to do very well!  

Image result for stock market crystal ball

Remember:  I can only tell you what is likely to happen and how to profit from it – the rest is up to you!  

We're also finally getting a move back up in our long-standing play on Naturaly Gas Futures (/NGV19) and we're still miles and miles from our $3.50 goal (up $8,000 per contract from here) but a quick $1,000 gained per contract so far is very nice and our simple premise here is that we think there will be more and more LNG exports which put more and more pressure on inventories as the year progresses and, over time, the global Natural Gas Market will stabilize somewhere around $4.50 and, for the US, that's up a lot higher and, for the rest of the World, down a lot lower as LNG turns Natural Gas into a Globalized Commodity.  

Back on Feb 7th, when /NG was bottoming and we took full advantage, one of our Members asked for a non-Futures way to play Natural Gas long and I suggested the following:

/NG/Robert – Well I'd go with CHK as UNG decays too much and it could be a while before they come back.  CHIK does $9Bn in business and makes $800M but you can buy the whole company for $2.3Bn, less than 3x earnings.

Unfortunately for them, they began acquiring more oil assets and that's about 40% of their revenues now – so that's been hurting them recently but they just completed a $4Bn acquisition of WRD to get even more oil at what I HOPE was a good bottom call.  

As a new trade on CHK, I'd go for:

  • Sell 20 2021 $3 puts for $1.10 ($2,200) 
  • Buy 30 2021 $1 calls for $1.60 ($4,800)
  • Sell 30 2021 $3.50 calls for 0.55 ($1,650)

So that's net $950 on the $7,500 spread that's $1.50 ($4,500) in the money to start and not far to go to make the full $6,550 (689%) at $3.50 and the worst case is you own 2,000 shares at about $3.50.

CHK has made little progress so far so it's still playable.  As of yesterday's close, the $3 puts were $1.03 ($2,060) and the $1 calls were $1.86 ($5,580) and the $3.50 calls were 0.66 ($1,980) so net $1,540 is up a quick $590 (62%) in two weeks but still another $5,960 left to gain at $3.50 and that's a 387% potential gain – even if you are coming into the trade 2 weeks late because you wanted to save $3/day by not subscribing to our Newsletter!

We get the Fed Minutes at 2pm today and they are the minuts of the Jan 30th meeting, when the Fed reversed course on rate rises – so this should be interesting.  The next meeting isn't until March 20th and there will be 6 more meetings after that and I still expect at least 2 1/4-point increases – despite what they say. 

The Fed's Mester saved the markets yesterday as she said the "Fed should not end balance sheet unwining this year" and then Trump said he was no longer firm on March 1st for a China deadline on a trade deal and that's how the Dow recovered 100 points into yesterday's close.

The big news of the morning is UBS (UBS) being fined $4.2Bn in France for helping their wealthy clients evade taxes and I doubt very much that will be contained to just UBS – or to France, so take the Financials with a grain of salt in the near-future.  

Meanwhile Tesla (TSLA) has lost another General Counsel as Dan Butswinkas is bolting after just two months on the job – possibly because Musk once again tweeted out what a casual observer would call an SEC violation, saying: "Tesla made 0 cars in 2011, but will make around 500k in 2019" which he then revised to "Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k." as his lawyer ran screaming for the exit.

Part of Musk's settlement with the SEC from the last time he used Twitter to manipulate the price of his stock was that TSLA would create a system for monitoring Musk's statements to the public about the company.   This series of events has had the opposite effect as the stock is now down 2% pre-market.

While Trump may have extendted the China deadline, Tesla's bondholders are not likely to be so generous with the March 1st Bond Deadline where $920M worth of debt is due unless the stock is over $360 – in which case it converts to stock.  While the March tranche is the most immediately due, it's not the largest of Tesla's outstanding debt. Some $1.3Bn and $977M of convertible coupons are due in 2021 and 2022, respectively, and $1.8Bn of traditional bonds due in 2025 are currently outstanding, according to data compiled by Bloomberg.

According to their recent report, TSLA has $3.6Bn in cash at the moment and Musk is talking about production doubling by the end of the year and they've dropped $200M to the bottom line in Q3 and Q4 so figure over $1Bn in profits this year means they should be able to service it without resorting to this sort of nonsense – assuming the books aren't cooked….

 


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  1. Good Morning!


  2. Morning All!

    FYI.. We will not be having our usual webinar today. 



  3.  Tesla  General Counsel Dane Butswinkas is leaving the company after just two months on the job, according to The Wall Street Journal. Mr. Butswinkas' departure is the latest addition to Tesla's widely-profiled high turnover rate. Mr. Butswinkas said he will be returning to his law firm in Washington, DC. 


  4. Phil – would it make sense to do a new trade on NRZ here buy at 16ish and sell the $15 calls and the $17 puts — or better to wait to see if it pulls back a bit more

    thanks


  5. Good morning!  AAPL heading  higher is giving the Nas a boost (and the others) 

    Investors Want Apple to Do a Big Acquisition, JPMorgan Says

    By "investors" they mean JPM and by "acquisition" they mean "pay us a huge fee"  

    Trump has finally taken full control of the AG's office.  Now we'll see if these guys are really willing to bend the law for him….

    White House Picks Jeffrey Rosen for Deputy Attorney General

    Not much else very exciting, kind of a slow week.

    Europe Resists U.S. Effort to Bar Huawei From Market

    Fed’s Mester Sees Rates Slightly Higher This Year

    Gannett’s Loss Widens as Ad, Circulation Revenue Fall

    Markets Warm to the Prospect of an ECB Funding Boost for Banks

    The Morning Ledger: How Royal Caribbean Gained Ground in China

    Uber’s Revenue Growth Slowed in 2018

    Facebook Could Pay Billions Over Privacy. Investors Aren’t Too Worried.

    Kim Jong Un Purges Wealthy Elite and Opponents of Outreach to U.S. -  Some 50 to 70 people exiled, jailed or executed as leader looks to silence critics and target moneyed elite with asset seizures, says report

    I guess that's a good sign that he's serious about having peace talks! 

    Related image


  6. Today is a good day to roll Jan 20 CVS long calls to jan 21 long calls and sell Jan 21 55 puts.

    As well good to buy stock today for armchair trades, or sell shorter term puts.


  7. I think Q3 & Q4 of 2018 were the high water mark for Tesla.  They had a large amount of pent up demand for the Model 3, and harvested that backlog for customers willing to pay for the highest margin cars.  Now there is a lot of evidence (Just search $teslaq on twitter) that shows that go-forward demand is anemic, with tons of cars accumulating in lots all across the country.  Pent up demand in Europe is much less than in the US as well, and the trade war is hurting them bad in China. I think it is a mistake to assume Q3-Q4 profits can be extrapolated into annual figures. It will be a miracle if they survive this year without a capital raise, and who is going to give them money now with the likely Q1 earnings disaster? 


  8. I can not understand why I first have to lose my comments as the site says you posting comments to quick??? I am a sloooooow poster!!!


  9. I’m selling short term calls at $380 every couple months on Tesla, and using the money to buy short term $200 puts for a cash neutral way to capture the coming restructuring.  


  10. I meant short term $380 calls.


  11. Long some /NQ.

    Close stop.  Looking to see if AAPL extends its gain here.


  12. NRZ/Coulter – They are selling 40M shares (a bit more than 10%) to raise $650M (a bit less than 10% of their assets) and I don't mind it when my companies do that rather than borrow.  The raise is at about $16.60 but another 6M warrants paid to the Banksters kind of pisses me off. 

    I doubt they do much this year as they have to build a base with the new money but they are solid so, as a new trade, I would:

    • Buy 500 shares at $16.40 ($8,200) 
    • Sell 5 Jan (far as they go) $17 puts for $2.25 ($1,125)
    • Sell 5 Jan $15 calls for $1.75 (now $1.50) ($875)

    That drops your net to $6,200 ($12.40) so, even if assigned at $17, the average on 1,000 would be $14.70 and if you get called away, you just buy more stock and sell more calls – the dividend is 0.50/q so it's very possible you do get called, which is why I want to make at least 0.35 on the call away.  I'd rather give up 0.15 of my dividend than not be protected.  

    TSLA/Palotay – I do still think the whole thing may be a giant con but I won't short them down here – too risky.  Your strategy is very reasonable though.

    LOL Yodi – Happens to me too sometimes.  I always copy (CTRL-C) my comments before hitting the Submit button – just in case.

    /NQ/Albo – Nice catch, now you can just place a stop at the 7,100 line.  

    /RTY not being helped much – 1,579.


  13. Phil yes you right I sometimes forget to do it


  14. I think M is still a bargain at 25 !!!!


  15. MO over 50 I hope you guys bought some when I advised at 43!!! good armchair trade


  16. I did grab some MO, Yodi. I'll be very happy if I can get about $52 for it and use the proceeds to buy some more NLY at $10.


  17. Atilan If you sold the 52.5 call it want be long and they give you your money back, but I would not be to happy to give MO away as I have a feeling they will go higher.

    NLY they still a bit over 10 but a different game.


  18. Phil / Members – Currently trading within a pension as well as a brokerage account. Does anyone have knowledge around the most advantageous (and of course, legal) ways to minimize tax liability? What setup makes the most sense? I've read posts from other members about trading within IRA's? Thx


  19. Soma ask Trump!!! Sorry just a joke!!!


  20. SIG still a good entry for armchair!!!


  21. yodi – ur on the money there!!!! lolol


  22. Phil – CMG short call roll from last week (Feb 15th). Your comments got a bit mixed up with dates and strikes, but wanted to check out your thinking on the roll. You noted:

    CMG – $605?  Really?  Well, we're bullish but not this bullish and the short callers are killing us.  Fortunately, we can still sell 10 of the 2021 $450 puts for $32 ($32,000) to buy a bit of balance as the March $550 calls would have to gain $30 ($36,000) to wipe that out.  Our $160,000 long spread is 100% in the money at $550 so the only way we owe these guys a dime is if we have $192,000 and the current value of the spread is net $2,560 so we have $189,440 left to gain if CMG stays at $605 and then we'd owe 12 $550 callers $55 ($66,000) and we'd still have $123,440 left.  Kind of puts things into persepctive, right?  Since $605 is ridiculous, let's sell 8 of the June $600s for $50 ($40,000) as the beginning of a pre-roll of the 12 March $480s.  As long as we're under $620, it won't hurt much and, if CMG does take a dive – we get a double win."

    You made a typo on the 12 calls to roll – they are the 12 March $550s that need to be rolled. You wisely reduced your amount of short calls from 20 to 12 ahead of earnings – I decided to let the stock run its course (who the hell would have thought it would punch over $600!!!!) so I don't have the luxury of selling additional calls – I need to roll 20 of the $550s to the June $600s at a cost of $8.50 per contract. Or is there a better roll?

    I was thinking as CMG is showing some weakness (probably temporary) I could roll the 20 March $550s to the April $580s for a debit of $15 and partially finance that with a half sale (10 contracts) of the May $550 put for a $17 credit. 

    So many possibilities :)

    I'm holding 20 of the 2021 $480/$540 spreads and I layered on before earnings an additional 2021 $500/600 spread.

    And just to follow up your put sale, I wondered whether it would not be better to sell shorter term puts, e.g. May $580 for $27.50 – they roll all the way down to the Jan 2021 $450s for a scratch, and if things go well, and CMG holds $600 by May expiration, then the puts expire worthless and I sell the next set of puts.









  23. Why doesn’t the ‘voter fraud’ crowd care about what happened in North Carolina?


  24. McCabe: ‘I think it’s possible’ Trump is a Russian asset




  25. Phil / Thoughts on this CVS spread?
     

    Buy 10 Jan21  55calls @ $14  14,000

    Sell 10 Jan21  80 calls @  $4   (4,000)

    Sell 5 Jan 21   55 puts  @  $5   (2,500)



  26. SIG July 27/26 strangle for 7.15 and buy the stock Combined return 5.99% per month.


  27. Soma CVS pays 3.08 % See my remarks above. But to early for me to sell any calls!!!


  28. Stopped out of /NQ for small loss.  

    Could still see that upward push, but not willing to hang around for it.


  29. What a difference a day makes. WMT train jumpers were buying yesterday stock at 103!!!.

    I am holding the Mar 15 97.5 caller sold for 2.00. Just smiled at the train jumpers. Stock trading today at 98.90.

    You just need to be patient and don't get to nervous.


  30. M/Yodi – I agree.  

    Taxes/Soma - 

    /RTY hitting 1,580+ on the button so game on when it crosses back below for the shorts (noted in above post).  The "typo" was because, in the Hedge Fund, we had sold the $480s and that was on my mind too.  That's still the best roll – I think $550 is a reasonable target but if going to April helps your margin, why not?  You may end up having to roll the put but a minor issue by comparison.     

    CMG/Winston – Yes, very annoying but at least back under $595 now.  

    I think CMG is very toppy here so I'd be taking the $480s off the table but then you'd have to deal with the naked $540s (I'd double up on the $500/600 spreads to cover and move the $540s to the same short-term short calls).

    I wouldn't sell the short-term puts because I think we're heading lower, maybe the 2020s but not May as you know CMG can drop a quick $100 on an outbreak.

    CVS/Soma – They are only at $65 and you are paying net $7.50 for the $25 spread, so very reasonable.  If you don't believe in them enough to sell $65 calls, why are you being so bullish with the short calls?  I would sell 4 of the $65 puts for $9 ($3,600) and buy 15 of the $55 ($14)/70 ($7) bull call spreads for $7 ($10,500) so net $6,900 pays $22,500 for a $15,600 profit at $70 vs you  paying $7,500 for a spread that pays $15,000 at $70 (up $7,500) and $25,000 at $80 (up $17,500).  At $55 the 4 short puts cost $4,000 more than the $55 puts – that's the only additional risk but I think well-mitigated as you can sell 5 short calls when CVS gets back around $80 and the short May $65s are $3.25 so hopefully you can get that for the $80s one day and just 3 sales like that is more than $4,000.

    WMT/Yodi – Crazy move for them.

    /NQ/Albo – Hard to short when AAPL is on the warpath.  Topped out at 7,100 – good resistance.  2,785 on /ES and 25,900 on /YM along with 1,584 (as expected) on /RTY and NOW I can short one – even though we didn't cross back under yet as the risk is only stopping out at 1,590 for a small ($30) loss.


  31. Wow, that was well-timed.  What happened?


  32. Phil – thanks. But what about the roll of the short March $550 calls – we need to do something about those?


  33. CMG/Winston – I'm happy with that target for now.  Maybe we'll have to roll in a month but not now. 


  34. Hello Yodi.  Thank you for sharing these great trades.  I find your comments very helpful.  On SIG, you are selling the 27 July calls and selling the 26 July puts for a credit of $7.15.  I concur that if the stock is above 26 in July you would be taken out of the position and get a the 5.99% return per month (I calculate $945 profit on $2618 investment as you capture one dividend of $1.48).    On the downside, the risk would be owning more SIG at 26.00 for a total net in basis of around $21.37 ($2618 + $2600 – $945 for 200 shares).    Then I would expect you would turn around and sell the same type of strangle again.  

     

     Does it look like I am grasping the concept correctly?  Thanks as always for the guidance.


  35. Phil were you suggesting selling some AAPL 175 short term calls would be a good plan .. have 20- 140c uncovered.



  36. UBS Faces Year of Lost Earnings After Shock French Tax Verdict


  37. Phil, isn’t /RTY $50 per point and $5 per 0.1 point?


  38. Thank you Yodi and Phil, will buy the M strangle.


  39. What a difference a day makes. WMT train jumpers were buying yesterday stock at 103!!!.
    I am holding the Mar 15 97.5 caller sold for 2.00. Just smiled at the train jumpers. Stock trading today at 98.90.
    You just need to be patient and don't get to nervous
    Robert Yes you doing well. I look at it that way, if I buy the stock below 27 I can afford to sell the 27 caller for a max premium, so even if called, you still land up with a capital gain. On the down side you have 7.15 in your pocket, so it is quite a good safety margin. Obviously one has to see where the stock is going to and with so many of my cherry calls you might have to roll the caller not to lose the stock. Remember the stock goes up and down always with a delta of 1.So you might lose on the caller but to a certain extend you gain on the stock as well as on the going worthless putter.
    In the end just remember you cannot win them all. And never put all your eggs in one nest.
    Look at our discussion on CVS today. I only rolled the longs and sold the 55 Jan 21 put. I left my Jan 20 80 caller as is. I did not buy stock but in addition sold some May 62.5 putters for 2.40, it is all how you feel like. But you are getting the idea.


  40. Advill nice to see you on the board, I hope you well and hear from you!!!


  41. Anyone know why WMT was hit today?










  42. Mike Pence is in serious trouble


  43. Sold 1/3 of NUGT up 7%.  Stops up to entry.


  44. 8800 they were to high for my caller!!!


  45. AAPL/Wing – Well, I regretted not selling Feb $180s when we got close last time so I'd keep an eye on the March $180s, now 0.90 and the $175s are $2.30 so $2+ is a good price to hope for for 5 short ($1,000) as a 1/4 cover.  Silly not to take $12,000 for the year when it's being offered, right?

    RTY/Mike – You're right – good thing it worked!   I was thinking of the /YMs.

    WMT/8800 – I don't think the CC went very well.  Too cautious on forward guidance.  

    Walmart Inc. (WMT) CEO Doug McMillon on Q4 2019 Results – Earnings Call Transcript

    the planned reduction of tobacco sales at Sam’s Club, the deconsolidation of operations in Brazil, and heightened competition in the United States and China could remain a drag.

    Still, very solid overall and they do well in a recession.

    WMT Sales


  46. Fed Minutes in 30 mins.


  47. That's why I love GOLD and WPM – it doesn't take much to drive them higher and, when commodities are down, they are not worthless – they still make money – just less.  If you bet on Futures, however, you hit or you miss.


  48. Yodi & Phil,

    Yodi:Thanks for the expert guidance from on high.

    Phil – thanks for the CC thoughts

    As an aside, it was great to see WMT following CVS's lead in attempting to reduce tobacco consumption. CVS stopped  selling cigs altogether. Be great if all retailers got societal religion.


  49. Cigs/8800 – Good luck with that dream.  

    No one is getting these minutes in advance, so the action will be interesting.  Indexes already popping back to highs.



  50. Developments in Financial Markets and Open Market Operations

    The deputy manager of the System Open Market Account (SOMA) provided an overview of developments in U.S. and global financial markets. Financial markets were quite volatile over the intermeeting period. Market participants pointed to a number of factors as contributing to the heightened volatility and sustained declines in risk asset prices and interest rates over recent months including a weaker outlook and greater uncertainties for foreign economies (particularly for Europe and China), perceptions of greater policy risks, and the partial shutdown of the federal government. Against this backdrop, market participants appeared to interpret FOMC communications at the time of the December meeting as not fully appreciating the tightening of financial conditions and the associated downside risks to the U.S. economic outlook that had emerged since the fall. In addition, some market reports suggested that investors perceived the FOMC to be insufficiently flexible in its approach to adjusting the path for the federal funds rate or the process for balance sheet normalization in light of those risks. The deterioration in risk sentiment late in December was reportedly amplified by poor liquidity and thin trading conditions around year-end.

    Early in the new year, market sentiment improved following communications by Federal Reserve officials emphasizing that the Committee could be "patient" in considering further adjustments to the stance of policy and that it would be flexible in managing the reduction of securities holdings in the SOMA. On balance, stock prices finished the period up almost 5 percent while corporate risk spreads narrowed, reversing a portion of the changes in these variables since the September FOMC meeting.

    Following the briefing, participants raised a number of questions about market reports that the Federal Reserve's balance sheet runoff and associated "quantitative tightening" had been an important factor contributing to the selloff in equity markets in the closing months of last year. While respondents assessed that the reduction of securities held in the SOMA would put some modest upward pressure on Treasury yields and agency mortgage-backed securities (MBS) yields over time, they generally placed little weight on balance sheet reduction as a prime factor spurring the deterioration in risk sentiment over that period. 


  51. Wow. Gold taking it on the chin.


  52. FOMC: Inflation near target. Planet Earth: Inflation out of control

    After a dovish pivot at the last meeting, the Federal Open Market Committee (FOMC) released minutes from its two-day January meeting on Wednesday. Investors have been anxiously awaiting more insight into the central bank’s monetary policy path going forward and its views on the state of the economy.

     

    The Fed’s decision to remain “patient” was in response to a steep selloff in the stock market at the end of last year coupled with concerns over a global economic downturn. According to the minutes, there was a “variety of considerations that supported a patient approach.” Furthermore, “a patient posture would allow time for a clearer picture of the international trade policy situation and the state of the global economy to emerge and, in particular, could allow policymakers to reach a firmer judgment about the extent and persistence of the economic slow- down in Europe and China.”

    Fed Chair Jerome Powell mentioned that the central bank would be assessing such risks before making decision on whether or not to continue hiking short-term interest rates. The Fed stated in its January statement “the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low.”

    Nevertheless, since the Fed’s meeting in January, there has been a slew of disappointing economic data. Retail sales and industrial production data was below economist projections, and there has been a continued rise in initial jobless claims. The Fed indicated that it would remain data-dependent and language from the minutes suggested that, “participants continued to view a sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes over the next few years.”

    The financial markets surged following the news that the Fed was putting interest hikes on hold, and now many investors are curious what the central bank’s next move could be and which risks the Fed sees as the biggest potential threats.

     

    Another topic of focus at the January meeting was the Fed’s balance sheet. For the first time ever, the Fed released a separate statement to address the central bank’s balance sheet. That new statement signaled to investors that while the rolling off of the balance sheet is important it is only part of how the Fed determines monetary policy.

    “The Committee continues to view changes in the target range for the federal funds rate as its primary means fo adjusting the stance of monetary policy,” according to the FOMC’s January statement. The Fed did also say that it economic and financial conditions would determine how the central bank will complete its balance sheet normalization.

    The Fed currently has about $4 trillion in bonds on its balance sheet, and according to the January meeting minutes, “almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve’s asset holdings later this year.”

    Not as doveish as people thought.  Dollar moving back up (96.33) so back on the /TF shorts at 1,582.  


  53. Got 2.95 for 5 AAPL 175 Mar22/19 calls   :)


  54. More FOMC Minutes: "Many participants suggested that it was not yet clear what adjustments to the target range for the federal funds rate may be appropriate later this year;."

    FOMC minutes: Important to be flexible in managing the process of balance sheet normalization

    FOMC Minutes: ' Many participants observed that if uncertainty abated, the Committee would need to reassess the characterization of monetary policy as "patient" and might then use different statement language.'

    FOMC "Participants also supported a proposal to remove from the statement the characterization of risks to the economic outlook as "roughly balanced.""

    More FOMC Minutes: "With regard to the postmeeting statement, members agreed to change the characterization of recent growth in economic activity from “strong” to “solid,” consistent with somewhat softer data.

    minutes: "Some participants noted that some factors, such as the decline in prices, slower growth and softer abroad, or appreciation of the dollar last year, had held down some recent inflation readings and may continue to do so this year"

    "FOMC communications were reportedly perceived by market participants as not fully appreciating the implications of tighter financial conditions and softening global data over recent months for the U.S. economic outlook"


  55. 8800 You welcome BUT do not run my stock down. I do not smoke but do cheer every one smoking, who pays my dividend!!! MO PM etc.


  56. Yodi.  Thanks again for the tips.  Any other stocks you like similar to SIG?


  57. Crazy up and down moves – hard to play.

    3rd time not likely to be a charm shorting /RTY so I'd say don't play now.  

    Oil and /RB blasted higher, some of that money came from /NG.

    Not complaining, it was a nice run.  

    WSJ's doveish Fed summary wins out for the moment – though it's exactly the same as what we recently rallied off – no new info.

    Fed Prepares to End Balance-Sheet Runoff Later This Year

    Federal Reserve officials agreed at their meeting last month to announce soon a plan to stop shrinking their $4 trillion portfolio of bonds and other assets later this year, according to minutes of the meeting. 41 minutes ago


  58. Robert, M was mentioned today, but on Friday I gave a whole list of stock you may possible add to your watch list. Good deals come over time and not over night!!


  59. Even that I like T better at 29, I think it is worth a toss at 30.85 for an armchair trade.

    Sell the May 32/30 strangle for 1.46 and buy the stock. combined monthly return 2.2%.


  60. Follow up on M sell the Apr. 24/26 strangle for 2.46 and buy the stock for 25.02. Combined monthly return 5.7 %. I would start with 200 shares to wet your feet, as M was already down to 17 during the last 2 years.

    I would consider the play as a medium risk.


  61. Follow up on M sell the Apr. 24/26 strangle for 2.46 and buy the stock for 25.02. Combined monthly return 5.7 %. I would start with 200 shares to wet your feet, as M was already down to 17 during the last 2 years.
    I would consider the play as a medium risk.
    I did notice yesterday that Robert did calculate his return a bit different to mine, as he only included one div over a certain period.
    Please note different stocks pay dividends, monthly, quarterly, semiannual and most European stock pay only once per year. So for my calculation I use the monthly return. For example on M, even if the pay quarterly, we have a monthly div calculation of 0.13 cents and the strangle shows a return of 1.32 per month.
    When I purchase a stock for the armchair trade I do in general intend to hold the stock much longer than one month.
    Take for instance NLY, not the hottest return as the 2021 10/10 straddle gives me only a monthly return on div. 0.10 cents and the option play 0.9 cents. So my combined monthly return is only 1.84%.
    Not bad but over 2 % looks always better to me.
    Phil mentioned the other day to sell the Jan 21 8/10 strangle where we sell the caller at 8. However even that the initial income of option play is higher, I am sure you will be called within the next month, as there is practical no premium left in the caller.
    Just a small commentary to my trading.




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