WOW!!!!!!!!!!!! How will I ever do anything else in my life that will compare to the wild ride you get trading an ultra etf in the most volatile sector in the stock market the day before option expiration?
Matt1966
thanks for the DNDN recommendation last week phil. that was moneeeee….
Kwan
The strategy you have laid out pretty much mirrors much of my trading activity. I also mix in some momentum plays and "drop dead" bargains that come across my radar. My YTD trading profit is 63%. Back in March when Phil said "unless you think the world is coming to an end, then NOW is the time to start taking positions in Buy/Writes with the VIX so high." I jumped in with both feet - ( thanks, again Phil)
Chaps
WOW, look at DRYS go. Nice call on the entry the other week Phil. I got 200 at $6.66 and sold a 7.5 call for $.50, then on the tear today sold another 7.5 call for $1. This should puts me in at an average of $5.91 and called away at $7.5 for a profit of $300+ after commisions. Once again another Phil trade pays for this months membership.
Craigzooka
I am an investor, not a trader. The information at Phil's World is top-notch and always relevant. It is great to see your website thriving.
Prof
Every time I read Mr. Davis' market analyses and reports about his super profitable trades I feel admiration mixed with envy for the overall brilliance of this man, intellectual and verbal, his extraordinary savvy in the exotic art of options and, last not least, his moral passion with which he writes, even if in passing, about the darker aspects of capitalism.
RussianBear
Phil,
3 for 3! Sold on initial excitement and made a double on USO, 70% on AMZN and 70% on SPY options from Friday.
Thanks and much appreciated for the suggestions.
Gingbaum
Hey Phil,
You called all the trends and market movements with perfection this week. I enjoyed it! Thanks for keeping us sane!
GClay
By the way thank you Phil for the DNDN idea. 3x till this morning and will 4x my small investment by next OE THANKS !!!!
Microflux
Being a bear is easy (and I am not convinced we are doing all that well on the whole as an economy), but one cannot fight the trend (didn't Phil say that a while ago)? Just cover, make 5-10-15-20% and move on. It really does add up by chipping away. All I can say is I am back to 2007 levels in my account b'f the crash with this run up and some very nice help on this board….so kudos to us (and me!!)…
Pharmboy
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.
Ether
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!
lchu
Phil - DIA 107 Calls. As suggested I am taking the money and running to home depot for some shelter supplies! This is the grand finale of several successful trades from you through this roller-coster and as you have further suggested it is time for me to sit back and relax in cash. May even be able to talk my wife into the premium membership after these intelligent trades in a stupid market.
DOStrade
Phil, did you by chance publish the weekly webinar on Youtube yet? I have been watching these and they are awesome. Unfortunately, I can't cut out of work to attend live webinars. Again, they are just awesome content – thank you.
jcpdx
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!
Jerseyside
Phil - Your logic not only makes sense, but it made a lot of premium profit for me over the past 12 months. I have recovered much of the massive equity losses of last year. My Monday play is the sale of long term puts on FXI. Love the premium!
Gel1
I thank you for the years of being my teacher, always took the time to answer my questions.
You are the BEST !
QCMike
Phil: That NFLX call was awesome. The speed at which NFLX options decayed was precipitous. The blow out spike that allowed me to double and roll my callers to 190(!) and the ridiculous 170 weeklies @3.50 a day away from Op-Ex. The gains I realized in that trade floored me when I took a long at my portfolio value on Friday. What a great way to start the 3rd Quarter.
Kinkistyle
Well that was a fun day. Cashed out my GS 140 calls for about 35% profit and my AAPL calls for 38% gain. Not bad for 40 minutes of work. Back to 85% cash.
Singapore Steve
Phil, i wanted to thank you again for helping me protect future stock allocations at work - finally, i feel like i am owning my own destiny with stocks vs. letting the market dictate what you get – thanks again.
Nramanuja
Phil - I'm with you just little bit longer than a month and you can not imagine how happy I am now, and not just because my P/L improved ( and I'm sure that it will be even better), but I found that the worst thing in trader's carrier is a LONELINESS. Here I found so many bright good guys, I looked for this service for years.
THANK YOU AND TAKE GOOD CARE OF YOURSELF BECAUSE I PLAN TO STAY HERE AND RIDE THIS CREASY MARKET WITH YOU FOR ANOTHER 20-30 YEARS
Tchayipov
Phil, I'm up 34x what I paid in fees for your service, and that only counts the trades I didn't think of myself. Thanks!
Barfinger
Phil, those OIH $80 p that you recommended last week for ~$1 are now worth $5.50!
Greg
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.
Texasmotion
There are a lot of us that have been here a long time and we all learn something everyday. Just keep asking questions, there are a lot of smart people here and they are willing to help and then of course, you have Phil.
Jr Mints
Best year I've ever had…sitting on a 52% YTD return. I would also echo Nat's shout out for Phil's talent. I've been a member for the 6 years or so. Just stay true to the strategy I've learned over the years of selling premium, keeping the bulk of my portfolio in long-term buy writes ("armchair" trades).
JJennings
I did the same thing via your logic (sold puts that is). I glanced one time and they were already up 15% which is considered a good return for an overnight hold in most circles. This is PSW though and to us it's just another day…
Kwan
Great calls this week!
SNS1
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
USO, QQQ- Phil, thanks for these plays. Out of USO for about 65% gain today and just keeping 1/4 QQQ.
That's down from 7.9% in Q2 as China struggled with power shortages (which the US did not have) and supply chain issues (which the US does have) as well as Beijing's efforts to reign in the madness in the Real Estate and Technology Sectors before they form a bubble that wipes out everything else (the US just lets it happen). Delta Covid and the semiconductor shortage were also to blame and will also be factors in our own GDP. Get ready to be disappointed.
Compared to Q2, China's Q3 GDP was up just 0.2%, which was up just 1.3% from Q1 – not a great year at all. In an acknowledgment of the mounting risks to the economy, China's Statistics Bureau said that “There are increasing uncertainties in the external environment, while the domestic economic recovery is unstable and unbalanced.”
On Friday, China Central Bank officials suggested it wouldn’t resort to a relatively large stimulus to drive up the growth rate in the final quarter of the year, for example by flooding the financial system with liquidity or slashing benchmark interest rates. Officials also played down risks from the debt crisis at China Evergrande Group, the country’s most indebted property concern, whose troubles have rattled markets and raised questions about China’s overall economic and financial health.
We get our own GDP Report next week but, for now, we'll have to content ourselves with the Beige Book, which is like old Uncle Remus stories (now redacted by Disney) about the economy and has nothing to do with data. This morning we'll get the Industrial Production Report along with the Housing Index, more Housing stuff tomorrow, Wednesday is Beige Book day and Thursday is the Philly Fed along with Leading Economic Indicators and we wrpa it up Friday with PMI.
Earnings, of course, are coming in hot an heavy but it's only the warm-up for Big Tech next week.
Remember, we are mainly concerned about how companies are dealing with inflation but it also looks like supply and labor shortages are going to…
Doing nothing has been one of the best strategies of the last few decades.
I’m talking about the tried and true 60/40 portfolio. 60% stocks. 40% bonds. You had to rebalance, so not exactly nothing, but as close to it as you can get.
Nothing and easy, however, aren’t the same thing. You had to sit through multiple 50% crashes in the stock market. You had to sit on your hands during periods where “everyone” was getting rich. On the spectrum of easy to impossible, doing “nothing” is closer to the latter.
How many people can stay the course for multiple decades? The investor’s principal challenge is to fight the urge to de-risk in a bear market and add risk in a bull market. Most will lose this battle at some point. Some will lose the war.
Historically, the best, again not easiest, but best weapon to fight off these feelings was diversification. I use the word historically because nobody knows what the future holds. Given that 40% of the portfolio is now yielding under 2%, it’s unlikely that the past returns will be matched in the future.
The nightmare scenario for this strategy is that rising rates will bring stocks back down to earth. Low interest rates encourage investors to use their imaginations. But when money has a price, equations start to matter. And, needless to say, rising interest rates are also bad for bonds. So yeah, rising rates would be bad for bonds and probably for stocks too. But the question is, for how long?
If money leaves stocks and money leaves bonds, where does it go? It has to go somewhere, and one of the two largest asset classes in the world is usually the place where money finds a home. The brilliant Nick Maggiulli ran some numbers for me to quantify how often stocks and bonds are both down over a given period of time.
Long periods of negative stock and bond returns are rare. Of the 1,137 rolling 12 month periods since 1926, stocks and bonds were both negative on 16 occasions or 1.4% of the time.
Netflix’s dystopian Korean drama Squid Game has become the streaming platform’s biggest-ever series launch, with 111 million viewers watching at least two minutes of an episode.
Out of the thousands of programmes available on Netflix globally, how did so many people end up watching the same show? The easy answer is an algorithm – a computer program that offers us personalised recommendations on a platform based on our data and that of other users.
Streaming platforms like Netflix, Spotify and Amazon Prime have undoubtedly reshaped the way we consume media, primarily by massively increasing the film, music and TV available to viewers.
How do we cope with so many options? Services like Netflix use algorithms to guide our attention in certain directions, organising content and keeping us active on the platform. As soon as we open the app the personalisation processes begin.
But focusing too much on the algorithm misses another important cultural transformation that has happened. To make all this content manageable, streaming platforms have introduced new ways of organising culture for us. The categories used to label culture into genres have always been important, but they took on new forms and power with streaming.
While 50 years ago, you might have discovered a handful of music genres through friends or by going to the record shop, the advent of streaming has brought classification and genre to our media consumption on a grand scale. Spotify alone has over five thousand music genres. Listeners also come up…
That is up a whopping $66,833 in our paired portfolios, thanks to yesterday's market surge and that's even including this week's STP losses, since we did that review on Tuesday, and have dropped about $25,000 since. That means the gains in the LTP were stunning – and we only made 2 adjustments last month! Best of all, we are swimming in CASH!!! We have $1,778,583 (83.5%) of it - up thanks to a lot of new puts that were sold in the past month, while the market was lower.
And that's our cycle – we buy low and then we sell high and we sold back in August – cutting about half of our positions and leaving us with cash to go shopping with and, what is the first thing we do when we add new positions? We sell puts. That puts even more cash into our portfolio and THEN, if we like the test drive, we establish an initial position by scaling in with a long spread (hedged, of course).
I know it seems like a slow, tedious process but it protects our positions so we can ride out the dips and you can see the results as we started with a combined $600,000 in the LTP/STP back on October 1st of 2019 (arguably a bad time to start – just ahead of an epic crash) and now we're up $1,634,532 (272%).
Since mid August, we added short puts on AAPL, AAWW, COIN, FDX, LEVI, MRNA, MT, VALE and XRX, putting an additional $86,600 into the portfolio in exchange for simply promising to buy those value stocks if they get significantly cheaper (net $98 for AAPL, net $175 for MRNA) – those would become our base entry if we do get an entry and THEN we lower the basis further by selling more puts and calls (assuming we still like the stock).
This is a simple strategy to follow but it requires PATIENCE for the long-term investor as it takes several quarters just to establish a position – BUT IT'S WORTH IT!!!
Short Puts – As noted above, we get paid to make a
Earnings are going well so far but it's the half-point drop in the Dollar that's boosting the market.
Investors are, so far, pleased about the way companies seem to be handingling inflation, pushing prices along to the consumer and that leads to more profits – even if they only reflect the inflation. PPI came in this morning showing a 0.5% increase in September, giving us an 8.6% rise for the year so far, accelerating from last month's 8.3% pace. The good news is, Fuel is up 11.6% and, to the extent that's not a long-lasting problem, prices should calm down a bit going forward – so the markets are happy today.
We may have reached Peak Pizza as Domino's (DPZ) dropped 3.5% this morning on a revenue miss but United Health (UNH) is up 3% and Walgreens (WBA) is up 2% – that's one we were betting on, of course. Bank of America is up a full 2.5% on a 58% improvement in profits over last year and Morgan Stanley is heading on the same path with a 36% increase in profits.
We will see how the Nasdaq handles the critical 15,000 line this week, the last two attempts were firmly rejected. The fall from 15,600 to 14,600 gave us 200-point bounce lines at 14,800 (weak) and 15,000 (strong) and 14,400 was an overshoot to the downside (same 200 point-zone below 14,600) so what remains to be seen is – are we consolidating for a move back up or back down?
Tech earnings come next week, so these moves are just noise while we wait for them. The S&P 500 is doing a similar bounce, having fallen from 4,550 to 4,300 which makes for 50-point bounces to 5,350 (weak) and 5,400 (strong) – so that's another line in the sand to watch this morning. Unfortunately, on the Retail front, 85% of those surveyed expect supply-chain distruptions to hurt holiday sales. That's going to affect on-line sellers as well.
Based on the Fed Minutes yesterday, the taper is definitely coming but it's certainly not dissuading traders this morning. “Participants generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around…
This isn’t the first time Republicans have resisted helping a Democratic president raise the debt ceiling.
As an economist, I know that this political game of chicken has real-life consequences – even if it doesn’t end with default. In August 2011, during the Obama administration, brinkmanship over the debt ceiling led to an unprecedented downgrade of the United States’ credit rating, which caused markets to plunge.
What is national debt?
Understanding those consequences begins with looking at how the U.S. government finances its spending. The Treasury Department has three sources.
It can use revenue from taxes and fees approved by Congress but collected by the Treasury.
It can also print money through the Federal Reserve.
But when the first two options don’t supply enough cash to pay the bills, the Treasury can borrow the difference by issuing bonds and selling them on the world’s financial markets. Bondholders lend the government a set amount of money to be paid back with interest over a certain time frame. The amount owed is the national debt, which currently stands at US$28.43 trillion. That is above the debt ceiling of $28.4 trillion set by Congress earlier this year. The Treasury had been using “extraordinary measures” to finance government spending in lieu of an extension, but those measures were due to expire…
BlackRock (BLK), Delta (DAL), First Republic (FRC), JP Morgan (JPM) and SAP (SAP) all bet their earnings expectations this morning and tomorrow we'll hear from AA, BAC, C, CMC, DPZ, MS, PGR, TSM, USB, UNH, WAFD, WBA and WFC, so a good start to earnings but we'll pay particular attention to guidance that is given. CPI is expected to be at 0.3% this morning pub probably higher and then we have a 30-year note auction at 1pm and that will only matter if it goes poorly – indicating investors are not willing to lend us money below 3% against what is likely 6% inflation.
Fortunately the biggest buyer of notes is the Fed and the Fed will publish the minutes of their last meeting at 2pm and traders will anxiously read the tea leaves to see how long this taper/QE program will continue. It's been a whole lot of nothing since we first tested 4,350 on the S&P 500 in September and we're still there this morning. Congress finally approved lifting the debt cieling but that's hardly news and it's only good for two months – not a lot of impact there.
Looking closely at earnings, Delta is facing fuel inflation pressures and JPM made all their income gains by adjusting their loan loss reserves down by $2.1Bn – overall revenues were flat and income would have been as well, otherwise.
8:30 Update: CPI came in hotter than expected (of course) at 0.4% for the month, running at a 5.4% annualized pace but it's likely to pick up even more into the holidays.
Other than that, there's not much else going on so let's get back to our Portfolio Reviews:
Money Talk Portfolio Review: This one is easy as we can't touch it between shows and I was last on TV on September 1st, when we added BYD and HPQ while cashing out of IBM. At the time, the porfolio was up 95.9% at $195,906 and, at last month's review, we had made no progress at $194,944 but this month we're up 100.5% at $200,491 so congratulations to all who played along at home.
We have $167,589 (83.5%) in CASH!!!, so we're not too worried about the market dropping. I should be on…
I recently visited my local ski shop and they had hardly a boot, ski, goggle or pole to speak of – two full months before ski season begins. The owner said he’s normally close to fully stocked around this time of the year.
This may seem a little odd to some Americans given the U.S. has been living with the COVID-19 pandemic for over 19 months. Shouldn’t supply chains stressed by the onset of the pandemic have worked out their kinks by now?
As someone who conducts research and teaches on the topic of global supply chain management, I believe there are four primary – and interrelated – reasons for the continuing crunch. And unfortunately for many, they won’t be resolved by the holidays.
1. Consumer demand soars
When the pandemic first slammed into American shores in March 2020, companies were already preparing for a prolonged recession – and the typical resulting drop in consumer demand.
Retailers and automakers, many of which had to close due to lockdowns, canceled orders from suppliers.
But something strange happened by the end of the summer of 2020. After the initial shock, consumer spending began to rebound and was nearing pre-pandemic levels by September, in no small part thanks to the trillions of dollars in aid Congress was showering on…
5:30pm ET LIVE premiere today – Subscribe for the alert!
Join Downtown Josh Brown and Michael Batnick for another round of What Are Your Thoughts? On this week’s episode, Josh and Michael discuss the biggest topics in investing and finance, including:
Q3 Earnings Season – Let the “relative” disappointments begin!
No Love For the Bull – It took a 102% gain (from the March 2020 low) for investors to buy equity funds & ETFs.
Fake It ‘Til You Make It – “Sometimes the line between vision and alleged fraud is getting your next round of capital.”
Stop the F***ing Ride – There’s a company that wants you to spend real money buying fake shares of real startups LOL.
Hester Peirce – To what extent does investor protection inhibit investment success?
Cash Flows Are Sexy Part II – The last time the Consumer Staples sector fell below 6% of the S&P 500 was, um, early 2000.
Index Overlap – If your portfolio is primarily in the S&P 500 and Nasdaq, are you actually diversified?
Paying Down Debt – Why would you pay down low-interest debt when you could be investing instead?
And much more!
Josh and Michael (and Ben) use YCharts when creating visuals for this show, as well as for many aspects of their business.
With leaked trades in their personal accounts already costing two Fed presidents their jobs, and a third - vice chair Richard Clarida - currently on the ropes amid speculation he will soon follow, a few weeks ago we joked that if forces within the Fed want to get rid of all the hawks, they should just leak Esther George - the Fed's last remaining uberhawk - trading record.
If the Fed wants to get rid of all the hawks, they just need to leak Esther George's etrade blotter
Private Banks operated by the mega Wall Street banks have an unseemly reputation. So when we opened Atlanta Fed President Raphael Bostic’s financial disclosure forms and saw that he had a financial relationship with Morgan Stanley’s Private Bank, a red flag went up immediately.
Citibank’s Private Bank was previously the subject of an investigation by the U.S. Senate’s Permanent Subcommittee on Investigations. At a h...
Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.
The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.
Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.
After a stellar start to the year, which saw its price soar to an all time high above $4,100, trouncing virtually all of its crypto peers, Ethereum has stagnated in recent weeks, with its place in the spotlight taken by bitcoin whose impressive outperformance has been the result of now confirmed speculation that a bitcoin futures ETF is coming. It also meant that what has traditionally been a close correlation between the two largest cryptos has broken in favor of the larger peer; it would also suggest that ethereum is trading about $1000 cheap vs bitcoin.
The House committee investigating the Jan. 6 attack on the U.S. Capitol is tasked with providing as full an account as possible of the attempted insurrection. But there is a problem: Not everyone is cooperating.
Ivermectin is a Nobel Prize-winning wonder drug – but not for COVID-19
While ivermectin was originally used to treat river blindness, it has also been repurposed to treat other human parasitic infections. ISSOUF SANOGO/AFP via Getty Images
Ivermectin is an over 30-year-old wonder drug that treats life- and sight-threatening parasitic infections. Its lasting influence on global health has been so profound...
TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options.
Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!
Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).
It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.
The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).
A successful breakout at (3) would suggest Crude Oil is about to mo...
The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.
Finding ways to generate long-term, sustainable returns for ...
The Suez Canal: A Critical Waterway Comes to a Halt
On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.
Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels. This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.
This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...
The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign.
Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...
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...
4.9% for Q3 in China.
Earnings are going well so far but it's the half-point drop in the Dollar that's boosting the market.
We will see how the Nasdaq handles the critical 15,000 line this week, the last two attempts were firmly rejected. The fall from 15,600 to 14,600 gave us 200-point bounce lines at 14,800 (weak) and 15,000 (strong) and 14,400 was an overshoot to the downside (same 200 point-zone below 14,600) so what remains to be seen is – are we consolidating for a move back up or back down?
Lots of interesting things today.
German
Spanish
French
Italian
Portuguese
Japanese
Korean
Russian
Chinese
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...
Ilene is editor and affiliate program
coordinator for PSW.
