Global Market Comments
February 26, 2021
Fiat Lux
Featured Trade:
(REVISITING THE GREAT DEPRESSION)
(EXPLORING MY NEW YORK ROOTS)
“Lower yields, for longer, and lingering. I don’t think we’re going to get to an end for some period of time. The money that has been pumped into the system is going to keep equities high,” said Mark Grant, managing director of Hilltop Securities.
Global Market Comments
February 25, 2021
Fiat Lux
Featured Trade:
(TAKING A LOOK AT THE ROM)
(ROM)
(BRING BACK THE UPTICK RULE!)
If you have a Great Recession type of stock market, you have to employ a Great Recession type trading strategy.
Markets are now pricing in the end of the pandemic. Fear has outrun the facts of the epidemic by 1,000 to one. The result has been a classic rip-your-face-off rally worth 14,000 Dow points.
So, I have been dusting off some of my favorite trades for a decade ago, when we were dealing with similar levels of panic, despair, and desperation.
Suddenly, the (ROM) came to mind.
The (ROM) is the ProShares Ultra Technology ETF, a 2X long in the top technology shares. It holds the fastest growing, cream of the cream of corporate America which you want to hide behind the radiator and keep forever.
Quality is on sale now and here is where you want to be loading the boat. (ROM) even pays a modest 0.17% dividend.
(ROM)’s ten largest holdings include:
Microsoft (MSFT)
Apple (AAPL)
Facebook (FB)
Alphabet (GOOGL)
Intel (INTC)
Cisco (CSCO)
Adobe (ADBE)
NVIDIA (NVDA)
Salesforce (CRM)
Oracle (ORCL)
The major (ROM) holdings, like Apple, Amazon, and Facebook (FB) have gone virtually nowhere for six months. Yet, their earnings have continued to grow at a feverish 20% annual rate. These stocks were just exhausted and needed a time-out.
Since last week, the (ROM) suffered a nearly 10% selloff. So, there’s your entry point.
It gets better. The (ROM) HAS OPTIONS. That means you can lay on out-of-the-money LEAPS on the (ROM).
I’ll give you an example.
A year ago, you could buy the (ROM) August 2021 $30-$32 LEAP for $0.91. If the (ROM) recovered from the then-current $25 to $32 by August 2021 expiration you could earn a profit of 120%. That means a 28% gain in the stock brought you a 120% profit in the LEAP, implying a limited risk return (you can’t lose any more than you put in) of 428%.
Remember too that a 2X ETF can cover a lot of ground in a very short time in a new bull market.
It has since done exactly that.
The harder I work, the luckier I get.
To learn more about (ROM), please click here for their website.
The Way Forward is Clear
“Any sufficiently advanced technology is indistinguishable for magic, said Arthur C. Clark, futurologist and author of 2001: A Space Odyssey.
Global Market Comments
February 24, 2021
Fiat Lux
Featured Trade:
(LONG TERM ECONOMIC EFFECTS OF THE CORONA VIRUS),
(ZM), (LOGM), (AMZN), (PYPL), (SQ), CNK), (AMC), (IMAX), (CCL), (RCL), (NCLH), (CVS), (RAD), (WMT)
“It’s not like stocks are so compelling. It’s that there is nowhere else to put your cash. There’s a ton of capital coming in here. When it feels this easy, it’s usually time to be cautious,” said Barry Sternwood, CEO of the Starwood Capital Group.
Global Market Comments
February 23, 2021
Fiat Lux
Featured Trade:
(THE UNITED STATES OF DEBT),
(TLT), (TBT), ($TNX)
“A strong dollar is a natural consequence of America emerging from a liquidity trap, while Europe and Japan are still stuck in one. The dollar is a growth stock, and growth stocks over time outperform utilities,” said Paul McCulley, formerly the chief economist at bond giant PIMCO.
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more